Monthly Archives: Oct 2021

Accenture, TCS, Infosys, IBM and Capgemini leading the way with Native Automation services

October 25, 2021 | Phil FershtElena ChristopherDavid Cushman

We're excited to unveil our eagerly-awaited Top Ten report covering Native Automation Services (click here for your copy).  In short, Native Automation services leverage a range of emerging technologies to create intelligent and automated workflows in the cloud enabling new "native" standards for consistent cross-functional enterprise operations.  Let's remind ourselves that automation is not your strategy.  It is the necessary native discipline to ensure your processes provide the data - at speed - to achieve your business outcomes. Hence you have to approach all future automation in the cloud if you want your processes to run effectively end-to-end.

The report examines the capabilities of 12 service providers. We assessed and rated their native automation service capabilities across a defined series of execution, innovation, OneOffice alignment, and voice of the customer criteria. So let's see how the leading service providers fared:

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Key criteria for rating Native Automation service providers

Native Automation Excellence.  Native automation is one of three enabling capabilities supporting the journey to OneOffice. It covers services that leverage a range of emerging technologies to create intelligent and automated workflows in the cloud, enabling new "native" standards for consistent cross-functional enterprise operations. The top five leaders in our study, Accenture, TCS, Infosys, IBM, and Capgemini, showcased exemplary capabilities across the assessment criteria, demonstrating the inclusion of automation as a standard “native” element of transformed enterprise operations. 

Execution.  Native automation is scaling, but most engagements are still at the front end of the value chain in the planning and implementation stages. Native automation is an essential element of enterprise operations transformation. But remember, the value is from working smarter and solving problems, not from successfully implementing a single-thread technology. The increase in outsourcing and managed services deals points to automation truly becoming a native element of enterprise operations. TCS shone in this category, closely followed bt Infosys and Accenture.

Innovation.  Native automation engagements are becoming more tech-diversified, but robotic process automation (RPA) is still the dominant technology. RPA and process intelligence have become the power couple of automation engagements, packing a powerful combo punch of understanding and automating processes then measuring the impact of the automated processes. Study participants tell us RPA and hyperscalers dominate their partner landscape, with Automation Anywhere (AAI) and UiPath as co-leaders; almost 70% of respondents named them as a top automation partner, followed closely by MS Azure and AWS, reminding us that ecosystems are changing and on-prem was so pre-pandemic.  Accenture dominated the innovation categories, followed by impressive showings by Cognizant and HCL.

OneOffice Alignment.  Service providers say they are delivering OneOffice digital transformation in an average of just 65% of their native automation engagements. This suggests the need to work harder to forge the link between native automation and its essential role in delivering OneOffice transformation. It’s time to walk the walk: Take the OneOffice message beyond the thought leadership and into the deal.  TCS was able to win this category, clearly helped by its merging together of data, process delivery in recent years to deliver a front-to-back experience for many of its automation clients.

Voice of the Customer.  Native automation customers speak, and they want proactive recommendations! One hundred percent (100%) of the customers we interviewed indicated they regard their native automation service provider as a strategic partner. Enterprises largely recognize and appreciate services providers’ proven expertise, skills, innovation, and scale that help make their businesses better. But they want their service provider partners to challenge them and provide more proactive ideas for improvement. Business process and data management services provider EXL was the surprise winner of this category, proving that a deep understanding of clients' institutional processes is so critical when is comes to redesigning workflows.  It is no coincidence its business process management rival WNS also surpassed expectations here, while Genpact was also a high performer.

Bottom line: Automation is the native disciple that sets up the platform to drive AI capabilities to refine your data

Once you have successfully automated processes in the cloud, it is easy to administer AI solutions to deliver at speed in self-improving feedback loops.  This is where you apply digital assistants, computer vision, machine learning, and other techniques to refine the efficacy of your data.  AI is how we engage with our data to refine ourselves as digital organizations where we only want a single office to operate with agility to do things faster, cheaper, and more streamlined than we ever thought possible.  AI helps us predict and anticipate how to beat our competitors and delight our customers, reaching both outside and inside of our organizations to pull the data we need to make critical decisions at speed.

