Did HP recruit the right Republican? With the 180-degree strategy flip over the “sale” of its PC division, shouldn’t HP have hired the master of the 180 himself? And is there a difference between “keep” and “couldn’t sell”?
One can ask many questions as to why HP’s new CEO made such a dramatic reversal of Léo Apotheker’s decision barely two months’ ago. There’s nothing wrong with making “180’s” with product and strategy decisions – the very best businesses in the world have been quick to admit bad decisions and correct them. Even the great Steve Jobs made some 180’s in his career… but none of them in barely 2 months.
However, I believe the answer is very simple: HP’s board has had a deep look into its very soul, and had a very scary premonition of where it was headed. It saw its future existence without its heritage hardware businesses, becoming predominantly an enterprise IT services organization with a curious software acquisition. Yes, it was running the risk of morphing into a me-too to IBM. IBM has just appointed a laser-focused services leader in Ginny Rommety to take them forward as a services mammoth. Enterprise services is IBM’s DNA. HP has hired a politician and Internet auctioneer entrepreneur. Hmm…
Did Meg make the right call to keep PCs? Yes – she probably did for three reasons:
1) No-one wanted to buy the division;
2) HP’s board never really wanted to sell it;
3) HP’s board was feeling naked and exposed at the prospect of rebuilding the firm without it.
The jury’s out over whether Meg will turn around a famous company which is now struggling to save its tarnished brand. It’s an immense challenge and will take several months to see any real progress, but reclaiming part of its very soul – making personal computers – will help it rebuild its identity.
While outsourcing clearly provides a vehicle to help under-pressure business leaders coerce some of the change they need to embrace in today’s uncertain economy, most do not view it as the only lever to pull to achieve their goals. The majority of today’s buyers are still trying to figure out what sourcing levers they have at their disposal, uncertain as to the right approach for their organizations.
Our new study that covered the intentions and observations of 534 buyers, advisors and providers with their sourcing strategies, in the event of a “Double-Dip” Recession, reveals one major shift in the industry: most buyers now recognize what their businesses need to improve to drive productivity, they simply are struggling to figure out how to marshall their internal and external resources to help them get there. And a rocky economy isn’t helping drive definitive behavior, with seven-out-of-ten buyers expecting either little change in focus when it comes to outsourcing, or they simply do not know what they are going to do:
* Unlike the 2008 crash, which drove shock and awe into the boardrooms of every business, shouldn’t 2011’s threat of economic adversity be precipitating a calmer, more organized approach to business planning?
* While experiences of 2008 have provided an expectation that further catastrophe is just around around the corner, shouldn’t buyers be far more assertive with planning new measures to contain costs and find new areas for productivity and growth?
The Bottom-line: Buyers are looking more broadly than simply outsourcing to drive productivity improvements in today’s climate
Indeed, today’s harsh business realities are driving more focus on organizations aligning both their outsourcing and shared services frameworks (click here to download a copy of our Global Business Services paper), however, are companies panicking and screaming: “Help! We must hurl as many of our fixed administrative costs out of the window asap and deploy as much low-cost service delivery as we can, regardless of the consequences”? Of course they aren’t – they’re also looking at measures such as their ability to have more flexible global operations, to standardize processes across geographies and ERP instances and to align their internal stakeholders more effectively. Cost-control is a measure that is always a constant focus, however outsourcing doesn’t always provide that answer, especially with experienced businesses that have already moved out a lot of tangible cost in areas such as transactional accounting and application support. Outsourcing only provides part of the answer.
As we recently discussed, business leaders are beset by multiple business pressures in today’s climate, and outsourcing provides just one lever among many that they can choose to pull. Only 13% of buyers are concerned about the disruption caused by outsourcing, hence if they currently only view outsourcing as a cost-reduction lever, they are going to place it in a pecking order of other cost-reduction measures… and it’s not always going to the most effective short-term measure in a tough economy. It’s the job of advisors and providers to educate and demonstrate to buyers the benefits beyond cost-reduction and help clients embed outsourcing among their internal governance practices to align its benefits with those provided by internal process improvement and shared services.
We’ll reveal all in Part II coming shortly to an HfS website near you…
HfS Research is the Analyst Firm of the Year for Outsourcing, while Phil Fersht scoops Analyst of the Year
For some reason, people keep insisting on giving us accolades for being cranky, irritable and disruptive influences on the services industry.
However, the awards we received today (see link here) are an unbelievable validation of our team’s hard work from the International Institute of Analyst Relations (IIAR) – and proof that we’re not just a “flash in the pan” in the industry analyst business. IIAR’s awards are widely recognized as the foremost accolades in the analyst profession, with such a large number of analyst-facing professionals providing the votes.
Today, HfS Research won the individual award for “Analyst of the Year” for a second year in succession (some individual called Phil Fersht now sporting an ego so insufferable, it’s rumored he can’t even stand his own company).
In addition to the individual analyst award, HfS Research topped the charts for “Outsourcing, BPO and Maintenance Analyst Firm of the Year“.
And this time, HfS Research was a runner-up for the overall “Analyst Firm of the Year”, behind the formidable Gartner. Over 260 analyst and influencer relations specialists took part in this year’s survey – by far the greatest number to date, who voted on all the major research analyst organizations, such as IDC, Forrester, Ovum and so forth. According to some of the participants’ entries, success factors included, “intelligent people with common sense”, “Research that is always compelling to read – and our clients like it” said another. One participant went further saying of HfS, “They are the heartbeat in the world of outsourcing and shared services”. My word – has the world gone mad? We’re just a poky 14-analyst set-up where we still re-use our teabags in the morning and have to share two Men’s Wearhouse suits for client meetings (we got the second one free…).
