HfS Research and the London School of Economics have surveyed 1053 organizations on the future of Cloud Business Services
This week, we’re beginning to unravel the colossus study we just ran with the London School of Economics delving into the future potential of Cloud Business Services.
We managed to receive 1053 participants across business buyers, IT buyers, advisors, providers and industry influencers – if anyone else in the industry has performed such as exhaustive study of Cloud business services, please enlighten us! Thank you to all our loyal readers who completed the study, and our friends at SSON who helped engage their network. A complimentary report of the study findings will be winging its way to you all very soon.
One of the unique angles of our study has been to contrast the views and intentions of the non-IT business community, and solely IT executives. And – as we suspected – the dynamics driving the future direction of Cloud adoption within the business functions is going to come from the business function leaders who “get it”.
Cloud Business Services are no longer hype – both business and IT executives are buying-into the value Cloud can bring to their jobs and their organizations. Let’s examine further:
*The ability to access business applications quicker, faster, cheaper and in a virtual business environment are the major drivers – and it’s the business side of the house which is even more engaged by the potential value than the IT-side.
*Most notably, half the business respondents seriously value the focus Cloud brings to transforming their business, as opposed to their IT. Barely a third of IT respondents were as enthralled by this.
Does this mean that the real impetus behind future adoption of Cloud Business Services is going to come from business function leaders with heavy influence over IT spending for their function? And what role will Cloud Business Services play in altering the make-up of today’s outsourcing and integrated services engagements?
Stay tuned for Part 2, and Part 3… and probably Parts 4 and 5 as well…
I was sitting through a conference the other day and I realized I’ve been listening the same old “how to do outsourcing” presentations for years. Each presenter just kept reeling off the same old dull-as-dishwater drivel about “labor arbitrage”, “transformation” and “how to eliminate risk”. TELL US SOMETHING WE DON’T KNOW! JEEZ – THIS IS THE SAME FLUFF WE WERE BEING SERVED UP TEN YEARS AGO.
Seriously, if our industry doesn’t pull its head out of the sand and start talking about how businesses can innovate, how they can leverage a globally-sourced environment to be more successful, how new developments in Cloud computing can turn global business models on their heads, we will kill ourselves with freaking BOREDOM.
Maybe I should read the old man’s patter instead… am sure it’s far more inspiring.
Euan Davis, Managing Director, European Practice, HfS Research
Euan Davis, Managing Director of our European Research Practice, joined us a month ago, and is already having a big impact over in the land of bowler hats and snaggle-teeth.
What’s more, you’ll have a chance to see him in action up close on November 18, when he’s on a panel at the IIAR London Forum in Central London from 3:45 – 6:30 pm. The session is imaginatively dubbed the “Cloud,” and Euan will be giving the HfS Research view of the Cloud, based on brand-spanking new data our joint study with the London School of Economics, which covered the views and intentions of 1043 companies.
Euan will be chomping at the bit with insights on sourcing via the Cloud, its role in services integration, “Cloudifying” contracts, and – most importantly – the impact of Cloud business services on the Future of Work.
If you’d like to attend, head on over to the IIAR site.
I actually managed to watch “Up in the Air” the other day, and never truly realized how your can forge such a happy little existence for yourself on the road, away from all the stresses and strains of real life.
You can even relocate to a little apartment in Omaha and save on all those living expenses. Not to mention having a 757 named after you. You just need to pray that video conferencing technology doesn’t get too much better in the near term…
Anyways, we digress…when last we left Infosys BPO COO, Ritesh Idnani, in Part II, he was expounding on the shifting BPO landscape, with the increased need for providers to develop their expertise in vertical industries. In our final part, Ritesh elaborates on communication and interaction, and how our industry can rapidly improve collaboration through social media.
Phil Fersht: You mentioned social media impacting things quite considerably. How do you see that impacting our industry – and how is Infosys leveraging it? Do you also see social media presence and expertise becoming increasingly important when servicing your clients?