As enterprises grapple with the enablement of their post-pandemic, work-from-anywhere future, native automation is going mainstream. It is rapidly becoming an essential element of enterprise operations transformation—enabling the modernization of work through thoughtful process reinvention and eradication of soul-crushing manual work. Service providers play a critical role in driving transformative solutions and mindset change about how and where work gets done.

HFS subscribers can click here to access their copy of HFS OneOffice Services Top Ten: Native Automation Services 2021

Posted in: Robotic Process AutomationIntelligent AutomationArtificial Intelligence



IBM rebrands its GBS division to emphasize what it actually does: Consulting

October 18, 2021 | Phil FershtSaurabh GuptaElena ChristopherSarah LittleJoel Martin

Almost two decades after its landmark acquisition of PwC Consulting, IBM Global Business Services (GBS) is now IBM Consulting. Just another industry rebrand, you say? Botox for GBS? Not so fast. .

Here are five reasons why this rebrand matters...

1) Clarity is king and consulting dominates what IBM’s services organization does. There have been a lot of misconceptions around IBM’s GBS (Global Business Services) and what the organization does, so part of the positioning with IBM Consulting is to clarify this across the board while pitting itself more aggressively against competitors with deep consulting chops like Accenture, EY, PwC, and Deloitte. With roughly 70% of its $16 billion revenues in the group coming from technology and business transformation projects, this rebranding is aligning the identity of IBM services with the lion’s share of its business activity. Moreover, the term “GBS” is most often associated with centralized internal shared services governance organizations, which is vastly different from the IT and business services where IBM specializes.

2) Simplified organization structure. Behind the rebranding, IBM Consulting also restructured its organization structure to shift from an input/capability-led structure to a more client-centric model. There are now four transformation services blocks that IBM consulting is organized around – customer transformation, employee transformation, finance & supply chain transformation, and industry transformation with cross-cutting cloud services and emerging technology capabilities. All the emerging technology capabilities (automation, AI, analytics, blockchain) are now housed under the same group to try and maximize the value creation opportunity for clients. One of the biggest gripes of IBM clients has been painful navigation across capabilities. This simplification should help.

3) Talent acquisition. There are two roads to travel here for the talent discussion: organic and inorganic talent growth.

a) Organic acquisition. “IBM Consulting” certainly brings more cache than a consulting title within GBS when compared to Accenture and the Big 4. This is an opportunity to strengthen the employer brand at all levels so long as IBM supports it internally with clear consulting career pathways and progression towards a master class of client-facing managing client partner roles. The shift from GBS to IBM Consulting and the strength of its growth should be a boon for IBMs ability to pull talent from top firms during the Great Resignation and straight out of the university gates.

b) Substantive skills and talent growth through M&A. IBM acquired eight firms in since 2019: 7Summits, Expertus, Instana, NordCloud, TruQua, WDG Automation, Accanto #, and Red Hat. Consider this a catalyst for skills-building that accompanies world-class training and assets. IBM ranked #4 in the HFS Employee Experience Services Top 10 report, with notable takeaways on their skills ecosystem. IBM places skills at the center of its people strategy and has a fully scaled internal experience to back it up: half of the revenue IBM earned from 2015 – 2020 is from new areas of the business (e.g., cloud computing, AI, data science, cybersecurity).

4) IBM Consulting leadership has a consulting pedigree and a leader who pioneered the modern-day Accenture consulting model. So many of the leaders within the group came across as part of the 2002 PwC acquisition and have long-since built consulting and managed services practices under the IBM banner.  In recent years, the revenue model has shifted more and more towards consulting and away from commodity managed services offerings where it is increasingly challenging to compete on cost-driven engagements against the likes of the heritage Indian providers and Accenture (with 250,000 of its staff based in India).  Moreover, Mark Foster, the SVP leading the IBM Consulting division, is widely credited as the leader behind the significant growth of Accenture consulting until he left the firm in 2011. He was the pioneer behind the Accenture “diamond client” model, where a laser focus on 150-200 major enterprises has formed the bedrock behind the force that is Accenture today.