When we won the prestigious IIAR “Analyst of the Year” award last year, it was great to get some recognition for our hard work, but many people sniggered behind our backs that we would fade away pretty quickly. However, to retain that award this year, and also win the runner-up for “Analyst firm of the Year” is a validation that HfS Research is about to enter its third year in operation, with a strong mandate from industry that people are getting some value from our research, love our accessible model and the fact we can provide real data on industry dynamics practically as the happen.
Anyhow, we would like to offer anyone who voted for us a cocktail on us when you see us at some upcoming conference, which we will be able to pay for out of the 20% price hike we’re gonna add to our services.
Thanks again – we really appreciate all the wonderful support, accolades and banter as we rumble into a third year of operations.
In Part I we gave you a little background into Tiger’s rise to prominence and how he’s going to behave a little differently from Pramod. Now let’s delve into the Genpact-specific opportunities and challenges that Tiger will be tackling in his new role as President and CEO. So, without further ado, here’s Part II…
Phil Fersht (HfS Research): Tiger, there’s been a lot of talk lately about the value that Indian companies can bring to U.S. and European firms. People are saying, “These Indian companies are great at training people, have good talent development and succession planning programs and so forth – they bring a lot to the table.” What’s your view? What do you think that Indian firms can bring to U.S. and European companies, and maybe vice versa?
NV “Tiger” Tyagarajan (Genpact): Firms, including us, Cognizant, Infosys and TCS, have all grown at 20 percent plus for many years now. And one of the things that’s gotten us there is a pretty significant hiring, training and culturalization engine that allows us to have one culture across the company in most cases. But we’ve clearly realized that many of our global clients don’t have one culture. It’s actually very fragmented, and the different countries don’t really work well together.
NV "Tiger" Tyagarajan is the new President and CEO, Genpact (click for bio)
So actually, when people talk about innovation in the industry and wonder where it is, I push back and say that the HR and training practices and models in provider companies is truly innovative. In fact, many of our clients turn to us and ask, “Can we take this practice and that practice of yours, and embed them in our organization? Can you teach us how to do it? Can you give us the same tools, methodologies?”
In Genpact’s case, our singular, enterprise-wide culture is very similar to that of GE. Irrespective of what GE office in the world you walk into – whether it’s Canton, Ohio, New York, India, Shanghai or Tokyo –within five minutes you realize you’re in a GE office. The language used is the same. And while each country of course has its own culture, there’s the overarching, action-oriented, boundary-less, performance-driven culture. And global corporations need a culture that cuts across all nations and to some extent supersedes national culture.
I think one of the other things U.S. and European companies can learn from Indian firms is the concept of jugaad, which is an improvisational style of innovation that’s driven by scarce resources and attention to a customer’s immediate needs. In India, nothing is big enough to dedicate a single person, so people get involved in many things and end up being kind of a mixture of many things with knowledge that cuts across a broad spectrum. And because of the environment in India, people have simply learned to find a way to solve a problem, find an answer, in spite of multiple obstacles.
Phil: One of characteristics that makes Genpact stand apart from many of its competitors, is the passion and motivation that’s to apparent in its staff. How do you keep people passionate? Is there a secret to that, or do you think it’s just something very cultural within an organization?
Tiger: Phil, I’m so glad you asked me that, because it’s my one “keeps me awake at night” thing. I do wonder about how to maintain the company’s culture as we keep growing and spreading your wings.
And we are becoming very global. Our growth rate outside of India is faster than in India by a factor of 50 percent, so very quickly we’ll reach a 50/50 split of staff. So, as that happens, and as I continue to shift my leadership team to the markets, which is another big statement I’ve made and I’m making my shift myself, how do you maintain the culture?
One aspect of the culture that we almost put right on top is passion. So, when we hire leaders – and it does begin at hiring – and when we groom younger people into leadership jobs, the one characteristic that we all look for is passion. And we openly talk about it…it’s part of our evaluation criteria. And the world is changing so rapidly that if someone says, “I know this and I know that”, that’s not as important as their passion, ability and willingness to learn.
And – with a bit of the GE in us – we believe that you must wear your passion on your sleeve, and we spend a lot of time injecting passion into our communications within the organization and with our customers. If you don’t, how are you going to influence your team? How are you going to influence your customer into feeling that you fundamentally believe in what you are saying, and therefore, how are you going to make them buy into a ten-year relationship with you?
Also, we all work hard, we all work crazy hours, we all travel a lot, we all have global time zones. Why do that unless you’re in love with what you do? You have to have passion for the work or you should just stop doing it.
Phil: And what other characteristics do you think have made Genpact successful?
Tiger: Genpact’s and my own personal view of the world is that the most successful organizations are the ones that are most nimble. Nimbleness and agility are one of the big differentiators. And that includes speed: speed to market, speed of action, speed of reaction and so on.
I think organizations need two things to be successful. First, you have to thrive on change. Think about it this way: Genpact is becoming a Titanic in terms of size, but how do you make a Titanic go from one direction to 180 degrees in the opposite direction in literally a nanosecond? If you can create that culture – and it is all about culture – in which you can shift the organization’s focus from one to the other very quickly, I think you have a strong competitive edge.
You also need to have your antennas out with your customers, with the market, to be able to capture signals that tell you something is changing, and then be able to signal it back to your organization so it can change as needed. So that’s what my desire to shift the leadership team ofthe company to the market is driven by. I want to make sure that we have enough antenna-signal-picking, innovation-driven leaders, who then can drive the organization in the right direction.
I also believe that breakthrough innovations, which is what I think the industry is looking for and we are looking for with our clients, happens when you are closer to the client. Continuous innovation happens in your factories and your delivery centers. But breakthrough innovation happens when you co-innovate with your clients. So my biggest drive is to co-innovate with clients.
