And over at dreamSource, where 82% of the buyers have never completed a training class for outsourcing or shared services governance…
How could you fail to trust these gentlemen? Infosys' Vivek Sharma and Ashu Tandon
Posted in : Business Process Outsourcing (BPO), Cloud Computing, dreamSource 2013, Global Business Services, IT Outsourcing / IT Services, kpo-analytics, Procurement and Supply Chain, Sourcing Best Practises
And over at dreamSource, where 48% of the buyers have experienced strategic skills becoming more important than tactical skills for managing their outsourcing engagements, since they embarked on their initiative…
Rajesh Bhutani (Coventry Healthcare) and Debbie Polishook (Accenture)
Posted in : Business Process Outsourcing (BPO), Captives and Shared Services Strategies, Cloud Computing, dreamSource 2013, Finance and Accounting, Healthcare and Outsourcing, Sourcing Best Practises
And over at dreamSource, where 72% of the buyers work in company’s where the CEO on down focus predominantly on cost…
Gianni Giacomelli (Genpact): with beerTim Madderom (Axis Capital): with redwineStephen Dubner (Freakonomics author): gesticulating
Posted in : Business Process Outsourcing (BPO), Captives and Shared Services Strategies, dreamSource 2013, Outsourcing Events, Sourcing Best Practises
Welcome to dreamSource, where 73% of providers worry they may get fired for only delivering what was agreed in the contract…
Posted in : Business Process Outsourcing (BPO), dreamSource 2013, IT Outsourcing / IT Services, Outsourcing Events, sourcing-change
Afraid of no processes: Genpact's solution head Shantanu Ghosh
Anyone close to business services over the last decade would have crossed paths with one little guy with a huge brain: Genpact’s Shantanu Ghosh. While everyone is familiar with Genpact’s current CEO NV “Tiger” Tyagarajan, and retired former CEO, Pramod Bhasin, Shantanu has frequently been the guy cobbling together the internal teams and the solutions to make it all happen.
I have had many conversations with Shantanu over the years and each time I have come away inspired by someone who is so intimately involved with so many clients and issues in the process delivery industry – he really lives and breathes this stuff.
So when we had the chance to hear his inner-most thoughts on the future drection of the services business, we couldn’t resist sharing them with you…
Phil Fersht (HfS): Shantanu, you’ve been one of the brains behind Genpact’s rise to the pinnacle of the BPO industry in the last few years. Please tell us a little about your background and how you got into this business. Did you always want to be a process guy?
Shantanu Ghosh (Genpact): Thank you very much for saying that Genpact has reached some stage in the BPO business. My background is that of a functional finance expert. I spent my early years in accounting at Pricewaterhouse, then a decade with Unilever in various functional finance roles. Then I spent five years with GE, first at the business level and then at the corporate country level as the CFO. I had reached a stage in my career where I had done the whole functional side of the game, and I wanted really to drive a business. Genpact at that time was just contemplating becoming an independent commercial BPO organization, and moving to the company has provided a huge opportunity for me to come and grow the finance and accounting service line as a general manager. My belief was that in early 2005 the BPO industry was at the cusp of a breakthrough and I wanted to be part of the action. Also Genpact provided an unique opportunity for paid entrepreneur ism.
Phil: You talk a lot about performance enhancement at the enterprise process level, and it sounds very impressive. But what do you really mean, and is it something realistic to which many of today’s businesses can aspire?
Shantanu: Phil, our fundamental belief is that that all enterprises are basically a conglomeration of different value creation processes. Source to pay, record to report and order to cash, the supply chain processes, customer acquisition, the claims process in insurance, etc.
I think the way businesses compete are on the strength of their products and the strength of their operating performance. And operating performance is a direct function of how well those end-to-end processes run. There is a lot of empirical proof on that area. I do think performance enhancement at the enterprise process level is something realistic to which businesses can aspire to. If you look at moves toward global business services for back-room processes, if you look at what people have done with manufacturing processes…clearly there is an increasing awareness, understanding and intent to drive process performance to a level where it becomes a competitive differentiator.