Ritesh Idnani: There is no denying the fact that the relevance of new media is making a growing imprint on the way we do business. Infosys has a specific unit called “Setlabs,” an organization that really focuses on the emerging technologies. One of the things it has been looking at closely is the impact of social media from a people and business standpoint and, secondly, addressing the question of how do you actually make money out of deploying the relevant social media strategy for your organization. Then we have launched a platform called iEngage in the marketplace that combines social media, e-commerce, supply chain management and collaboration. I think what we are taking to the market today and their industry sectors is to say, “If you got people coming through different channels, communicating with each other through different ways, is there an opportunity to monetize some of that? Is there a way to channel the products and service offering through the social media channels? Is there a different set of individuals you need to actually target those who are frequenting the social media outlet itself? Do they need to come from a certain demographic? Do they need to have certain skill sets and competencies, which are very different from what you might have experienced? And last but not the least, do we need to deliver products in a very different manner than what we have been used to?” Businesses such as retailers, direct to consumer manufacturers and even banks can cut costs, increase sales and improve customer services through social media. But at the same time they understand the importance of controlling the use of social media to ensure they make the most of it
There is a different order of opportunity and dynamics presenting itself today, that is very different than what all of us might have experienced. I think these are the contextual issues that need to be articulated for every individual client and their environment to see what is relevant. These are what we are building into a lot of our offerings on the social media side. What we have also done, from an internal context is that we encourage the use of social media in a manner that is pertinent and relevant. Today not only our leaders contribute to blogs, , but we also encourage domain experts and functional leaders who have a point of view on the industry to go out there and express their point of views. A lot of Infosys opinions and views are today available on the World Wide Web. You may find some very interesting examples not only on our own site but also on industry sites where opinion leaders congregate. I think the second piece of it is where a lot of us at the unit leadership level end up doing chat sessions with people in the organization because we thought that it was important to address a lot of the queries that might come up and a lot of the Gen Y population is very conversant and comfortable with chat and other such media as a way of communication.
We are also using mechanisms whereby we are asking questions and then soliciting responses to those specific questions and using that as a way to see if we get some ideas that by which we can drive business. We use social media on the floors, on the BPO side, to solicit the best ideas that are there that might come from a process associate. Our belief is that some of the best ideas come from the associates on the floor and it’s important to channel that in the right way and social media is one way to do that. So that is a very practical use of how we are trying to generate opportunities that benefit our clients and their business as well. These give you a sense of what we are trying to do both from an internal and external perspective and for clients and for our employees.
Phil: It’s been a personal observation of mine that Infosys is a very open company with its clients and the way that it interacts with the industry. Its refreshing seeing how you engage so openly with everybody at your client events – it really encourages people to talk about their issues, and how to get better at global sourcing. Can you see Infosys at some point leveraging social media channels to have some of your clients interact across client lines? Is that something you can see happening in the near future?
Ritesh: Oh, absolutely. One of the things that we ended up doing is actually launching a BPO community–Colloquium Online. The idea behind that is to actually get clients to leverage social media to interact with each other and enhance peer – sharing of business and industry best practices in an unfiltered and un-doctored environment. I think there are about 45 client organizations who have signed up to that, who are already leveraging the community to interact and see to each other on various topics of issues. We initiate a few of these topic issues but thereafter, it is really the personal interactions that these clients are having with each other and we have just facilitated the same. We do believe that open dialogue is the best way for us to further sharing. The knowledge sharing and resultant industry insights have opened great opportunities to understand businesses up close.
It is also a way to actually ensure that innovations that might be there in one particular sector, is something that can be taken to other industries in a manner that’s most relevant. So we are actually all for it because it allows everyone in the industry to benefit. So the good, the bad and the ugly is actually good. It’s good for our clients and prospects alike.
Another thing that we are doing is we are trying to form industry specific councils. The newspaper sector is a good example of that. We are getting all the newspapers together to share practices around what they are seeing in their sector. The newspaper sector, particularly in the US, doesn’t compete with each other in their markets and therefore they are more than happy to share information as it pertains to their company. You end up having a very open, honest and frank dialogue on what works and what doesn’t work because everyone is grappling on the issues and not just on the cost side. They are also asking, “How do I actually ensure that my business model is going to survive long term?” So those are the second kind of forums that we are trying to put in place for people that meet at regular intervals. We essentially just provide an outlet and thought leadership on a few ideas. Thereafter, it’s really up to them to share what practices are there. Infosys is also going to co-create assets that are relevant for a particular industry sector. So that’s a third kind of intervention that’s out there in the market place that we are trying to do.