NV "Tiger" Tyagarajan is the new President and CEO, Genpact (click for bio)
One company has done more than most (some argue any) to change the very face of Business Process Outsourcing over the last few years.
Its origins can be found in a world-class finance and accounting captive that commercialized its operations with an army of enthusiastic process geeks, schooled in the arts of LEAN and Six Sigma… and at competitive prices. “Isn’t that the GE company” asked one CFO of me, when I ran him through a potential list of F&A BPO providers candidates, “Get them in, I want to hear what they have to say”.
Indeed, the rise to prominence of Genpact has been nothing short of remarkable, as the firm has reemerged in 2011 hungrier and more acquisitive than ever. Having survived a tough recession for the BPO industry, successfully fending off larger competitors baying for its blood, Genpact has recently taken a new direction: appointing NV “Tiger” Tyagarajan to take the helm from the irrepressible Pramod Bhasin, who preached process so poetically with us last year.
Anyone close to the business has always talked about the “Pramod-Tiger” double-act for several years, with Tiger initially being the US face of the firm, and Pramod coordinating activities from India. More recently, Tiger returned to his native India, not only to reconnect with his first love, cricket, but also to take on the role of COO and ready himself to succeed Pramod, who had inexhaustibly led this firm, since its 1997 inception, to surpass $1 billion in revenue.
Tiger is now settling back into New York – a short train ride from his son’s university in Georgetown, Washington D.C., where he is now in the process of adding his personal leadership style to the Genpact machine. So the $2 billion questions today are: what will Tiger do differently? How will Genpact fare with its leadership team Stateside? How will Genpact continue to evolve its business to move beyond its mainstay finance and accounting service line?
Well, you needn’t wait any longer, as Tiger recently spent some time bringing us up to speed:
Phil Fersht (HfS Research): Good morning Tiger. Before we delve into the current business issues, let’s talk a little bit about your earlier career and about you as an individual.
NV “Tiger” Tyagarajan (Genpact): I did my undergrad in mechanical engineering at the Indian Institute of Technology in Bombay. And while I loved the problem-solving, logic-driven approach that engineering teaches you – and I use that in many situations today – I realized I didn’t want to spend my time with machines. I want to spend my time with people.
So I did my masters at the Indian Institute of Management in India, and specialized in marketing and finance. And I loved those two years. I thought I had found my sweet spot, being able to use logic and numbers and finance while at the same time, driving change through groups of people to get to a decision or a certain point.
My first job was selling, believe it or not, cosmetics for the Indian subsidiary of U.S.-based Chesebrough-Ponds. By my seventh year with the company – which by then had been acquired by Unilever – I had sales management responsibility for the country’s largest region, which accounted for 40 percent of the company’s sales.
That was great management training, and gave me the chance to learn the ropes in managing sales teams, and in understanding consumer and business behavior. But I was getting a little tired of a single product market environment, so I decided to switch to financial services and joined Citibank’s then new retail mortgage lending business. I held six different jobs in three years at Citi. And without going into all the ugly details, I was quickly termed the “cleanup guy”, the person designated to clean up a problem, and one of the ways I did that was by attracting and building up a team of A players. But my fundamental view was that if you really want to succeed, you’ve got to surround yourself with the A players, and I’ve carried that view forward in my career.
By that time, 1994, GE Capital announced it was going to set up a financial services company in India. I read Jack Welch’s two books and fell in love with GE. I knew it was a place where I could spend my entire career, going from credit cards to aircraft engines to healthcare to NBC, without ever leaving the company. I could also at some point in time actually see myself leveraging my engineering background and feeling good about it. So I joined GE Capital – and was probably the third or fourth employee in India – as risk head of its consumer lending business.
I moved to the U.S. in 2002 as the Global Head of Operations and Six Sigma for GE’s commercial lending businesses. Then I joined Gecis, which is now Genpact, and here I am.
Phil: Tiger, we all know what an amazing job Pramod did to get Genpact to where it is today. Can we expect anything radically different under your leadership?
Tiger: With the dynamics and pace of change in our industry, all providers have to be nimble and able to change rapidly, and Genpact did that under Pramod. There will continue to be dramatic changes, but that’s par for the course for us.
A few specific changes I am focused on are:
Significantly growing our investments in domain-led sales and account management folks who have the knowledge and expertise to bring a high degree of sector-specific thought leadership into conversations with clients in vertical industries including banking, capital markets, CPG, pharma, retail, manufacturing, insurance and healthcare
Shifting the center of gravity of the company’s leadership so that 50 percent are located on the ground in client markets. This of course includes my running Genpact from NY
I think the next 10 years will be about the science of processes and the insights gleaned from data analytics. So we’ll build on our unique, 10+ years of deep analytical capabilities across a broad range of industries to help our clients make increasingly smarter decisions
Phil: And is your leadership style very different, or very similar, to Pramod’s?
Tiger: As we both grew up in GE, there are aspects of our leadership styles that are very similar…bias for speed and action, the passion we openly wear on our sleeves, a deep disdain for bureaucracy, etc. But there are also differences in our styles. I get my energy, ideas and passion from conversations with clients, people in the industry, my team and our broad employee base, so I spend a lot of my time on the road in the markets with them. That is core to my style, probably because of all the time I spent in sales – 22 years! I also believe that this is the best way to drive innovation. And with my years spent as a risk leader, I’m a huge believer in the 80-20 rule…in this case, pick a few things you say “yes” to, and say “no” to a whole lot of things, and then drive the “yeses” hard, and with consistency and investments.