Phil: The operational challenge behind finding these new thresholds of performance, about shifting the corporate mindset from one of cost to one of value, is something a lot companies claim is their biggest challenge today. How do you think clients can learn from past experiences and start to offer best practices to others?
Shantanu: The performance of different enterprises in this area varies significantly. It’s obviously far easier to focus on cost, and much tougher to focus on the other dimension of performance which is value or effectiveness.
In terms of best practices, a value-driven model needs three primary things. First, the tone must be set at the top. Value is often driven between different functional silos across the value chain, and it’s very hard to achieve that with a bottom-up traditonal budgeting approach. Second, you need to create an empowered organization that can look at driving value across end-to-end enterprise processes … As evident by the increasing trend of Global Business service groups. Many organisations have tried to do this in their existing federated, siloed organizational model, and that obviously produces muted or mixed results. Third, value creation is not one shot process, it is a long-term, multi-year journey that includes being able to understand where one’s performance is, being able to objectively compare it and benchmark it against others, being able to create a roadmap consistent with organisational constraints of money and leadership bandwidth and change appetite, and then having the tenacity to walk on that roadmap.
Phil: Can you give us some examples of failures?
Shantanu: Many of the failures are when there has been a one-dimensional view of how can I get the most efficient, both in terms of cost as well as maybe cycle time and all, without actually being clear on the desired business value or business impact.
A classic simple example on this is in the collections or order to cash area. If you only optimize on the dimension of cost, you will try to maximum the number of accounts one particular agent can call in a given time frame and the minimise the time needed on each call. Whereas, if you optimize on the option of value, then suddenly you will think about what kind of analytics and technology you can use to try and figure out who to call, when to call, how you take the analytics upstream to ensure you are not on-boarding customers with credit limits issues, or fixing the billing process to eliminate the need for a lot of calls etc. It completely changes the game of how much outstanding debt you have, or how much you have to write off in bad debts and those benefits are order of magnitude higher than just cost. The second most common reason for failure is to underestimate the change management issues… Organisational habits are tough to break and all standardisation and optimisation initially looks like an impediment to flexibility and reduced control for frontline and operating people in the businesses.
Phil: Our research shows that change management is topping enterprises’ agenda in 2013. Why do you think this is? Why do you think so many want to change, but they struggling to put together programs to help themselves? What works or doesn’t work for clients, when we get into these change issues?
Shantanu: I’ll tackle these very interesting questions at two levels, First, why change management tops companies’ agendas today is that they are more looking to drive value rather than only plain vanilla cost reduction. And driving value means cutting through traditional company hierarchies, cutting though traditional organizational models of functional silos. That’s a big change. That’s not the way people are used to working. So the first fundamental barrier to making change happen is the fact that it goes against how people have worked for many years, many decades. The second piece is that driving change requires a burning platform. Many failures we’ve seen are due to the fact that the organization and the leadership team have not been able to either acknowledge or articulate a burning platform for the troops to rally around. Change is always painful. Change means you have to learn new things, you have to do things differently, you have to let go of people, you have to change your ways of working…none of it is easy. And for people to go through that process, you need to believe in something bigger, something better; you need to have a vision that fires you up.
Phil: So… what’s next for Genpact? You’ve made the Winners Circle now – you are one of the big, glitzy, top-tier providers in this space. Are you ready to declare victory and rest on your laurels, or are we going to witness a whole new impetus and focus on where your firm wants to go next?
Shantanu: Phil, we believe that we are just at the start of our journey. We are a small company, just about $2 billion in revenue. We’ve been in the commercial space for less than a decade. We’re in a market and in an industry that is hugely under-penetrated. We have a fundamental belief that this industry will double, triple, quadruple in size over the next few years. We feel very privileged to have had some role in defining the way the industry works, and that we can continue to drive that definition.