Phil: When we look at where things are moving today, and the speed with which things have changed in the industry, what advice would you give to some of the younger practitioners who are involved in sourcing whether on the buy side or sell side? How should they look to develop their careers in our business today?
Ritesh: One of the key messages that I end up telling a lot of folks, whether it’s on the buy or the sell side, is, “Don’t necessarily go for more.” It’s not necessarily about how many people report to you, how much revenue you control, or what kind of business impact you are able to drive especially in the formative years in one’s career. It is really a question of what kind of skill sets you are able to get. Often times, those come not necessarily through what I call vertical growth, which is really more of the same, but it comes through horizontal movements which is moving laterally and picking up a lot of skill sets over a period in time. I think the second thing I would say is it does help to have actually people pick one vertical or one functional area from an expertise standpoint because I think that is always useful to go back on and that is something that people should think about. I think that the third piece of it is everyone needs to always be in a situation where they can’t just end up being aggregators of information but keep looking for learning opportunities. No matter how high you go up in the organization, you cannot get away from that. So I think that’s something that I would encourage people constantly in their careers to keep learning along the way, forget the fact that they have reached to a certain level. They need to not get away from the detail yet focus on what’s strategic. And last but not the least, I have been very fortunate to have had a number of good mentors throughout my career and a balance between my professional life and family life that has worked for me. They have taught me how to develop strong teams, how to stay laser-focused on managing and growing a business, given me a global perspective, and made sure that I stay focused and disciplined on the objectives of whatever business I have run. Also, these folks have been an invaluable sounding board for my ideas, which is critical in thinking through complex business issues. Having mentors or a team with whom you can discuss ideas and who you know will provide unemotional input is key. You do not always need to follow the advice but it is a big mistake if you do not ask for help.
Phil: So finally, Ritesh, I hear from several of your colleagues that you are the most traveled executive in Infosys.. So would you encourage everyone else to do that?
Ritesh Idnani is Chief Operating Officer for Infosys BPO
Ritesh: I think for me it is extremely critical on two fronts, being in front of both my customers and the employees. I think being in front of customers at various points in time is extremely critical to get a pulse of the market and to know where our clients are headed. I think that’s the reason why I like to do this travel at times but I like to travel and meet customers at different stages of the life cycle if you will.
I think that traveling to see employees is critical purely because it is important from their standpoint because they might be in locations that are at far flung spots globally. They need to know what other kinds of opportunities are there, what are the different kinds of things that are happening in the company, what should they be looking forward to, and also some of the key measures that you want them to focus on as well. I think that’s useful and extremely important.
I think it helps the cause of the organization and certainly helps to build many more touch points with both customers and employees. The key message is it is important to be in front of your customers and employees and whether travel is an essential part of that or not is a secondary question.
Phil: Ritesh, on behalf of HfS and our readers, I would like to thank you for your time and look forward very much to hearing more from with you folks again very soon.
Ritesh Idnani (pictured) is COO for Infosys BPO. During his time with the firm, the BPO business for Infosys has scaled ten-fold from a $40m business in 2005 to a $400m+ business in 2010 (the forecast is for Infosys to report revenues anywhere between $405m-$420m by end of current fiscal). He has led two of Infosys’s largest acquisitions in the last 4 years, McCamish Systems, a leading provider of life, annuity and retirement services products in 2009, and the shared service centers of Philips in 2007.
Prior to Infosys, Ritesh held exec roles with PwC and Citigroup. He lives in Basking Ridge NJ with his wife and twin boys.
Euan Davis, Managing Director, European Practice, HfS Research
Many of you sent us mail today regarding the new HfS RAPIDInsight on CSC’s new services integration strategy (see earlier post). Our European research lead, Euan Davis, was at the unveiling of the new strategy in Prague a few days’ ago, and outlines his thoughts further...