Before we talk about today’s sizzling blog, many of you have probably been wondering where sourcing’s lone change management warrior, Deb Kops, has been hiding. Was her war against change management avoidance becoming too much? What was she doing when she criss-crossed the world between India, Singapore, Germany, Spain, UK, Netherlands, China, Austria, Japan and the Republic of Texas over recent months? Had she contracted an incurable gastric ailment when she was force-fed a deep fried Texan pickle?
Well, I’m glad to inform you all that nothing has changed as she embarked on another why does no one give a stuff about change management tirade to me last week, but she occasionally does find other wars to wage, while she’s waiting for one of her other wars to come full-circle. And this war is one she first alerted us to over a year back, when she bemoaned the dominance of the male species on most service providers’ management teams. So over you, Ms K to give us your inside view on…
Where the boys are
Looking at any outsourcing provider or advisor’s website brings to mind the title of a 1950s song by Connie Francis. Click on “About Us,” then “Management Team,” and a bevy of good looking thirty- and forty-something guys in sharp suits will peer back at you. Occasionally, you’ll see the anomalous face of someone of the female persuasion managing human resources, marketing or the odd business unit. Is this lack of diversity an issue for the global sourcing industry?
Over the past few years, I’ve met growing numbers of women on the client side at levels ranging from program director to vendor to process manager, from executive sponsor to global sourcing leader to business unit head. Empirically, I’d estimate that in meetings with client side management personnel, at least a third of the team had two x chromosomes.
Under the thesis that people prefer to do business with people who are like them, I profiled the management teams and boards of eight major outsourcing providers generally considered the usual suspects—both based onshore and off, some truly global, some, some pure play and some with a technology/consulting heritage. I then took a gander at the websites of three sourcing advisors to see whether many girls have made it into their management big leagues—defined as having a mug shot on the Web.
While I don’t pretend that a look at 11 websites constitutes rigorous research, the results empirically supported my hunch. Granted, no two companies operate under the same definition of management, with the teams on display ranging from 3 to 33 in number, but out of 165 publicly profiled team members, only 17, or less than 10 percent, were women. Some had none, and there was a marked concentration of women in the so-called “traditional” corporate leadership positions—human resources and marketing, with a stray corporate counsel. There were only two lady business line leaders, and only one woman was appointed to a sales leadership role. Perhaps not surprisingly, non-Indian heritage firms had a higher number of womenin leadership, but not overwhelmingly so.
To complete my evaluation of the state of play in the unholy sourcing trinity of client, provider and advisor, I looked at the websites of three noted sourcing advisory firms. Historically, professional services firms have been strong proponents of the power of gender diversity; consultancies, accountancies and legal firms have been focused on this issue for over 20 years. Bu out of 87 named management positions on the Internet, only six were occupied by women.
These data are not meant to paint the sole picture of the industry’s awareness of the need for gender diversity. Many provider organizations are increasingly sensitive to the issue, incorporating strategies to attract, mentor and promote women within their HR policies. Some have appointed diversity officers, while other operate under the dictate that, all qualifications being equal, hire the person in the skirt or the sari. And women are just now starting to show up in the ranks of a few outsourcing providers’ sales forces, which could be termed the first indication of acceptance and enlightenment.
But working under the assumption that it takes at least 15 years to develop an executive, and a concerted effort to retain him or her in order to benefit, will the complexion of the sourcing industry change soon? And is there a burning platform for that change?
The industry is growing…outsourcing is an accepted business model…and other industries don’t have a scarcity of women, so what’s the issue? Let’s look at the demographics. With almost 43 and 34 percent of women in management in the sourcing export countries of the U.S. and the U.K. alone according to Catalyst (the leading nonprofit membership organization working globally to expand opportunities for women and business), if the numbers in the small sample are indicative of trends in the industry, the corresponding numbers in the provider community don’t match up.
If the workforce numbers alone are not persuasive, go to www.catalyst.com and look for award winners or the advisory board composition. The list of companies whose initiatives ranging from discrete programs to corporate efforts to recruit, retain and advance women mirrors that of about every outsourcing provider’s dream client list. Who would not want to provide services to Avon, Procter & Gamble, Pepsico or JPMorganChase?
Deborah Kops is Research Fellow, Sourcing Change Management, HfS Research (click for bio)
The rationale for greater diversity in the sourcing industry is more than numbers; it’s personal. How often has sourcing scope been expanded because the players forged a relationship on an individual basis? That a strong level of trust between parties meant that problems could be solved fairly and efficiently? Men have never underestimated the power of a round of golf; while women may not choose to play 18 holes, they have other ways of bonding with their clients. With increasing growth in the ranks of women buyers, there should be no doubt about the power of being able to connect on both personal and professional levels.
Cutting the industry some slack, lack of diversity in the management ranks of the global sourcing world is due to the sheer age of the indigenous industry. Only now are women entering the workforce in numbers that will ultimately result in a funnel which will raise them into the management ranks. It can take as many as 10 years to develop women managers; in a fast-moving industry, that’s far too much time.
But pipeline of qualified women aside, the sourcing industry should confront some hard truths when thinking about presenting a more diverse face to their clients:
Myth still in the way Remember when few women could be found in professions such as law or accounting? Even as recently as 20 years ago, management believed that women could not be trusted to stick with their careers, that as soon as some guy came around to marry them, the gals would be off to babies and carpools, wasting many years of training and mentorship. There is still a nagging belief that gals won’t travel, are not as loyal, and just cannot be counted on to solve problems in the same way.
Lukewarm, if any, corporate sensitivity With growth and quality of delivery taking on such overwhelming importance, there is seemingly no reward for efforts perceived as extracurricular—such as workplace diversity— by many outsourcing companies. Attracting and retaining staff is of such import that programs are typically agnostic to gender. And in offshore centers, “best places to work” awards may be seen as nice to have but not truly core to the branding necessary to attract staff.