Demonstrating flawless execution
There are two aspects we feel very deeply about. One is helping our clients succeed by competing through smarter processes. So, everything we do is focused on how our customers create competitive advantage through the power of their operating model in the marketplace. The second thing we believe is that the market and the industry have really started shifting fundamentally from a pure cost equation to a cost plus value equation. It would be naive to think that the shift has happened significantly. But there is enough evidence for us to be very encouraged that the shift is happening and it’s really one way…it’s not going to change. And we believe we are uniquely positioned to both drive and benefit from that particular shift.
Phil: So the final question… you are awarded $10 million. What will you be doing in six months time?
Shantanu: Well, I’ve had a fabulous eight years in Genpact, but it’s been very busy, so if you give me $10 million, I’ll possibly be on a very expensive long holiday. But seriously…if I had $10 million to invest, there are so many areas of competency that we could invest in to benefit our business and customers. Whether it’s in the Analytics space, or in the regulatory compliance space, given the changes that are happening or twenty other such interesting areas; if I had $10m to experiment with, I would put that into our new products innovation funding in a couple of those areas.
Phil: Hmmmm…. good answer 🙂 Thanks for your time today with our readers, Shantanu. It’s been quite a journey for both you and Genpact and we’ll love to hear more from you further down the road.
Shantanu Ghost (pictured) is Senior Vice President and Global Head, Enterprise Services, Solutions, Transitions and Lean Six Sigma. You can view his full bio here.
Posted in : Business Process Outsourcing (BPO), Finance and Accounting, Global Business Services, HfSResearch.com Homepage, HR Strategy, Outsourcing Heros, Sourcing Best Practises, sourcing-change, Talent in Sourcing
SVP and Research Fellow, Customer Satisfaction
As we revealed last week, most of the big analyst personalities have seemingly fled the analyst industry… many for the riches on offer from their vendor clients, clearly seeing more ROI from employing them, as opposed to purchasing their firm’s services. However, this hasn’t prevented the remaining legacy purveyors of analyst services from making a living.
So what’s left in these firms after the rock stars have left the building? Let’s examine the cast of characters that many of us frequently have the good fortune to meet in briefings, conferences, airport lounges, hotel bars, psych wards etc.
Mick Jagger Analysts:
Not all the rock stars fled… some stayed well past their sell-by-dates, clearly not mentally prepared for a foray into the real world. They still drift around analyst firms, making occasional appearances in executive briefing sessions (or sometimes just walking out of them halfway through). Their research productivity is usually about one thought-piece a year, which is usually miles from reality, but everyone tells them their piece was amazingly thought-provoking, having read the first paragraph.
They still show up at the odd vendor analyst conference, where they tend to knock back too much scotch on the first night and spend the next morning sleeping it off in their hotel room before making a token appearance at the one-on-one briefing in the afternoon.
The High Performer Analyst:
A “High Performer” these days is pretty much an analyst who does what he/she is paid to do and actually has some reasonable research to share with the world. They spend a good deal of time conversing with both buyers and vendors and actually cobbling together some genuine research for all to read. Sadly, their wares are normally wedged miles behind some firewall somewhere where noone can find it, even when they’ve paid for it. What’s more, the months it takes to get their research past their internal red tape and editorial teams drives them crazy, and their firms are unlikely going to let them blog (and they get no credits towards their bonus for blogging, in any case, so why do it?). Motivation quickly slips away and their CVs normally slip onto the market after a couple of years.
The Egomaniac Analyst:
Analysts who got their egos stroked and loved it so much, they realized they needed them stroked… every minute of every day. Writing one good piece a quarter wasn’t enough to slake their thirst for praise, so they attempt to hop on every hot area they can and put our some fluffy piece of prose to get attention. Their focus on quality quickly wanes, as having their name in lights, in as many places as possible, trumps all else. After trampling on all their colleagues’ areas and sucking up all their manager’s time in the process, they eventually get booted out and apply for any analyst job they can, as they do not have the real confidence to go it alone. Usually, some analyst firm will pick them up and go through the whole egomaniacal process with them… all over again.