I liked what I heard at CSC’s European analyst event. The provider outlined two strategies dealing with the short and long term realities of how you, the customer, buys IT and business services:
1. CSC’s cloud strategy is a short-term play, and I liked it because it recognizes the realities that many customers running down their existing contracts face today –i.e. to radically lower the cost of service delivery and create more flexible sourcing strategies. CSC offers a clear adoption path with lots of tools and support for its customers so they can begin shifting manageable chunks of their existing contracts to the great data centre in the sky. Nice.
2. The more intriguing long term play is CSC’s positioning to be your “Service Integrator.” As a service integrator, CSC would marshal an eco-system of IT/BPO providers on your behalf, setting predefined delivery roles, mutual commitments, swim lanes and incentives for all your providers. CSC sets the model up so each provider shares, collaborates and innovates together and then ensures everyone pulls in the same direction. Nice. Sounds great in theory, right? However, running this model is hugely complicated and it hardly pays out for a player the size of CSC. The revenues accrued for setting up and driving the model for example, can never match what one of CSCs smaller, profitable service lines delivers today, so it begs the question, why? Because they want control and being a service integrator offers them a leg-up as a partner. Moreover, if CSC doesn’t step to the service integrator role, one of its competitors will, and it will get boxed-in as a second tier provider lower down the client food-chain and wind up scrapping for lower-value business with other second tier – and often cheaper – competitors. The real question to ask, is will customers buy into it?
Many will see risks in handing CSC such a vital part of their governance function. Business processes underpinned by IT, need service orchestration to work, no doubt, but would you hand this over to CSC? Some can – and will – always want to do this piece themselves (read our earlier piece on different approaches to service cultures). Others think they have the skills and capabilities needed to quantify risk through an extended services supply chain, and can manage all the moving parts but with cloud it’s only going to get harder and harder.
I do feel the wind is blowing in CSC’s direction however. My conversations with clients point towards more systematic sourcing models built around multiple providers emerging, a phenomenon that all things cloud will drive. Who, or what, does the service integration—in-house or outsourced—is the interesting question. Outsourcing service integration needs some guarantees (or policing) so customers know that the integrator isn’t going to feed its own business but mark my words with ever more sophisticated deal making and governance controls emerging on the buy-side and ever more risky services from the cloud we’re going to see some very interesting set ups emerge over the next few years.
Love to hear your views – either here, or you can email me at euan dot davis at hfsresearch.com
CSC recognizes the need to move away from "old world" thinking… but can it change with the times?
CSC has struck out in a new direction sketching out a long-term position as a “service integrator” and laying out a cloud strategy that goes beyond the usual hype.
CSC needed to realign and refocus as the large outsourcing opportunities declined and its customers transform and trigger demand for new, agile services. It’s a step change for the company— and the right one—as it looks to ditch the baggage from its large outsourcing business and emerge as a trusted partner for its clients. It understands that customers are sourcing cheaper and faster in a fragmenting market and that they want to consume services, while minimizing risk. The real test is whether CSC can channel its pricing and engagement models, its service management frameworks and—critically—its sales team in the same direction as the new IT services ecosystem emerges.
CSC has struck out in a new direction sketching out a long-term position as a “service integrator” and laying out a cloud strategy that goes beyond the usual hype.CSC needed to realign and refocus as the large outsourcing opportunities declined and its customers transform and trigger demand for new, agile services. It’s a step change for the company— and the right one—as it looks to ditch the baggage from its large outsourcing business and emerge as a trusted partner for its clients. It understands that customers are sourcing cheaper and faster in a fragmenting market and that they want to consume services, while minimizing risk. The real test is whether CSC can channel its pricing and engagement models, its service management frameworks and—critically—its sales team in the same direction as the new IT services ecosystem emerges. The vision is right but the implementation is critical…
Download our latest HfS RAPIDInsight to read our full analysis of CSC’s challenges and opportunities ahead.
We all make curious decisions in life, like when you accepted your mum’s Facebook invitation… or when Bill O’Reilly decided to be born.