5) Divorced from Hardware, finally. With the spinoff of Kyndryl days away, IBM Consulting has clear mandate to focus on business and technology process re-engineering. The Consulting group is free to partner more broadly with hyperscalers, accelerate innovation labs with its Garage services, and be more software first around AI, automation, and emerging technologies like blockchain, IoT, and 5G.  Garage services will become innovation labs for industry-centric consulting services to align technology consulting and software platforms (Cloud Pacs) with industry-centric business transformation for large enterprise customers. Expect a big consulting push around “the cognitive enterprise powered by IBM Consulting” as they meld together Watson, multi-vendor hybrid cloud, Red Hat OpenShift and Enterprise Linux, and Cloud Paks to modernize technology and push with industry-specific software and services offerings.

The Bottom Line:  IBM Consulting now has the structure to take on Accenture and Deloitte, but optics have to be complemented by real talent investment, C-level commitment, technology agnosticism, and client results.

IBM’s shift to emphasizing consulting couldn’t be better timed with a huge talent dearth for outsourcing delivery talent, especially in India.  Our research shows that 54% of the FORTUNE 1000 are racing to stay relevant in the virtual economy, and they need immediate transformational and IT support to make fast decisions.  This lends much more to partnerships with providers with deep onshore talent and a deep consulting pedigree.  If IBM can continue to beef up its consulting presence with organic talent – and perhaps an acquisition or two – there is no reason why IBM Consulting cannot challenge Accenture and Deloitte at the help of the IT transformation market. 

IBM consulting should also make it very clear to its existing and prospective clients that it is not getting out of the “outsourcing” market with this rebranding to “consulting.” The Kyndryl divestiture earlier this year and the contact center divestiture to Concentrix in 2014 provides ample ammunition to its competitors to raise concerns about IBM’s commitment to the BPO and ITO markets which it needs to proactively address,  

Another area where we – at HFS – believe IBM Consulting needs to clarify its position, is with regards to its technology partnerships.  While the firm has been successfully teaming with software firms such as Celonis, Blue Prism and UiPath, it has also had to work with IBM Software which has acquired produces such as myInvenio and WDG, which compete in the market with these firms.  If IBM Consulting can clarify its technology agnosticism in a similar way to the ethos Foster applied at Accenture, there is every chance of success as we venture into unchartered waters.

Posted in: Business Process Outsourcing (BPO)Digital TransformationIT Outsourcing / IT Services



Corporations and individuals must combine forces on this last mile to defeat COVID-19... let us protect each other to return to the lives we cherish

October 14, 2021 | Rohan KulkarniPhil Fersht

“Freedom” appears to be the current central theme of individuals who refuse to be vaccinated against COVID-19m as one of many reasons for refusing to be protected against the deadliest pandemic in over a hundred years. It is essential to recognize that many reasons for not getting vaccinated can be overcome by the enormous data we now have, with over 45% of the world’s population vaccinated with over 6 billion doses.

The data shows that the vaccine effectively prevents deaths and serious illness, the side effects are marginal compared to the effects of COVID-19, and it is the only way to get back to the normal we are desperately seeking to experience again. That translates into supporting all those on the front lines as well as evangelizing vaccinations.

Healthcare workers and teachers are not the villains here

Healthcare workers have gone from being heroes that we cheered at the Pandemic's peak to being threatened, ridiculed, and harassed in recent months. A school association (NSBA), representing locally-elected school board officials that oversee more than 50 million US public school students, has requested the FBI and President Biden to provide them with protection due to the increased threat levels to officials and teachers.

These threats are in response to healthcare workers and teachers encouraging vaccination or enforcing mask mandates, both intended to help protect individuals from contracting COVID-19. In a civil society, threats are a non-starter in any facet. To harass those who protect and cure us of diseases, to threaten those that educate our young minds is unacceptable and unfathomable.

Such behaviors could have profound implications when there is already a high turnover of healthcare workers, sometimes 100% attrition in a typical year, which could very quickly translate into a critical shortage. Our kids are performing below average compared to other OECD countries, and lacking teachers will make the US even less competitive than we are already headed.