The Spin Doctor Analyst:
Analysts who feel doing actual research is either beneath them, they simply feel no compulsion to do any, or they may not actually know what “doing research” is. Instead, they get their hands on a few reports from others and cobble together their own version of the trends. Good spin doctor analysts can do this very effectively, and very convincingly, leaving the world to believe they grafted long and hard to create this vision, when all they did was spin the ideas and views of others. They frequently offer to “collaborate” with other analysts on reports to create the impression they do some actual research, but in reality just want to slap their name on the report for showing up at a couple of meetings.
Sadly, the average spin doctor doesn’t get away with it for too long (there have been several embarrassing examples of analysts plagiarizing over the years), but many of the good ones build a nice career doing it. Usually they get promoted into practice lead areas, so others can actually do the real work, while the spin doctor can spin their stuff all day long…
The “Annoying and complex Questions” Analyst:
Yes, every conference is never complete without the analyst who just has to chime in with some annoying questions. Frequently, some will start asking a question, but forget the original intent of why they are asking the question, proceeding to drone on for a couple of minutes spouting their views on something that sounds complex and undecipherable to the rest of the audience. Others will launch into some direct questions to probe at the weaknesses of the presenter’s content, which they really should do in private, instead of trying to embarrass the presenter.
These analysts tend to attend every single conference and vendor event imaginable, with the hope that, one day, they will become enlightened and not have to ask a really annoyong question in front of the whole room.
The “Plodder” Analyst:
Sadly, this analyst comprises the good proportion of most analyst houses. Simply put, the plodder isn’t very good, doesn’t rock the boat and drifts along checking the boxes and meeting their firm’s metrics (sound familiar?). He or she smiles politely when spoken to, produce average-to-mediocre research and isn’t going anywhere anytime soon – they simply aren’t very good. They get left largely alone to plod along and keep the machine cranking along.
The “Why on earth are they still Employed” Analyst:
Yes, there’s always a few lurking around. Analysts who are so bad everyone keeps out of their way. They tend to cover boring areas noone cares about and get wheeled out for the occasional client meeting when their area need a “face” tied to it. Their goal in life is to be as invisible as possible and eke out a cosy living until the eventual day they get that call from HR…
The “Drive-by Consultant” Analyst:
Analysts who come from the buy-side and proceed to spend every day talking about “what is was like when they were a CIO” etc. They do not see the need to do any actual research, but will put out a few flashy pieces on the good ol’ days and the incredible best practices they initiated. Typically, the “Drive-by Consultant” Analyst can pull off this game for about three years, whereupon everyone has become tired of the same anecdotes being rolled out. These analysts tend to sneak back to the buy-side at this point, chalking up their three wonderful years of being an “analyst” before re-entering the real world again.
The “Vendor Marketing” Analyst”
Analysts who come from the vendor side, with intimate knowledge how vendor marketers work. They get obsessed with showing up at vendor briefings and writing up little blogs and briefs on what they thought of the occasion. They do all the things to press the buttons of the vendors… little tweets of praise from their events and announcements, blogs (if allowed) of the vendor’s next groundbreaking industry maneuver, and profiles of their favorites. These analysts typically go through a one-to-two year honeymoon of vendor-schmoozing, but quickly get bored of the same dog-and-pony show and start interviewing for their next salary-doubling move… back to the dark side.
The “Screw this, I can do this better Myself” Analyst
Analysts who are typically some hybrid of many of the above, who decide they can walk off into the sunset and set up their own little shop. Some just declare they are a one analyst show, while others put up a facade that they actually have an analyst team. A few do actually have analyst teams, but still can’t resist writing the odd cheeky blog about the analyst industry 🙂
Posted in : Absolutely Meaningless Comedy, Confusing Outsourcing Information, HfSResearch.com Homepage, HR Strategy, Sourcing Best Practises
Hear Phil Fersht talking to HR Technology’s godfather, Bill Kutik
Click to listen to the recorded interview on iTunes
You may recall our announcement to the world, over three years ago, revealing the launch of outsourcing analyst firm HfS Research… and we first mentioned this on Bill Kutik’s irreverent radio show.