Unfortunately women, particularly those offshore, are not experienced in drawing attention to the issue constructively. Discussions about gender diversity are often couched as complaints because younger women with few role models and limited experience are not yet fully prepared to make the case about gender diversity. So there is no group pushing from within the industry globally.
No burning client platform to make a change Pushing aggressively against the glass ceiling does not diversity yield; experience indicates that business focuses on diversity issues only when it is in their best interest to do so. No one is yet championing the cause of women in the sourcing industry; only when clients demand diversity in their teams will composition change.
Apathy of women leaders Last year, an informal survey of 20 onshore management women in sourcing indicated that, while the majority saw the lack of women in the industry as an issue for the industry, several believed that advancement to the management ranks was entirely a personal career challenge. There is residual sentiment in many professions that says “I was able to get where I am today on my own; why should I help others and what’s in it for me?”
Is the sourcing industry focused on the issue? Informally, yes– provider leaders—men and women alike—privately acknowledge that gender diversity is an important component of growth and client service equations. Clients of the female persuasion bemoan the fact that the ranks of women in their provider leadership ranks are thin, especially when the 10 to 15 man teams proposing are predominantly, if not entirely, male. Leading executive search firms are increasing being asked to source so-called “diversity candidates.” And Nasscom, amongst other groups, is starting to focus on the participation of women as a critical enabling factor for the growth of the industry.
What will speed up the population of more women in the provider side of the outsourcing industry equation?
Enhancing the visibility of women who have “made it” Many young women in our industry are desperately seeking role models of women who have survived and thrived, taking on roles that drive growth and exemplary client service. Several leading providers are implementing in -house mentoring programs, or supporting external organizations such as Women in Leadership India to show the way. Having access to more and more leaders of the same gender will help give younger female professionals the confidence to develop their careers in the industry.
Applying supplier diversity goals to outsourcing contracts As in any industry, unless clients demand change, progress will be slow. When clients demand that women show up in the pitches, or that some of the work go to a women-owned enterprise, or that engagements are staffed with female account managers and supervisors, gender diversity will become a business imperative.
Appointing male sponsors to champion gender diversity Unfortunately, gender diversity is seen as a women’s issue rather than a business issue. When a woman is appointed to lead an initiative, male colleagues see it as a separate issue that does not impact their futures. However, when a respected male colleague takes the helm of a diversity initiative, management is more likely to take notice.
Appointing women to provider boards of directors or advisory boards The gender diversity message will take on more importance if it starts at the board level. That’s not to say that the gentlemen on the board cannot push the issue with management; having female board members governing performance sends a very strong message that performance is without gender, and women belong at the leadership table.
Perhaps in a few years we’ll find the girls where the boys are in the outsourcing industry. And, as a result, it will become even more successful.
Deborah Kops (pictured above) is Research Fellow for HfS Research, and leads her own practice in sourcing change management entitled SourcingChange (www.sourcingchange.com).
Today, we have launched The BPO Resource Center that’s geared to become THE one-stop shop for anyone seeking to learn more about Business Process Outsourcing – without having to pay thousands of dollars for the privilege.
In fact, you won’t have to pay anything. This is intended to be the site where buyers, providers, investors, advisors, analysts, academics and politicians can swing by to peruse content, download reports, get engaged in dialog or even contribute their own research.
The BPO Resource Center is geared to become a genuine industry resource that encompasses best-practices, next-practices, worst-practices, news, industry data, views and research insight. However, what makes this sight really unique is that we’re opening up the content to the best minds in the business to share their learnings, and this includes other research analyst firms and academia. We’ve kick-started the site with a selection of recent BPO-related research reports, blogs and articles from HfS and will soon be populating this with research from our research competitors and academic peers.
And while we would love to be a non-profit charity for the outsourcing business (we’ll do that when we get rich and retire), we do occasionally need a little help from industry, and we’re delighted to announce that Accenture has become the first executive sponsor of the Center. And before you ask, they do not control or influence our content, they are simply great supporters of HfS as an industry voice and want to help support such a great resource to further the learnings of industry. Plus you get a lovely welcome video from the famous Mike Salvino, head of Accenture’s BPO business, when you log-on.
Many of you on the buy or sell side of outsourcing are great clients of ours and we cannot understate enough now much we value your support as we look to expand our knowledge-sharing for the development of the global sourcing business. The BPO Resource Center is the next stage in the development of the HfS platform as the pre-eminent portal for all things sourcing and shared services, and we strongly urge you to pay it a visit and sample several of the complimentary research reports and discussion pieces.
You’ll see some of the best work of the HfS BPO murderers row that include such reprobates as Tony Filippone, Esteban Herrera, Reetika Joshi, Deborah Kops and yours truly. And here’s the best thing: All you need to do is sign up once, and you’ll forever have free access to all the research, which we will frequently refresh. We’ve also assembled a smattering of the best recent blog posts on the BPO business.
I’d personally love your feedback on this site–what you like, how we can improve it, and anything else you can think of. Please feel free to drop me a line at [email protected].
"Go ahead… just one more slide". HfS' Esteban Herrera saves you a fortune with some free advice
My word, if I get one more spam from someone claiming to help outsourcing providers “get outsourcing leads” through delivering dodgy webcasts (which are probably only attended by other equally desperate outsourcing providers, with similarly deficient sales capabilities), or get invited to take part in a workshop to improve the “velocity of my sales pipeline”, where a paltry $10,000 investment can help my firm meet its $1,000,000,000 target, I think I may throw my Mac out the window and join the Occupy Wall Street demonstration rumbling on down the road.
So let’s save you nice outsourcing providers the time, trouble and expense of getting advice on how not to sell yourself, and give you all the advice you need, right here, right now – and for absolutely nothing. Plus, you can re-invest that time you just saved by filling a bag with foam pies and hurling them at unsuspecting investment bankers.