We must balance vaccine mandates: If those who are providing services are vaccinated, then those receiving those services must also be vaccinated

The federal government has mandated vaccines to all its employees, as have many states and cities. Corporate America has taken its cue from that mandate to issue its corporate mandates for vaccinations. Many enterprises, including hospitals systems, are issuing ultimatums to their employees to be vaccinated or lose their employment.

The holistic effort to vaccinate vast populations either through free access or mandates appears to be effective with about 66% of the US population over the age of 12 being fully vaccinated and the delta variant on the retreat.

Freedom is a fair concept and must be equally dispensed. If those who are providing services are vaccinated, then those getting those services must also be vaccinated. That would be reasonable to ensure that everybody has a level of protection.

Protect our people to return to business as usual

The airline business has been returning to a level of normality given the strict protocols in place for testing and vaccination. Restaurants in certain cities are experiencing some “normal” due to protocols in place for vaccine evidence. Such examples are beginning to expand across the US and globally.

A critical driver of that return to normal has been the vaccine, which has been highly effective and will likely continue to improve on its efficacy with the boosters. This data is important to support the need for a wider proliferation of vaccines.  For example, recent data from the US shows that 50,000 “breakthrough” cases from the delta variant with vaccinated citizens only resulted in 59 actual hospitalizations. 

Consequently, corporations and small businesses must have the freedom to do what they need to protect their people. Keeping their employees safe is paramount, and if that means mandating vaccines or refusing services to those who are not vaccinated, so be it. This is the path to going back to being in business as usual and enjoying the fruits of freedom.

The bottom line: Freedom must be an equal opportunity right; if individuals choose not to get vaccinated or refuse to mask up because they do not want to surrender their freedom to a mandate, then they must accept not getting healthcare or education, or other services from establishments that have a vaccine or mask policy.

Nurses and teachers are two of our most trusted professions. If we vilify and threaten them how will the rest of the society fair? So, we are calling upon corporations, small businesses, and individuals to help enable healthcare workers and teachers to refuse services to individuals who are not vaccinated and refuse to do so. Healthcare workers must be allowed to refuse treatment in non-emergency conditions as should teachers be allowed to refuse to teach kids who will not be vaccinated or wear a mask in a public setting. In these unparalleled times, we must protect each other to return to the lives we cherish. That is the only way forward.

Posted in: Governance Practices and ToolsHealthcarePolicy and Regulations



Infosys, TCS, Accenture, Wipro, and HCL helped BFS firms go from digital façade to OneOffice during the pandemic

October 12, 2021 | Elena ChristopherPhil Fersht

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The banking and financial services sector remains the largest market for IT and business process services and is generally regarded as one of the most aggressive in terms of emerging tech adoption. However, do not confuse the spend and the adoption with digital transformation. So much of what gets done in established banks and capital markets firms is all about care and feeding of some of the largest and most complex tech stacks and business processes in the world. As with the rest of the planet, the pandemic exposed the lack of digital

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Posted in: Digital TransformationDigital OneOfficeBFSI



ServiceNow and Celonis just threw down the Workflow Platform gauntlet. The darlings of IT and process workflow execution make their joint move...

October 06, 2021 | Tom ReunerReetika FlemingPhil Fersht

The new Celonis–ServiceNow partnership blends operationalizing data science with the capability to design workflows in the cloud.  We are witnessing a determined partnership between the leading IT Service Management vendor and the leading process execution platform. This is a true first in combining an IT-centric workflow mindset with an operations one.  This is where we combine IT orchestration with process modeling, mining, discovery and execution.  And even RPA.  The likes of SAP, Pega, Appian and UiPath will be feeling very nervous right now and surely have to make massive investments to keep pace with what we’ve just witnessed.

This is the boldest move yet to automate complex data with process intelligence

Against this background, Celonis’ strategic partnership with ServiceNow is a bold step that could reshape many IT and business operations discussions across major enterprises. The announcement spans initially a reseller agreement, a deeper integration of both platforms as well as a joint go-to-market.