Tune in to listen to our latest conversation and you’ll hear more about:
Click here to listen to Phil and Bill
Produced by Knowledge Infusion, an Appirio company, and hosted by independent industry analyst Bill Kutik, selected last year as one of the world’s “Most Powerful HR Technology Experts,” the bi-weekly interview show provides leading HR business content and insight into up-to-the-minute trends.
Posted in : Business Process Outsourcing (BPO), Cloud Computing, HfSResearch.com Homepage, HR Outsourcing, HR Strategy, SaaS, PaaS, IaaS and BPaaS
[embedplusvideo height=”390″ width=”640″ standard=”http://www.youtube.com/v/3qfBiz64Axs?fs=1″ vars=”ytid=3qfBiz64Axs&width=640&height=390&start=&stop=&rs=w&hd=0&autoplay=0&react=1&chapters=¬es=” id=”ep6183″ /]
Posted in : Absolutely Meaningless Comedy, Sourcing Best Practises
There’s been a lot of backchannel lately regarding high profile analyst departures to vendor organizations, with Thomas Otter, Gartner’s hugely popular VP for Human Capital Management, hopping to SAP’s recent acquisition, SuccessFactors.
Naturally, SAP’s competitors are all freaking out because they’ve invested so much time and attention in Thomas, while Gartner can’t be happy as its clients shouldn’t care whether they’re buying Bill or Ben… they should be buying Gartner.
What’s worrying, is the recent succession of high-profile analyst stars making vendor moves, for example, Jim Holincheck’s switch from Gartner to Workday, Stephanie Moore from Forrester to Ameritas Technologies, Mickey North Rizza from Gartner to BravoSolution, and even one of HfS’ early stalwarts, Euan Davis, to Cognizant, as the latest examples.
Having worked in the big ticket analyst world myself with IDC and AMR (leading up to the Gartner acquisition), I can vividly recall the changing attitude of analyst firms towards their high profile analysts, who commanded top-dollar for their clients to have them on the end of the phone. When I joined IDC as a mere child, the rock stars analysts were what made the firm – and the fledgling analysts looked to emulate them as they gained experience. Plus, the analyst firms tolerated them because they brought in the clients and created a lot of attention from media. The stars were their real differentiators.
It wasn’t until the last few years, with the advent of analyst blogs and the easy capability for smart analysts to nurture their digital infamy, that the big-ticket analyst firms turned against the rock-star model. They wanted their clients to pay to spend time with whatever analysts they chose to put in front of them – and if there was an analyst departure, they could quickly (and quietly) slot some other individual into that role to fill their place. No-one should care, it’s all about the analyst firm brand, not the individual analyst, isn’t it?
Big Data… Cloud… Mobility…. will transform the enterprise
It’s my personal concern that the exodus of great individual analysts from the great analyst firms is symbolic of a slow death of the romance and intrigue of the industry analyst industry, as we once knew it. The tech analyst industry grew up on great personalites and thought leaders, who thrived on innovation and the exciting changes technology was bringing to the world. Today, the succession of turgid reports, many of which read like they are written by automated robo-analyst applications with the words Big Data, Cloud, Analytics, Mobility and Transformation being spewed out at periodic moments, is killing research as we know it.
Here’s why the demise of the rock star analyst is depressing for the analyst industry:
1) Clients value relationships with individual analysts more than written research. People don’t have time to read more than a few paragraphs of research these days, and prefer to have the key insights presented as a few bullet points to accompany a live discussion with the analyst. The watchword of the research sales pros these days is always “research sells, but relationships renew”.
2) People want to trust with whom they share their confidential information. The best analysts are those who regularly talk to the customers of the vendors and can deliver real insights and opinions of their products and services. The more a good analyst becomes intimate with the vendors, the more valuable the advice and validation that analyst can deliver to the vendor. Moreover, the more a good analyst knows the vendors, the better they can inform the customers of software and services offerings. That means clients need to have individual analysts they want to get to know and trust.