However, these pale in comparison when one of Europe’s finest services analysts traded the corporate upper-echelons of Forrester Research to help kick-start a quirky little feisty research upstart, that was launched out of a blog – with a name no-one the left side of the Atlantic understands. But it happened: Euan Davis really did join HfS Research!
Euan spends so much of his life writing analytical stuff, that he’s never been so nervous as when he’s had to (gasp) put analyst protocol aside and actually write a blog post for the bagel-and-coffee delights of the interested sourcing onlooker. So over to you Mr Davis, to tell us…
Why I decided to Run with the Horses
At the start of April every year my fellow Brits gather in their homes (and the lucky ones, in the pubs) to enjoy one of the greatest spectacles in the horse racing calendar: The Grand National.
Horse racing may well be the sport of Kings, but compared with the Kentucky and Indian Derbies or the Melbourne Cup, the Grand National is the most royally gruelling race, with 30 fences set over a distance of four and a half miles.
Days gone by saw horses and their riders suffer terribly on the National’s staggeringly high jumps. I remember watching in 2001 as only 4 horses finished out of a 40 strong field as the bad weather coupled with the course’s treacherous jumps took their toll—that year a 33/1 outsider won and by luck I liked the name so I backed it. Last year, the bookies favourite won but plenty of times I’ve seen upstarts enter the race and collect the trophy after a spell-bounding 10 minutes later….
In my eyes I see HfS as the young upstart in the research business with its analysts (horses) full of vim and vigour and chomping at the bit to challenge with leading content, robust analysis and long reach into the crowds that come to watch us. But enough of the horse analogies—I have made (and heard) enough already—let’s just say I am delighted to beat HfS.
Readers of my blogs here will find collective thinking into how the evolving services landscape will shape demand and how service providers will respond. I intend to connect tech savvy business leaders, enterprise architects and sourcing executives together with the wider universe of IT/BPO providers to explore the key issues impacting the demand and supply of IT services. HfS provides a platform to share ideas, in addition to broadening the debate.
My research here will focus on three themes that we feel really matter for buyers and sellers of IT/BPO services—
1) Making multisourcing and service integration work. Those of you that have read my research will know how fascinating I find multisourcing and the governance needed to enable it. We are moving to a multi-provider eco-system and customers want their providers to share, collaborate and cooperate together rather than upselling and competing with one another.
My thinking is that some of the larger IT/BPO services firms will morph into collaboration hubs for their clients. They will become “service integrators” and drive the collaboration and cooperation between providers that effective multisourcing needs to drive value. And, as Cloud grows in its maturity—and it will—the role of the service integrator will become really important in minimizing risk, and guaranteeing operability and performance.
2) Sourcing through the Cloud. What analyst worth their salt is going to ignore the biggest game changer in the IT/BPO services industry?! Through all of the jumbled thinking customers get it. New and fresh buyers are emerging from business rather than IT that are keen to experiment. I reckon we’ll see a new generation of business leaders navigating through all the security, risk and compliance issues to create new revenue models based around agile processes that hang around the cloud. As a jaded ex-ASP analyst (remember that?), I was dubious when I first saw the vendors all jump at once, but you know what changed my mind? The iphone….Voucher Cloud changes how and where my family spends its money and the possibilities are endless for other location based services. So many companies are asking questions concerning how they can “Cloudify” their contracts that it’s right that I focus here. We’ve just finished a cloud survey with the London School of Economics to over 1000 IT and business professionals and the results are startling…I will be running excerpts of this study over the next few weeks.
3) IT and BPO services. As a “BITs” analyst (BPO and IT services) of many years I will be continuing coverage of the European IT and BPO landscape. Expect to see HfS cover the main markets for readers that want a global view. Infrastructure and application services, business process outsourcing, and transformation services fall under my European coverage. I will support customers with their service provider evaluations to figure out which the right global delivery acumen for their needs. I will be developing new tools for HfS customers that will allow you to select the right provider for an engagement in an open and easy way.