Notably, ServiceNow is making a strategic investment into Celonis, and partners are expected to launch joint products as early as the first half of 2022. The strategic intent is to link Celonis’ data platform with ServiceNow’s workflow ecosystem to advance toward the broad execution

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Posted in: Robotic Process AutomationIntelligent AutomationService Management



Pounding though a Pandemic... LTI and Mphasis show why enteprise customers want the personal touch

October 05, 2021 | Phil Fersht

While most folks are obsessing with the performance of the IT mainstays over the past 18 months, spare a thought for two IT services businesses that not only entered Covid on a long growth cycle, they also readjusted quickly and carried on their growth stories even during the worst of 2020.  Just check out the quarterly revenue growth paths of LTI and Mphasis respectively:

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Why have LTI and Mphasis carried on their growth unphased?

Big enough to get to the table, small enough to keep client intimacy.  It's the oldest quote on the book for the mid-tier service providers, but couldn't be more true in today's market.  Enterprise clients want to feel they have the personal attention of the CEO and the leadership team when it comes to signing over their technology control.  Rewind 10-15 years, most enterprise CxOs had a direct line to Chandra (TCS), Shibu (Infosys), Jeya (Patni), Pramod (Genpact) or Frank (Cognizant).  Client leaders wanted to feel the personal touch from their services partner leaders, and they were usually personally involved in the scope and negotiations.  Today those same executives are most likely stuck with a client partner, who is literally horsetrading the rate card with them.  Enter the likes of Sanjay and Nitin, who spend most their time talking to their clients, reassuring them, convincing them, but most importantly are available to them.  

Flatter structures and visibility to leadership motivate staff.  Staff want more from their companies these days than a good stock plan and competitive salary - they want to know what their leadership stands for, and want to learn from them. With less bureaucracy and promotion cycles based on merit, not purely tenure, it motivates staff to see how to get ahead, and and having more access to their leadership. Nothing demotivates staff more than seeing weak managers stay in their positions year in, year out, while the rockstars leave, or are sacrificed.  I have even seen hierarchies in some services providers so rigid, you are instructed not to interact with people in the level beneath you.  Yes really...

Sustained profitability helps high performers to be financially rewarded and retained.  In a market where attrition is running at an all-time high, the smart players are identifying their talent engaging with clients and helping them execute and making salary increases to keep them.  Providers like LTI and MPhasis have kept their profit margins in the high-teens consistently over the Pandemic and are in good stead to reinvest in retaining key talent and attracting new blood from start-ups and larger service providers suffering from low morale.

Savvy tuck-in investments and market moves. Mphasis continued to bolster its depth in largest industry, banking and financial services, with its Front2Back transformation methodology and NextOPs framework really bearing fruit during the Pandemic, while also venturing effectively into other industries, such as logistics.  The firm also added delivery depth in the UK, notably acquired Seattle-based digital design house Blink and significantly de-emphasized its reliance on DXC as a client.  LTI merged most of its cloud transformation under its Infinity umbrella mimicking Accenture’s Cloud First  and Infosys' Cobalt offerings, but at a lower price with a focus on outcome or risk-based pricing models. This bought their customer an extra ~20% of possible savings while the downturn driven by the Pandemic was underway. LTI also ramped up its CSP/Hyperscaler partnerships (mainly with AWS) at the right time and added some customers to their book through acquisition.

CEOs who can inspire and motivate their people. Simply-put, making themselves highly accessible to customers and staff has been huge in driving their respective businesses.  Moreover, showing longevity and loyalty to their brands has been a key factor with Nitin recently signing on for a further 5 years at the helm with majority investor Blackstone.

Bottom-line: Big is no longer brand-beautiful

The days where you never got fired for hiring IBM, or ensuring high performance being delivered with Accenture, are not as vogue as they used to be as service delivery levels off across providers and speed/execution take center stage.  Moreover, the top tier of service providers simply cannot afford to focus their A teams on smaller-scale deals that will not fit their high-pressured revenue models. The amount of new business becoming available to the likes of the LTI, Mphasis, Virtusa, Hexaware, Zensar et al is larger than ever and most of the Global 2000 opt for one to two primary global service providers and a couple of these nimble, energized mid-tier firms to keep everyone honest.

Posted in: IT Outsourcing / IT ServicesOutsourcing HerosBFSI