Esteban Herrera, along with most of the team at HfS, has gone way further than “Death by PowerPoint” on so many occasions that we can now prescribe your very own Exhumation after PowerPoint… over you, Mr H:-
An open letter to Outsourcing Providers: It’s time for your exhumation after PowerPoint
Dear Providers,
We love you. Without you there would be no outsourcing industry and we would not have jobs. More than anything, we want to see you succeed. Why, oh why, must you insist in compromising your own success by practicing death by PowerPoint on your prospects?
I’ve come to believe that business, and our business in particular, really wants audiences to tune out. Through thousands of “orals” and analyst “briefings” I’ve concluded we actually want to put each other to sleep. We don’t care if the audience retains anything we’ve said, and thus bombard them with a slide per minute. Of course, almost none of us talk that fast, and almost all of us leave the good stuff until the end so we rush to it when nobody is paying attention and everyone is bleary-eyed and exhausted.
In my view, providers are the worst offenders, especially when attempting to woo new clients in competitive situations. The presentations and styles often do exactly the opposite of what is intended: they frustrate and alienate potential clients. In the last fifteen years, I’ve seen lots of sales pitches, some very good, most not so. In an effort to help our industry and keep my sanity during my next round of orals with a buyer client, I’ve put together a few tips, which I am sure most of you will ignore.
Ditch the PowerPoint. Clients are so used to “slides” that what will stick out in their mind the most is someone who came to have a conversation with them, not talk at them. In a recent set of orals, one provider had three of six speakers not use slides at all. They finished an hour early of their allotted time, to everyone’s delight, and communicated just as much as anyone else. Engagement, discussion, and relationship-building banter ensued. To say they won the day would be the understatement of the year. More importantly, everyone in the room, including this jaded advisor, remembers them and their story. If you know what you are talking about, you don’t need the damn slide. Plus, you know all your competitors are going to attempt PowerPoint murder, so why not stand out in the crowd?
Ditch that innovation funnel slide. You know which one I’m talking about. Everybody has it. Everybody claims it as their own. And nobody believes it. Kill it.
Start with the “answer.” How about this simple message to start the session: We are going to save you $X million per year, starting in June, while maintaining or increasing all your existing service levels, while absorbing x% of the risk. If your FIRST statement/page/slide doesn’t follow that pattern, you’ve squandered your best opportunity to differentiate and create a lasting impression. Whomever taught this “build-up” to the punch line method of presenting should be sued for malpractice.
Ditch the sales person. Don’t get me wrong, salespeople play a critical role in any pursuit, but they should be seen and not heard. Clients want to speak with subject matter experts and content people. At an intensely competitive pursuit I led last year at a global manufacturer, the sales guy never spoke during presentations, and wasn’t even in the room for the last round (he was outside the door). But I knew he was quarterbacking the effort every step of the way. His team won. I’m sure he didn’t mind being out of the room when his commission check for a $125 million TCV deal came through.
Slides are aids, not crutches. If you must use slides, you should be able to speak at least five minutes per slide. They should help tell the story, not remind you what the story is.
Bring a Customer. That’s right, there is no more powerful marketing than what an existing, happy client can say about you. Persuade one of your happy clients to come and speak on your behalf. Nobody else is going to do it. Fly them first class and put them up for the weekend at a great resort nearby. The good will in the existing relationship alone is worth it. But how impressive will it be to the prospects? Priceless! And existing clients, before you dismiss this thought, think about the favor you will be able to cash in when you need it! This is a win-win and I don’t know why more buyer/providers don’t do it. Sit your customer down in the middle of the room and let the prospect ask questions. Let the customer answer honestly. Your prospect will remember it forever, and probably hire you on that alone.
Engage. These meetings are opportunities to converse. The more one-way the communication, the less likely you are to be successful
Personality counts. One of the most successful providers we see in the market has the uncanny ability to match their delivery/account manager to their prospective client very well. Their delivery capability is no better or worse than anyone else in the market, but prospects tend to fall in love with the lead, and more often than not, buy because of that individual.
I have lots more tips, but eight is a good number to start with. I did not want to be critical without offering some suggestions! I genuinely hope you find these helpful. I’m no presentation coach, but I’m happy to recommend a great one (thanks, Ron D.). Remember, we love you, and we want you to win. And if you don’t curb these bad presentation habits you are going to start losing.
ADP, the HR and payroll services giant, is a staple analogy in the BPO business. It has such a dominant command of the payroll market, there’s no room for new entrants (many have tried and limped away); it commands the archetypal “one-to-many” delivery model with regional service hubs in all major geographic regions; it servers for small, mid-sized and large organizations with a sales and delivery infrastructure that can cater for all types of clients; it also has a rightful claim to be the first true “Business-Process-as-a-Service” offering – years ahead of its time – but doesn’t get a lot of plaudits, because there isn’t a lot of sexiness about payroll.
However, don’t tell HfS’ Keith Strodtman that payroll isn’t sexy… he lives and breathes the stuff, however, today he’s going to talk about how ADP is moving “beyond payroll” with its forays into broader talent management and HR technology segments- and – most notably – it’s move into the Recruitment Process Outsourcing (RPO) market with the acquisition of the popular “The RightThing”. Over to you Keith…
ADP has added another tool to its HR BPO toolbox with the acquisition of RPO provider The RightThing. The acquisition of the twenty-year old privately held firm is ADP’s first foray into the RPO market. Terms of the deal were not disclosed but it is clear that ADP is sticking to its “beyond payroll” message to support its growth strategy. Its “beyond payroll” business are already growing about three-times faster than its traditional payroll business, with acquired businesses playing a big role in that growth.
