What do you mean, we "have to change"?

In Part 1 of our Four Foundations, we discussed the challenges and opportunities facing enterprises which are not taking better advantage of outsourcing relationships to help plug their talent and capability shortcomings.

However, while it's one thing to talk about the delights that await ambitious enterprises when they make definitive plans go down this path, it's another to assess whether they truly recognize the burning platform to take themselves through this period of pain and complexity to get there.

Foundation III.  A Burning Platform for Change:  As operational efficiency becomes a commodity, operations professionals need to strive for that next threshold of value, or find themselves rendered irrelevant

Our brand new study that delves into the Ideals of As-a-Service (stay tuned for the full release very soon) reveals some startling home truths as to what's likely coming next. My biggest fear in our the industry is for those people just sitting around literally waiting for change, as opposed to squaring

Read More »

Posted in: 2015 As-a-Service Study,  Analytics and Big Data,  Business Process Outsourcing (BPO)

I recently attended a graduation ceremony and was amazed at the number of students engrossed in their phones, occasionally looking up to applaud a graduate.

What's happening here? Have we created a whole generation of socially-retarded morons preferring to network on Instagram and Snapchat than engage in physical dialog anymore?

Welcome to the entitled job market for the twenty-somethings where BPO doesn't quite fit in...

What's even more disturbing is the lackadaisical attitude displayed by so many of them when you ask them about their career plans and ambitions. Most seem pretty happy to sit around at home staring into their phones for a couple more years until their perfect job just happens to turn up on their doorstep.  If you haven't gone down a specific career track such as medicine, law, finance or engineering, the future is an apparent wilderness of vagueness, deluded desires and uncertainty.  Doesn't anyone have a plan to start somewhere and work their way up to a better place in the future?  Isn't that what us mid-career folks did when we were starting out?

So let's focus on our industry - the one of servicing enterprise IT and business operations effectively.  Whether we buy, sell or advise on business operations, if we don't have succession plans to blood the next generation of talent, we'll just become an industry of old farts with over-bloated salaries and a culture of preserving the past, not advancement into the future.

New data from our Talent and Trust in BPO study, where we spoke to 540 business stakeholders on the topic - and you can read the full report here - is pretty damning in this regard, with the vast majority of newbies in BPO seriously struggling to see a career path around BPO practices, despite being impressed with the potential of BPO as a real change agent within their businesses:

Click to Enlarge

In my view, failure to develop a Millennial Strategy will be the ultimate death-knell to a long fruitful future for business and IT services, and we may as well accept the reality that we will become mimicked into a piece of RPA software and erased into the ethernet of digital retirement

Read More »

Posted in: 2015 Talent in BPO Study,  Analytics and Big Data,  Business Process Outsourcing (BPO)

Moving at Warp Speed into the As-a-Service Economy?

Thanks to all of you who spent a fabulous day with us in Dallas for our first HfS Working Summit, dedicated purely to a joint unravelling of how we can find a way to the As-a-Service Economy.

What struck me was how quickly our industry has genuinely become focused on achieving business outcomes over the past few months - and this is being weaved into many of today's new contracts and governance performance metrics.  The conversation has moved along quite markedly and I view this is a major leap forward for many industry stakeholders to change the way we manage service delivery that isn't purely based on valueless metrics and squeezing out those last remnants of bloated labor cost.

However, it's also clear that ambitious enterprise leadership teams are growing increasingly frustrated with their teams' struggles to progress their capabilities, which will be the ultimate burning platform for many enterprises to make the shift and write off their legacy back office.  Here cometh the As-a-Service Economy, where stagnation and legacy will no longer be tolerated...

So what are we learning, at HfS, about the current readiness of enterprises to outsource and leverage As-a-Service delivery?

In short, we're on a train hurtling towards something resembling "As-a-Service" and we need to make sure we stay on it:

At HfS, we are baking this unraveling of As-a-Service delivery into four distinct foundations:

Read More »

Posted in: 2015 As-a-Service Study,  Analytics and Big Data,  Business Process Outsourcing (BPO)

After all these years, CSC is finally separating out its public sector and commercial businesses.  So what does the HfS analyst team think of it all?

This week’s announcement that CSC would be dividing into two new entities, one for US Public Sector contracts and the other for Global Commercial contracts is a welcome and necessary step. CSC is a capable, trusted veteran of the services industry but it has been disappointing the market for some time now. Lacking the scale of IBM and HP, the brand of Accenture and the overhead structure of leading Indian heritage service providers it has been stuck in a poorly defined market position.