Euan Davis, Managing Director, European Practice, HfS Research
HfS gives me the opportunity to connect with so many IT and business professionals be they enterprise architects, sourcing practitioners, CIOS on the buying side but also with the IT/BPO providers and I would invite you to contribute your thoughts as you see fit. Expect to see my new research highlighted here, interesting articles that I find and insightful Q&A with those that are grappling with these mega trends and whose experience can deepen our collective understanding. I am very excited to be joining HfS and working with you all.
Cheers!
Euan
Euan Davis (Pictured) can be reached at euan dot davis at HfSResearch.com. He can also be found on twitter: @euandavis. You can read his bio here.
Mike Salvino, Group Chief Executive for Business Process Outsourcing, Accenture
Many of you were wondering what happened to Sal since we kicked off our discussion last month. Well, he’s been on a shopping trip for Ariba’s services organization, in between his tour of the North Carolina junior basketball circuit.
Anyhow, we caught a time-out from Accenture’s BPO overlord to get a glimpse of his vision for the future of the BPO industry..
Phil Fersht: Picking up from where we left off last time, how are you seeing this kind of cross-over between this thinking around Cloud and companies pushing forward with business-focused offerings – what we’re calling business-process-as-a-service, (BPaaS)? If you take out your crystal ball, how do you see this ultimately coming together when you to look at the way this industry is going to be in a couple of years time? Do you think we are going to see deals happening where business processes are literally running in the Cloud?
Mike Salvino: I think it’s going to be longer than a couple of years. Everybody wants to throw away the existing offerings and talk about the future, but the existing offerings still work. There will still be a lot of demand for core horizontal offerings, and there are still companies that are doing it at a scale. Now, having said that, you can’t ignore the cloud. It’s going to be like the Internet. Somebody is going to figure out how to exploit it, and it’s going to give people increased computing power.
So look at our premium technology support business. We’ve hired very smart resources in our offshore delivery locations, given them access to information, and within a 24 to 48 hour period we can start debugging calls for clients. That’s compared to saying to clients, “Yes, I can put in a little call center business, here is what we are going to do and here is your six-month transition plan.” That’s a game changer. Not all processes can be on-demand, but invoice processing, sourcing, e-auctions, debugging computers and mobile devices, answering customer complaints all can be on-demand. Now, how you actually get there, or what kind of service to provide, that’s what we as an industry need to very quickly sort out.
Again, this will evolve over the next several years. Some niche plays, like premium technology support, will really take off. But the old reliables, such as F&A, procurement and HR, will still be around. And I don’t think you can look at the future without really understanding the past. You can make all the promises you want, but if you are not delivering on the client’s business case it will be a short-lived contract.
Phil: Looking to the future, I think in a relatively short time we’ll be able to bracket the innovators and the operators in this space. And the winners will be those who can really do both well. Right now, several providers in the market are clearly pushing a very operational agenda, but they are also pushing a thin veil of innovation. Do you think that’s going to continue, or do you think that clients are wising up now and looking much more realistically at what can happen? How do you see that playing out?
Mike: This game is no longer just about cost reduction and better processing transactions using Six Sigma. You have to do both of those, but assuming past data will help you predict the future, you also have to analyze the transactions, analyze the data, and then take what we call “industry insights” and help the client to change its business so it can run its business better.
If we can say to a client, “Based on what we’ve seen processing your invoices, or based on doing your procurement, we can tell you where to make more money in the next two quarters,” they will love us. I’m pushing my team to combine this type of data along with their industry knowledge and have the “past history will tell you a story” discussion with their clients, which is a very rare occurrence in this industry.
When contracts come up for renewal, we’re always asked, “Were you guys innovative enough?” What this really means is, “Did you press us to do something we couldn’t have done ourselves, and couldn’t have seen ourselves?” As providers, we need to be able to find ways to help our clients generate revenue based on the processing we are doing today.
There’s a whole bucket of providers trying to get into the cost savings and Six Sigma game. There’s another set of providers in the middle ground who’ve figured out the cost savings and Six Sigma game, and are now trying to figure out what the next step is. Many of them talking are about analytics, which is fine, but if you don’t have industry insights on top of those analytics, the data’s not going to be any good. And then there is a group of providers who are delivering the insights and have referenceable clients around them.