ADP, the world’s largest payroll processor, has used its substantial war chest to completed several acquisitions in the last few years. Examples include: Workscape – a provider of benefits and talent management solutions, AdvancedMD – a medical practice management solution provider, and OneClickHR – a HR technology provider based in the UK. The company has long participated in portions of the recruiting services market with its pre-employment services business that includes background screening (acquired about ten years ago) and talent acquisition software solutions acquired when it bought Virtual Edge in 2006. The additional of The RightThing acquisition takes the company to new levels in the talent acquisition market. Moreover, ADP’s global salesforce has the on-the-ground scale and client-side connections to push RPO services onto its massive client base. ADP can apply its sales and client infrastructure to scale the RightThing business to the next level and compete with the likes of Manpower, Adecco etc.
The RPO market appears to be well-positioned to capitalize on the talent gap megatrend that is emerging globally. Despite high unemployment rates in many of the world’s developed economies, many CEOs have reported that their companies job openings but can’t fill them because they can’t find workers with the proper skills. According to the US Bureau of Labor Statistics, there are 3.2 million unfilled positions in the United States. Companies are looking for solutions, like RPO, that can help them find workers with difficult to find skills.
The RightThing addition also strengths ADP’s multi-process BPO offering. While broad scope multi-process HR BPO deals are not as common as they once were, having an RPO offering gives ADP one more opportunity to get a “foot-in-the-door” to establish a BPO relationship. It also elevates the conversation with customer HR executives, something that will support sales of the recently announce talent management solution that is part of ADP’s new Vantage HR solution.
The RightThing is considered among the leaders in the RPO provider market, which counts more than 20 significant providers. The RightThing’s current customers may not see a lot of near-term upside in this deal, other than the obvious financial stability of ADP – one of only four corporations with a AAA credit rating. But there is probably not a lot of downside either. ADP has traditionally done a pretty good job of retaining customers of acquired companies so there is probably limited risk of The RightThing customers feeling disenfranchised.
If ADP can execute, it could become a huge player in the RPO space, at least in the US market. Global RPO growth may require more acquisitions, as The RightThing is North America-centric. But there is one variable that we think ADP will need to address to truly realize the benefits of this purchase: encouraging its clients to standardize its recruiting process and technology – something at which ADP has proven adept , with its GlobalView and BPO offerings. Their Virtual Edge recruiting product is well established, which they should be able to leverage the platform for broader RPO clients, however, ADP may well look at picking up a recruiting marketing platform (such as Jobs2Web) or other niche solutions such as the HireVue video interviewing product.
However, RPO, and recruiting in general, has not yet been fully embraced by buyers, with a quagmire of technology platforms, fragmented processes and the onset of social media to complicate the issues. Recruiting process and platform standardization will be required if ADP is to be successful at scaling the RPO business to be a mass-market utility solution – but we also view this as a major opportunity for ADP to attack this market. If they figure out how to scale the business, they will have a huge customer base at which to sell these newly acquired services. Regardless of the scale, however, there is little doubt that ADP has strengthened its already market leading BPO business and continues to bolster it “beyond payroll” services.
It’s been quite the year for Wipro, as Chairman Premji has sought to refocus his organization and try to keep pace with the (seemingly) relentless growth of both TCS and Cognizant.
As we have discussed, Wipro is a company which has some tough decisions to make to find the right avenues for future growth and investment. The old days of being “all things to all people” is not a strategy that is going to work – and Premji knows it.
Curiously, Premji decided to look internally for his new Chief Executive, when many observers felt it time to recruit some fresh blood from outside. Step up TK Kurien, a deep-thinking type and someone who I have known well during his leadership role in establishing Wipro’s BPO business between 2004 and 2008. TK’s also had great experience in healthcare and life sciences, boasting a former career with General Electric before his Wipro days, also being instrumental helping Wipro develop its footprint in the sector.
So where are TK’s thoughts, as he consider’s Wipro’s options in today’s market? We grabbed a few minutes with him recently to share them with you all.
HfS Research:TK, firstly, congratulations on your promotion to CEO, Wipro. You have now been at the helm for 9 months and we have seen many changes. I’m sure all our clients would be eager to understand your vision for Wipro. How do you respond to those who claim Wipro’s best days are behind them? What is top priority for you over the short term?
TK Kurien: Thanks. Over the past nine months, Wipro has undergone significant transformation with the intent to become more agile, innovative and to provide better value to our customers. Our blueprint of change is in line with the new business reality, where speed, agility and information are not seen as threats but as opportunities. The design principle of our approach is to win the hearts and minds of our customers and our employees.
Technology is a key driver for improved business performance. Our focus hence is in delivering business value through a unique blend of solutions that complement each other at the intersection of Analytics, Mobility and Cloud with a clear aim to provide business benefit. Our view of the world and our solution investments will fall under four broad themes:
1) Innovation in the constrained world: The world of tomorrow is going to be built around constraints – resources, raw material, capital, talent, energy among others. Application of effective technology will profoundly reshape strategy and business models across a wide range of industries.
2) Variabilization of IT to enhance business agility: Maximize business’s ability to innovate by providing an agile and flexible IT. Apply innovative management models including lean, Flex and shared services. Also, Virtualization, Cloud and Collaboration technologies directly lend to variabilize the asset footprint.
3) Consumerization of Technology: Forward looking companies will realize the immense innovation opportunities by integrating consumer technology in enterprise systems.
4) Analytics driven performance improvement: Actionable insights generated through advanced capability will be a key differentiator for continuous competitive advantage.
We are strategically looking at higher value and higher outcome based business.
I believe Wipro is best placed to capitalize on this opportunity due to our technology competency combined with increasing levels of vertical and horizontal domain and business consulting expertise.