CEO Mike Lawrie has been pulling all the available operational levers since his arrival, by putting CSC back on a sounder financial footing, recruiting new executive talent, streamlining the offerings and building the partnerships required for success in the As-a-Service economy. However, those levers still are not enough and without access to new investment capital to build global sourcing and new technology resources as well as a further refinement of the strategy we wonder how CSC can compete in an increasingly globalized, industrialized and automated market.

CSC’s large and challenging public sector contracts acted as a virtual “poison pill” limiting who could take a stake in the combined entity. Breaking this off will free the leadership to further shape the business than they have been able to do, so far.

CSC has carved itself up into a more manageable portion that will, in HfS’s view, make each entity an attractive investment target that, in turn, will maximize the return for current shareholders. The most likely candidate for the Global Commercial entity is a Japanese service provider and for the US Public Sector portion, we envision a PE firm.

If the goal of this action is to do more than just make it easier for each part to be acquired on its own, then we think CSC for the enterprise market needs to do the following:

• Ignite the enterprise sales engine and refine operational processes to make it easier to contract with CSC for deals of all sizes
• Invest in the brand so that it stands for something more in the As-a-Service Economy
• Look at much larger acquisitions of their own if they want to create momentum and bring in new capabilities. Infochimps and ServiceMesh were strategically sound and brought new leadership into CSC but on their own they aren’t enough to move the entire organization.
• Finally, HfS believes they should double down on emerging markets such as Digital and IOT in concert with the rebranding. There are no clear leaders yet in this space and there is still an opening for CSC but it needs rapid and decisive actions on the part of this slimmed down CSC Global Commercial to make this happen.

Posted in: Healthcare and Outsourcing,  HfSResearch.com Homepage,  IT Outsourcing / IT Services

The data from our brand new "2015 As-a-Service Study", where we canvassed the views and dynamics of 716 service buyers, providers and advisors, is fresh off the analytics tools, and we're starting to unravel just how messed up our industry is, as we try and forge a path away from legacy outsourcing practices.

For starters, we asked 372 service provider executives to reveal what actions would significantly enhance their As-a-Service credentials.  Naturally, you would expect them to plump for some serious investments in new tools, platforms, talent etc.  But, sadly, that's not quite the case...

Click to Enlarge

Most providers want the glitzy veneer more than the real deal

Yes, folks, most provider executives (45%) want the nice glossy magazine ads, website banners, white papers, airport billboards, webcasts etc., more than anything else.  Barely a quarter (24%) want to invest in a cognitive computing platform, a third in robotic process automation, with a similar number wanting to see their firms proactively cannibalizing their own legacy revenues to develop As-a-Service solutions for their clients.

However, providers do view upgrading their talent as a higher priority than investing in new technology, with 42% prioritzing the retraining of existing delivery teams with Design Thinking skills, and 40% bringing in consultative talent from outside to replace the long-outdated cheesy sales approach.  The services purists among us can appreciate that providers need to upscale their talent in order to take advantage of evolving technology solutions, analytics and automation offerings.

The Bottom-line:  Several providers are facing a slow death if they can't make genuine changes to the old delivery model

In all honesty, I find this data both depressing and alarming. Most of our beloved providers want to talk a big game more than having the real chops to prove it.  It's just like it was ten years ago when most providers were selling cheap offshore deals under the guise of helping clients with genuine "transformation".  Now, it's simply many providers selling a more mature offshore delivery scenario with much more sparkly and jingly bells and whistles to impress their clients.

My concern, today, is we've become so obsessed with thought-leadership and big ideas that we're losing touch with reality. What's more, it's almost impossible to tell apart most of the service providers - they all have a digital story, an outcomes strategy and at least one guy wielding some form of RPA game plan.  We can't continue in this vein for much longer - we're all getting increasingly bored hearing the same old guff.  What we need is hearing from the clients who are actually investing with their providers.  We need to hear about the incremental steps and investments providers are making with their clients to start that long transition from legacy world to that far-off As-a-Service nirvana.  We need more reality and less fantasy.

So let's all dial back the rhetoric and focus on the real investments in talent and technology that have to take place if we're going to survive in tomorrow's As-a-Service Economy...