Phil: So where are you folks are placing your bets for the future of your BPO business?
Mike: We’re focusing on three things: industry wrappers, alternative delivery models and technology.
First, we’re wrapping industry flavors around our horizontal offerings to make them more relevant to a specific sector. For example, F&A for the retail or telecommunications industry.
Second, we’re coming up with hybrid models to help clients get things going quicker and faster by moving consulting projects into small BPO projects. It could be processing invoices to help a client deal with its backlog, or turning a sourcing project into a multi-year commitment – essentially making it easier for our consulting clients to buy BPO.
We’re also putting all of our self-service, metrics and analytics under one tool to show how HR, F&A and procurement can all play together to drive insights. While many of our competitors are going even deeper in one area, we’re trying to push the areas together to see what kinds of insights this provides us. And in terms of the cloud, I’m getting to see all the neat things Kevin Campbell, our Group Chief Executive of Technology, and his group are working on, and then working with my team to figure out how to apply this to BPO. Clients love sharp and innovative technology.
Mike Salvino (pictured) is Group Chief Executive for Business Process Outsourcing at Accenture. He is responsible for the firm’s BPO growth platform, and its comprehensive portfolio of cross-industry and industry-specific business process outsourcing (BPO) services globally. He rejoined Accenture in 2006 from Hewitt, where he served as global sales and accounts co-leader for Hewitt’s HR outsourcing group. He also served as president of the Americas region for Exult Inc., responsible for the company’s business in the United States, Canada and Latin America, prior to that company’s acquisition by Hewitt. You can access his full bio here.
According to HfS analyst Esteban Herrera, he’s seen weeping, object-throwing, suicide threats, uncontrollable roll-on-the-floor laughter, walk-outs both staged and unplanned, and even a handstand.
So let’s hear more from Esteban about about that strange place – the negotiation table…
As an outsourcing advisor for about a decade, my favorite part of any deal was the negotiations phase. Now, I realize that for many of you, that sounds like a serious illness, but it was, without a doubt, where I had the greatest impact in building a healthy relationship between two enterprises that would actually last. I’ve had the opportunity to work with some great attorneys, colleagues, clients and providers. I’ve also worked with some that would not be accurately described by the last sentence. With triple-digit deal negotiations behind me, I’ve learned a few tricks of the trade, including how to manage my famously fiery temper!
There are hundreds of great books on negotiating theory and practice, and HfS is not here to rewrite any of them, but we can shed some light on how to apply these tactics successfully in an outsourcing negotiation. A big part of it comes from saying what you mean, but it also requires accepting that buying outsourcing is not like buying a car, or toilet paper, and that your experience at the local Chevy store or purchasing MRO may not give you enough to be successful.
Negotiations need not be miserable:
I once negotiated an applications deal in a day and a half. There were five people in the room. The entire contract including all exhibits was less than 100 pages. That relationship is in its fifth year, has been renewed, and is working out great by both parties’ accounts.
I may be the only advisor to ever agree to help clients negotiate on a fixed price basis. It can and has been done, and it aligns your interests with the advisors very well.
Esteban Herrera, SVP Enterprise Sourcing Research
That said, I do believe most enterprises undervalue the importance of expert advice at the negotiating table—the people on the other side of the table do this for a living, whereas even the most outsourcing-leveraged enterprise doesn’t negotiate much more than a deal or two per year.
Overall, we’ve made contracts and process to get to them more complicated than they need to be. I once showed an astute client who had been living in a hellish ITO relationship for almost five years the thousands of pages of wonderful artifacts my firm would produce. He said “I had those last time, and look where it got me!” He made an excellent point—it’s not the detail in the agreement that will make a relationship tick—it’s the commitment and the individuals who live it every day. HfS Research is committed to helping our clients conduct simple, productive, relatively painless negotiations.
To read our Best Practice report on Real World Negotiations, click here. And feel free to share your war stories too!
I actually managed to watch “Up in the Air” the other day, and never truly realized how your can forge such a happy little existence for yourself on the road, away from all the stresses and strains of real life. 