3) Analyst firms are caught in a Catch-22 between their corporate brands and their individual analyst brands. The paradox is that the handful of analysts who reach the status of being “good” quickly become rockstars and get whisked away to the rich vendors. For example, it’s far more valuable for the likes of SAP to “own” Thomas Otter than to share him with their competitors. So the crux of the matter is, simply, that if the likes of Gartner et al. can’t (or simply do not want to) create an environment where their rockstar analysts can prosper and be happy for the bulk of their careers, then they may as well let them all leave and milk the robo-analyst model that is more scalable and easier to control. However, if that means they will ultimately lose business because their clients aren’t satisfied with robo-analyst, they have a problem…
4) Rogue analysts of varying quality are setting up their own “boutiques”. There are a host of individuals who have hung out their own shingles in recent years, and some are forging a living, based on the relationships they developed when they were in the big analyst shops. While this creates some excitement, especially when a genuinely decent analyst starts putting out some good research and insight, there is also a host of average-to-mediocre “analysts” exploiting social media and vendor ignorance to publish shabby (and often incorrect) research that confuses the market place. We live in an unregulated world where anyone can suddenly don an analyst cap and pose as some form of “expert”…
The Bottom-line: The information and research industry is experiencing a fundamental shift… surely the analyst firms will have to change their ways soon
However which way we look at it, the sizzle and anticipation when a new analyst report comes out is becoming a shadow of what it once was, and the levels of cynicism and negativity towards analysts are reaching an all time high. What’s more, the overall desire from companies to read and digest many analyst research reports has dropped significantly in today’s information-crazy world.
So much data and insight is proliferating the Internet, the LinkedIn groups and other digital communities, that the value of many once-acclaimed analyst reports is simply not what it once was. Sadly, as long as the big-ticket analyst firms are milking their clients and making money, they are unlikely to change. However, research is a discretionary expenditure, and ultimately if the value is diminishing, so will the investment. If clients want to invest in relationships, they will ultimately take their money to those firms who can provide them…. or directly to those individual rockstars themselves, if they are still around.
Posted in : CRM and Marketing, HfSResearch.com Homepage, HR Strategy, kpo-analytics, Outsourcing Advisors, Talent in Sourcing
Why is it always the Americans at the head of the queue when it comes to increasing quarterly profit margins? But, even more intriguingly, why are they also leading the way when it comes to attempting to improve their capabilities when they outsource? Our recent State of Outsourcing Study 2013, conducted with the support of KPMG, clearly shows the differing mission-critical business motivations across the main three global regions, when it comes to ITO/BPO:
Click to Enlarge
So, in our true style of insulting everyone from every continent with sweeping generalizations, let’s take a closer look:
North American Enterprises:
Simply put, these firms are a lot more experienced with outsourcing IT and business processes, and a good proportion of them are today showing a good deal of maturity as a result. Much of this is because outsourcing has traditionally been a game for the large corporates to play… and most of the large corporates are based Stateside. Moreover, the biggest “lever” of attractiveness over the last 10+ years has been wage arbitrage to India, hence it is those English-speaking enterprises with the most to save, who are the prime candidates to benefit financially in the short-medium term. This also explains why the UK, then Australia are the second and third most mature countries, respectively, for ITO/BPO.
What’s most interesting here, is the fact that cost-reduction is no longer the main dominant factor behind outsourcing for American firms – effectiveness measures, such as process standardization and re-engineering, are nearly as important, but, most encouragingly, high-value capabilities, such as improving analytics, accessing new technology and talent – and proven provider offerings, are mentioned as mission critical business drivers by a quarter of North American firms.