HfS Research:We’ve talked a lot about the changing economy and the fundamental changes to clients’ global business models over the recession years. Now with the grim prospect of a Double Dip, how do you plan to have Wipro top-of-mind for business leaders as we venture into this new business climate?
Like everything else, the way I see it is that in every adversity there is an opportunity and really for us this is an opportunity to go back to our customers and build bonds which are far-far stronger and demonstrate how we can help our clients get through these tough times.
In spite of the uncertainties in the business environment, growth opportunities still exist for businesses that can take advantage of disposable income and demographic dividend in certain economies. While core IT spends are under threat, overall technology spends are still rising. Budgets are often getting reallocated/ investigated on a quarterly basis based on demonstration of business value. And to that extent I think the core theme that all of us have learnt coming out of the last recession is flexibility; and we have built that into our systems.
We’ve put together a consulting layer with a vision to wholly integrate with the rest of the business provide a ‘One Wipro’ experience and engage with the customer in a proactive and effective partnership to help them grow the pie and make it meatier. Our conversation with our clients is no longer how we can help them reduce the IT cost, but it is around how we can help them reduce the cost of their transaction. This change opens up so many additional opportunities for us to bring technology into play and improve speed, cost point and client satisfaction. We do not view BPO, IT and Infrastructure as separate and discreet offerings.
HfS Research:It’s great to have a “BPO guy” take the helm! And it’s been encouraging to see the strides Wipro has taken over the last 3-4 years to get a good foothold in the space (see link). How do you plan to take BPO forward for the company – will you be altering the approach and trying some different strategies?
TK Kurien: Wipro BPO is rapidly evolving from executing end-to -end business processes like Order to Cash/Procure to pay to managing end-to -end business functions where Wipro manages both the business process and the underlying systems and platforms. We see IT as an integrated part of our BPO offerings. For me it is Business Process Optimization and not necessarily just Outsourcing. This has led to a quantum leap in process efficiencies; as well as the learning from process execution being ploughed back into IT system improvement. This IT-BPO virtuous cycle is driving huge gains for clients where Wipro manages both IT and BPO and we expect this trend to pick up momentum. The business processes & platforms for Insurance are different from business processes & system for Banking and it is equally important to be knowledgeable of the horizontal processes and the industry. Our added focus on Industry verticals adds a vertical edge to the IT-BPO cycle.
Customers today expect a committed business outcome, visibility, insights and control of their global operations, anytime, anywhere; and vendors that can provide that on demand. What this means is aligning our BPO, IT, infrastructure and consulting assets to provide vertical specific, platform based BPO solutions that can deliver a business outcome. Our BPO assets include a global workforce with 21 locations outside India with expertise in local regulations and language capability, our enterprise process integrator toolkit – Base))); our analytics engine – BASE))) Insights and industry specific end-to -end process management expertise. Couple this with our IT core competence, process optimization capabilities of consulting and our powerful analytics engine and you have what it takes to guarantee an outcome.
I feel that in the world of constraints where there will be focus on doing ‘more from less’ our integrated view of looking at business process will be a differentiator.
HfS Research:Competitors are making major investments in Cloud enabled Business Platforms? Can you outline your strategy and vision for Business Platforms? What are you bringing to market and where will you be competitive?
TK Kurien: Cloud is a huge opportunity for Wipro. Let me share with you some data from a CIO opinion survey across our client base that Wipro consulting team ran earlier this year. The highlight of the study is that while uncertainty prevails on how the supply-side will evolve in coming years, most CIOs expect to significantly increase spend on Cloud (30-50% of total IT spend) once benefits are solidly visible around reduced IT operating costs and enabling focus on ‘core’ activities that add real business value.
We’re advising CIOs to adopt a ‘sense and respond’ approach – creating a cloud incubator as well as changing the IT operating model. Cloud computing offers an opportunity to look at holistic picture of the business process and makes it imperative for IT to have business-natured discussions like
How can an organization achieve faster time to market?
How can an organization match resource requirement to availability for global operations?
Can we migrate to variable cost structure?
Can we leverage economies-of-scale?
Can we access capacity-on-demand?
Wipro understands the transformative potential of cloud computing and that traditional ‘tower’ models will not help push the envelope further on cost savings or time-to-market etc. Wipro also understands that a true cloud, for example, changes the behavior of the organization by recapturing shadow IT, eliminating over-engineering, and removing the IT shop as a roadblock to business value realization.
We have an integrated Cloud Services group which cuts across all verticals and service lines. This has been done to ensure that discussions with clients around cloud computing are elevated to more business-led discussions. This group is responsible for all strategy related discussions on cloud with the clients and ensures that the client has a fairly well rounded picture of ‘To-Be’ state. We are helping many of our clients through cloud advisory, readiness analysis, and implementation and refactoring of applications.
Alongside, Wipro has also developed a portfolio of industry specific business process solutions to be delivered as cloud services from public cloud platforms and our own data centers. As an example of a business platform on cloud, we offer spend analytics on cloud (BPaaS). For a client, we were able to bring $ 30 million savings in data classification and analytics through this integrated infrastructure, application and BPO solution provided on the cloud.
HfS Research:And what – in a year’s time – would you would like business leaders to think of when they hear the word “Wipro”?
TK Kurien: Business leaders should be able to say the following about Wipro in future (and many of our best customers already believe in this) – Trusted partner and an industry thought leader who delivers winning business outcomes for me.
HfS Research: Thanks for taking the time to talk to our readers, TK. We look forward to hearing more from you soon and seeing your plans develop.
TK Kurien (pictured above) is CEO of IT Business and Executive Director, Wipro Limited. TK is also a member of the Wipro Corporate Executive Council. You can view his full bio here.