Posted in: 2015 As-a-Service Study,  Analytics and Big Data,  Business Process Outsourcing (BPO)

Posted in: HfSResearch.com Homepage,  HR Strategy,  The As-a-Service Economy

Just a few short years after ADP introduced the basic fundamentals of Business-Process-as-a-Service to the corporate back office with its managed payroll offerings, Workday has rapidly introduced HR-as-a-Service to the corporate, world with its comprehensive HR platform suite, creating a whole new ecosystem of service providers eager to slake the Workday thirst of so many HR heads.

Mention the very words "Workday" to any HR executive today and their eyes light up - they need a Workday go-live on their resumé, just like CMOs need Salesforce experience and most CIOs, in the past, an SAP or Oracle roll-out. However, what's truly disruptive about the new HR-as-a-Service environment that has sprung up practically overnight, is the emergence of a whole new breed of As-a-Service providers now feasting on the lunch of the traditional providers.  What once cost $50m for a complex technical implementation, can now be done for a fraction of the price, with the bulk of the investment being refocused on post-implementation support and HR transformation.

Being able to tap into consultative support that can help with organizational design, or workforce analytics, that is delivered via virtual on-tap models, in addition to the bread-and-butter fulfillment work, has changed the game forever - and for those only just waking up to this seachange, it is already too late.

So let's take a look at how the Workday services environment is shaping up with the industry's first ever Blueprint report into Workday services, with the help of HfS principal analyst and report co-author, Khalda de Souza:

Click to Enlarge

Khalda.... why do so  much research into Workday?

Enterprises are increasingly interested in SaaS applications, as they promise speed, cost effectiveness and simplicity. We’ve seen great and growing interest in SaaS for HR functionality over the last several years and momentum behind the Workday HCM product has been especially strong. Today there are medium and large global enterprises alike deploying Workday, mainly because of its functionality, attractive user interface and its common code instance. Customers are increasingly

Read More »

Posted in: Business Process Outsourcing (BPO),  Buyers' Sourcing Best Practices,  Cloud Computing

There are a lot of negative viewpoints on Britain's capabilities to rebound as an economic superpower, after its heyday leading the world into the industrial revolution a very, very long time ago now. However, when it comes to driving out costs, privatisation and outsourcing of labor, and mercilessly adopting new tools and techniques to make themselves more efficient, their leading organizations are pretty damn good at jumping on the train.

And while the British government is the world's biggest customer of offshore outsourcing (in fact its government has created a whole outsourcing economy of its own), Britain is also home to several of the upcoming automation software firms, such as Blue Prism, Thoughtonomy and IPSoft (a major presence there), the artificial intelligence firm Celaton, and several start-up robo boutiques, such as Genfour, Symphony and Virtual Operations.

Yes, people, when it comes to being first on the bandwagon for experimenting with solutions that can drive out cost and improve productivity, the UK - amazingly after all these years - still leads the way.  Our soon-to-be revealed As-a-Service study, which canvassed the viewpoints of 716 industry stakeholders, including 178 major enterprise service buyers, clearly shows how much more pervasive the adoption of both Robotic Process Automation (RPA) and analytics tools are among British enterprises, compared to enterprise service buyers in the other major global regions:

Click to Enlarge

The Bottom-line:  As-a-Service is changing the service industry dynamics forever, making it possible for smart businesses to get ahead of the disruption curve

As we delve into these unprecedented survey findings, it's becoming abundantly clear that the evolution to As-a-Service will be a long and painful one for many buyers, providers and advisors, but the core fundamentals are about enterprises operating with more speed and predictability, a higher quality of processes and more value-based provider relationships, that can enable them to "plug-in" to the services experience.

Enterprises which have opened themselves up to a lot of global outsourcing relationships in recent years, for example many UK-led businesses, are clearly forging ahead more aggressively with the next wave of As-a-Service value, which is building the foundation for smarter automation, more realtime, meaningful analytics capabilities and a much more accessible, standardized cloud driven delivery infrastructure.  As-a-Service is a global phenomenon and the future Fortune 500 in 3-5 years' time will be made of of many nimble As-a-Service driven firms, which are globally ubiquitous, where most services are sourced, and delivered via intelligent cloud models.  Yes, the Germans will probably still make great cars, and the American leading in life sciences, the Chinese in hardware manufacturing etc., but the true As-a-Service driven organization?  Now that can be anywhere...

Posted in: 2015 As-a-Service Study,  Analytics and Big Data,  Business Process Outsourcing (BPO)