Making hay after the sun has set on legacy outsourcing... meet John Haworth

July 29, 2015 | Phil Fersht
John Haworth, HfS

John Haworth is Chairman of the HfS Sourcing Executive Council (Click for bio)

So what do you do after a rollercoaster career working in ERP software, HR services, sourcing advisory and finally the BPO lead for one of the largest healthcare insurers?

Where do you next take a career, which was centered on traditional services and outsourcing, when all you want to do is challenge the old model and bludgeon a path towards the new?

Of course, you already knew the answer... come to HfS and make some serious trouble.

John has been intimately involved with the HfS community for several year as a service buyer and has long talked to me about his desire to "saw off the legacy".  So when we reached the size and need to have a dedicated leader of the buyer rebels, armed and ready to hive off the turgid, valueless detritus of yesteryear's transaction-dom, there was noone better to ask to fill the spot.  And he loves it so much he's already written more research pieces than the analyst team in his first month on the job.

So let's find out a bit more about John's plans for the HfS buyers council and a little about himself too...

Phil Fersht (CEO, HfS):  Good afternoon John! You took the decision recently to join us at HfS Research and we'll talk about that in a minute, but first could you could give us a bit of your own background?

John Haworth,Chairman of the HfS Sourcing Executive Council: Like a lot of people I think I'm in this industry somewhat by accident. The reason it wasn't by design is because to some degree the industry as we know it didn't exist, so there wasn’t anything for anyone to aspire to become part of. I think if you go back twenty years you'll find strong BPO examples starting to show up. But the seeds had been planted in this industry before that, largely by ITO players and “service bureaus” like ADP or the Sabre reservation system, for example. There has been time sharing in the IT world for a long time, but moving business processes outside of the walls of companies became a rather noble ideal; and I happened to be around when I think some of the very first examples of that were playing out. When I was the co-founder of the HR outsourcing business at Fidelity, there was not a lot of company in the market, and we were essentially inventing a category, including broad HRO—payroll, benefits, HRMS, talent, etc. There was not a lot of company in the market at that time in the other BPO categories, Accenture being the most developed.

We actually co-branded an offering that we put in the market that was one part business process from Accenture and one part Fidelity's capabilities in HR systems for defined benefit and defined contribution plans. We were ahead of the market in that, but I think we both took away from each other what could be learned at that phase of the industry's development. As I said, this was about 20 years ago by now, so, by now, we all have lots of experience. We could not have imagined how broad and deep this model has become.

I've had the good fortune of being in a position where all of the aspects of the business become a career for me, because I've kept it interesting by moving from the sell-side to the buy-side and then as an advisor in-between. I'll tell you, this is one way to continually learn and also develop a much deeper appreciation for what the realities are on the other side of the table, which I think is incredibly important to the industry in order to advance its overall success. It is, after all, a model of trust and faith in the other party to live up to commitments. Until you have sat in the other seat I don’t think you truly appreciate what can and cannot be moved in any given deal, or in any given business model.

Phil:  So what made you decide to join a company like HfS at this point in your career? 

John: I'd say two things. One, it's the right time in my career to take a step back and reflect about not only where the industry has been, and two, to participate in a positive way with where this blossoming industry is going.

I think it's an exciting time right now, as we're seeing the rise of truly global markets in labor, in intellectual property and in the supply chain of services, sort of broadly defined. If you combine that trend toward the ubiquity of connectivity and computing power, with the ability to add value at the individual and small organization level, you see that we may be on the verge of something quite big. This could be a very great opportunity area for companies around the globe to be born and prosper in a very short time. So it's a very interesting time to step back and be more of an advisor, to address this latest and largest wave with the insights born of the experiences that I gained over time.

To help anticipate where the challenges might arise and what we can do about them is a service that those of us that serve as researchers and advisors can continue to do in favor of this industry. It's always fun to be involved on the leading edge things, and that's why HfS was attractive to me. Because I've identified with the mission of HfS since it was born on the web and as blog, and I've seen the impact of community on both understanding the market more completely, and now even helping to shape its next phases. Why? Because 100,000 people thinking generally around the same subjects are a lot smarter than any one person or any group of people usually are. No one has a monopoly on this kind of knowledge—but to be able to participate and guide this explosion at the source, where a lot of people are thinking original thoughts and having similar insights, is something that HfS is accomplishing. And I believe this is the way that we are really going to propel knowledge forward, in the world of the future. Crowd-sourced genius, if you will.

Phil:  John, you've taken on the role of Chairman of the Sourcing Executive Council at HfS, representing the service buyers in our global community. With the big event coming up in Harvard Square at the end of the year, can you give us some flavor about the theme and what we can expect?

WS-Whats-Hot-Sidebar-Promo-BlogJohn: I'd say that one of the biggest things we'd like to do right now is establish the buy-side of the HFS community, as a more far-sighted, collaborative, and motivated group. We want to bring out and respond to buy-side leaders who have largely kept to themselves, lacking a forum and the trust factor that our community has been able to develop. I think a lot of corporate people have had private thoughts about this industry, but if HfS can convene these people and help to draw out what's really on their minds, what's working, what isn't, what's troubling, what the future needs to look like—this would be of great value to service providers and industry innovators.