Simply put, many organizational leaders are waking up to the realization they are running out of wiggle-room in terms of finding massive cost savings simply from labor arbitrage, and the only long-term measures to find new thresholds of productivity is through smarter process redesign (and standardization in areas where there is limited competitive advantage to be had), a more analytical workforce that can help the firm make faster and smarter decisions, and a more flexible operations infrastructure that can scale to the needs of the business. What’s more, our research shows many of the larger enterprises viewing outsourcing a part of a broader framework for achieving business objectives, alongside internal business functions, shared services and offshore captives. It’s being viewed less and less as a siloed strategy for cost reduction, and more as one lever of many for achieving better productivity, tighter operational control and access to external resources and acumen.
Moreover, an encouraging economic period traditionally drives North American firms to evaluate more radical opportunities, and outsourcing frequently rises to the surface as a genuine change-agent during times of economic stability.
European Enterprises:
Cost-reduction and standard delivery requirements still dominate most European firms, with the exception of a handful of enterprises in the UK. Simply put, many of the large-scale European enterprises are far less experienced when it comes to outsourcing and offshoring as their North American counterparts, and many offer a less mature, “just get it done” attitude. The majority do not really want to change, and do not feel the need to transform processes or improve their analytical capabilities – or even if they did, they certainly do not view an outsourcing relationship as an opportunity to do a lot more than drive down some costs, standardize some processes and get some better flex into their operating model.
Interestingly, there does seem to be a notable increase of Euro firms viewing outsourcing as an opportunity to access some quality talent (21% state this as a mission critical driver), which is surely a result of the shortfall of affordable quality IT talent available on the European continent and the proven success of the ITO model for many global organizations today.
Couple all of this with a horribly nervous European economic outlook and you quickly get the picture why outsourcing just isn’t everyone’s cup of tea these days. Why rock the boat even more, when everyone’s already seasick?
Asia/Pac Enterprises:
It’s difficult not to sweepingly-generalize when you have the likes of Japan lumped in with Malaysia, India, China and New Zealand, but the underlying trend here, is that many firms view outsourcing as a real chance to improve their processes, and globalize their operations. They are less enticed by cost-reduction – and this is often because low cost labor is already available locally, in addition to the fact many AP firms are scattered across the region without massive repositories of centralized staff do to a cost-slashing “lift and shift”.
It’s clear many AP firms see outsourcing as a quick route to get from “A to C” with some areas of the business that could really benefit from a more standard solution, such as payroll, procure-to-pay or ERP maintenance. However, what’s also clear is these organizations are miles away from recognizing real strategic value from outsourcing, with only one-in-every-seven organizations viewing outsourcing as a key driver for improving access to new talent and analytical capabilities.
So these immature adopters are viewing the tactical benefits first and foremost. Perhaps that will change in a few short years as uptake of global sourcing models picks up… but it’s still very early days for this region.
The Bottom-line: Tactical measures continue to dominate, but ambitious North American buyers are starting to lead the way with a more progressive approach to outsourcing
We can bemoan the old “outsourcing is all about cost and meeting green lights” adage, but there are some genuine positive signs that our weary operational warriors are beginning to take a more progressive approach to outsourcing these days.
The fact a quarter of North American buyers now view analytics, talent, improved technology and provider maturity as mission critical shows that a portion of this industry is finally beginning to move the needle to achieving more than the basics. Smart governance leads realize they need to build careers from managing outsourcing engagements, and if they simply sit back and check boxes on spreadsheets, their own employability with soon come into question.
What’s more, shared services has struggled similarly to achieve higher level value – and over a longer period than outsourcing – and there is a genuine coming-together of operational governance models, with the likes of Global Business Services being tested as the future operating model. Are we at an inflection point? Yes, I believe so… albeit very “gradual” one!
Disclaimer: before you non-Americans go piling in, the author of this article, Phil Fersht, is actually a British subject currently living Stateside
Posted in : Business Process Outsourcing (BPO), Captives and Shared Services Strategies, HfS Surveys: State of the Outsourcing 2013, HfSResearch.com Homepage, IT Outsourcing / IT Services, Sourcing Best Practises, Sourcing Locations, Talent in Sourcing, the-industry-speaks