In our events, we usually succeed in focusing our buy- and sell-side leaders—also advisors—on a very important topic area that really hasn't been developed very deeply elsewhere. So the December event (Defining and Realizing Business Outcomes: HfS Working Summit for Service Buyers) is meant to crystallize our current concern (as-a-service and its broad implications) before a room filled with some of the smartest people that we can assemble—and the nicest people as well, I would add—who are community-minded and would really like to take this industry to the next step. We will all be focused on this question: How do we deliver business outcomes to the corporate buyers, in a way that keeps the industry healthy and evolving? In this time of rapid change—and even radical change—how do we fairly balance out the views that we get from sell-side, buy-side, and the concerned intermediaries? HfS events have proven to be a unique and valuable forum for sincere participants who are full of ideas and full of valuable experience. We intend to build on that tradition with more events, and more challenging topics. Harvard Square from December 1 -2, 2015 is the kick-off for this new emphasis.

We will be about outcomes. This will come from coupling the real world experience on the buy-side, with what it's like to actually operationalize some of the available leading edge technologies and innovations. We will explore how to fairly price some of these things. It is all part of creating workable outcomes—I think that buy-side people really need to have a rallying point to come up with a kind of jointly articulated set of agreed upon norms, and agreed-upon beliefs, at least for the near term, about what's really needed versus what might be on offer from the sell-side. It's all about market efficiency at the end of the day, and that's to the degree this market becomes efficient it will continue to prosper. These are the outcomes that we aspire to and that can only occur in the atmosphere of trust and collaboration that characterize HfS events.

Phil: How would you, John, compare the dialogue that we're having today to when we started doing these buyer summits four years' ago?

John: Phil, I think outwardly some of the questions look the same, and perhaps they always will. How do we deliver value? How do we develop trust? What are the mechanisms that we use to advance the aspirations of both sides? Those are, let's say, contracting norms, contracting approaches. Some of that looks the same and some of the ideas look the same. What's changed, what's new and different I think is this technology explosion we are living through, and the continual rise of social, mobile, and cloud-based apps and services. The sophistication of the technical environment that everybody lives in, is just sweeping through everything and it's changing everything. It's turned the outsourcing model into something that is forced to change, but in ways that I think that HfS has characterized as the emerging As-a-Service economy. We have been leading the way in understanding implications of the merger of new technology with the old-line outsourcing service ethos.

Today, what was formerly called outsourcing is largely migrating to the As-a-Service model, which combines social, mobile, cloud, intelligent applications with processing and support workforces that enable the new outsourcing model. That's where outsourcing has gone and that's where outsourcing is going to continue to go. This is a shift that I think we all recognize, and while some of topics we address outwardly look the similar to those in prior years, the context in which these things are happening has changed drastically. Our expectations of outsourcing have to change as well. So I think this is very exciting time to be convening the buy and sell-side in a way that, to my knowledge, nobody else is doing in the market.

Phil: Tell us a bit about some of the exciting presentations we got to look forward too, particularly the Keynote that you've arranged for us, John.

JohnBecause we're having an event in Harvard Square, where HfS is headquartered, and a lot of us have been associated with the Harvard and MIT environments over the years, we thought it would be a good idea to try to ground some of what we're doing at least with a smattering of an orientation coming from the Harvard Business School! We're delighted to have Dr. Francesca Gino as our Keynote speaker. Dr. Gino is of special interest to us because her specialty is negotiation, especially in the psychology of negotiation. If you break down what I said earlier about where we are as an industry, and how we need to collaborate in order to create satisfactory business outcomes in an environment that is radically changing on both sides, it is clear that progress will demand evolved negotiations between buyers and sellers. These will probably look different than the relationships that existed in the past and the negotiations that existed in the past.

So bringing our conference attendees into the presence of someone who's thought deeply about the psychology on both sides of the table, and what it takes to really understand each other and make progress, something that seems very apt to us. We're delighted to have Dr. Gino open our event and establish the tone for what we hope will be the new era and the sort of crowning glory of the HfS “insight machine.”

Phil: The crowning glory! Absolutely love it! Good. So, any final thoughts from you, John, as we hurtle towards the end of the year, and some of the things we can expect to from some of the thought leadership that you're going to be providing? 

JohnI think, Phil, one of the things that I'd really like to do is, as I was suggesting earlier, give voice to the buy-side in a way that isn't my voice, but it is a collective voice that starts to be actionable and useful to the sell-side. So that we're not wasting cycles, wasting each other’s time. I think what emerges as the sine qua non of the world of the future, if you will, is that change happens and it happens very quickly. So there is an opportunity for us to make the market more efficient. We can make sure that that the sell-side isn't making errors with their offerings and that the buy-side isn't buying things that aren't real, or that don't matter or that will lead them down the wrong path.

We're doing a real service to the industry to the degree that we can inform the industry and help them make smarter decisions faster in this dynamic environment. The entire industry—both buy- and sell-side—has to deal with the doubling time, if you will, of change in the environment. We will deliver the real service to the market, which has always been the goal of HfS, if we can help the industry as a whole make better choices, faster. I think we really want to rise to the occasion here and be the one research and analysis firm that is aspiring to do this and it is actually able to do this because of the methodology that we perfected, our strong community, and our collaborative events. I think that is going to be where the better answers are coming from.

Phil: Good stuff. We're excited to have you on board John, and I think as the excitement grows towards the event at the end of the year and the ones beyond that. Will be hearing a lot more from you. So thanks very much for your time today. 

John: My pleasure, Phil.

Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesCaptives and Shared Services Strategies

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