I was stupefied to observe Alliance Global Services, a privately-held IT services shop, join the Satyam ambulance-chasers by promoting it's "IT Partners Bill Of Rights". Alliance is hoping to get 100,000 signatures supporting some version of its bill of rights and to have the document serve as a platform to establish a "global ethic consortium for IT services vendors":
The right to demand transparency throughout every step of an engagement — from sales to contracting to delivery and termination
The right to fully understand the nature and character of an IT partner and the service that it provides to them
The right to fully understand the financial viability of an IT partner
The right to be made aware of any impending legal charges against an IT partner, should they arise, as soon as they occur
The right to arrive at a mutually agreed upon definition of the term "trusted partner"
The right to expect a clear contract that defines fees and expenses up front before any agreement is signed
The right to terminate a relationship with no financial penalty in the event of any admitted fraudulent activity
The right to demand the existence of a truly independent board of advisers
The right to expect the presence of an independent financial auditor accompanied by a set of checks and balances
The right to demand accountability for any actions taken within the scope of a technology project or as part of a firm's broader business practices
While I cannot argue with any client requesting any of the above from an IT vendor (or any client of any services supplier in any industry for that matter), this media-marketing is shamelessly exploiting the Satyam situation to market its own services and take advantage of media-hounds hungry to add fuel to this controversy. One vendor cooks the books and suddenly the whole world of offshore outsourcing is crooked? Would this action really have prevented Ramalinga Raju doing what he did? Puh-lease!
This credit-crisis-fueled recession is testing us far more deeply than merely everyone shaving a few costs while we ride this sucker out. And while it hurts, a little pain should bring about some positives that go far deeper than mere penny-pinching. We need to dig deeper to understand more about what makes us good people: fun to be with, smart to do business with, and decent returners-of-favors. I have always (somewhat naively) operated on the “what goes around comes around” principle, but I truly believe these times will help many of us get what we deserve. I don’t mind doing people favors – I just don’t do them twice if the first one never got returned when I needed it.
But we will come out of this, and we will emerge a bit smarter, a bit leaner, a bit more streetwise, and I firmly hope this will bring the best qualities out of us. We may emerge a few percentage points poorer than when we went into this, but the world we will be living in should be one where we help each other out more, and appreciate what we have.
When I look at the way many corporates and people behaved during the greed years, I sincerely hope these experiences bring a degree of humility to us all. I live and die by my friendships – whether personal or work-related, and I know many of you who have the same principles will get through the next couple of years. However, we all know people who just focus on what they can get out of others and rarely put back – those are the people I fear for in this economy, and I hope learn to act with more humility as a result.
Anyway, I will finish this little diatribe with a couple of points about how to treat our friends and colleagues:
People: remember who your friends are. Stop thinking just about your career and your self-interest, but take some time to get to know people a little better – and not simply those aspects that can further your own goals and ambitions
Work: use this episode to get smarter at what we do. Focus heavily on providing value and put in a little extra time and effort. If you are lucky enough to be in a job, remember the unluckier folks who helped you along the way, and take some time to see if you can help them out. If you are one of the unlucky ones, call in your favors – you will quickly learn who your real friends are…
I write this piece at 37,000 feet above the Atlantic, it's my birthday… and I need a break from this presentation, so forgive me this little opinionated indulgence…just this once 🙂
Taking a detour from the Satyam fiasco, I have much better news for the Indian services sector based on brand new data on the procurement business process outsourcing (BPO) market. Only a couple of years' ago, barely a small fraction of procurement work was sourced from offshore locations such as India. However, it has now reached almost 70% for all current procurement BPO engagements. Read the full post at Think Global.
When we talk about "change", we're not just talking about Washington or Detroit. We also need to include OURSELVES.
The events of the past couple of months have given us all pause for thought with our careers and what we're going to be doing in a couple of years' (or weeks' / months') time.
We had a great discussion a few months' back when we talked about the challenges of staying relevant in today's corporate climate, and this current economic shift is driving this need for relevance right down to all employees in the organization. The "relevance" discussion now goes far deeper than roles and responsibilities, it goes right into demonstrable value-add, and the ability to impact revenue. Whether you work in sales, operations, finance, marketing etc., you need to be able to tie what you do to your company's mission and revenue stream.
Bad recessions bring out different reactions from companies with their approaches to steadying the ship and readying themselves for sustained profitability. These reactions nearly always result in staff reductions, reorganizations and aggressive means of reducing both variable and fixed costs. Past recessions have resulted with most companies "snipping" costs without changing their business models, and several firms even kept hold of all their staff and rode out the downturn in anticipation of recovering much quicker and stronger than their competitors. Most of the snipping was focused on low-performers.
This time is different. Most companies – right now – are snipping staff who do not directly impact their revenue, whether they be a low or high performer. Staff who may be incredibly talented, but focus on activities that are peripheral to the company's core revenue-generation, are at risk in today's corporate environment.
Employees at risk in today's corporate climate:
1) Staff working in new product lines which are yet to have matured, or are considered discretionary in this environment;
2) Staff in management roles that are largely administrative and have limited involvement in direct sales / client relationships;
3) Staff who are unpopular and considered to have a negative impact on revenue development;
4) Low-performers, which the company has wanted to shed for a while and now see the long cold winteras a chance to ease them off the payroll with limited reproach.
And if you are unlucky enough to get caught in the cross-fire, your next challenge is to understand why this happened. Most likely, you were unlucky and need to find a new opportunity that aligns you with another firm's core revenue channel. But if you dig really deep, you may have to concede that you need to develop your skills and knowledge to make yourself attractive to future employers, so you can directly impact their core businesses. I believe we'll see many people seeking career changes in the coming year as they concede their current skills and experience are no longer as relevant as they once were.
New growth and investment areas, such as health-care, renewable energy, new technology development, are going to be the lucky recipients of an influx of talent willing to retrain for long-term career security. Moreover, jobs in the public sector and education are now appearing far, far more attractive than they were a couple of years' ago.
All-in-all, we're moving into an environment where some industries will find their feet, others will decline and some may die altogether. Many people will be refocusing their careers in new areas that they may not have envisaged in the recent past. One thing is clear – we are in new era where people are going to have get used to change and learn to adapt themselves to new job roles, new routines… and new expectations.
Amigos – I'm excited to announce the launch of a sister-blog to Horses for Sources : here ariseth "Think Global", with focus on global delivery strategy, BPO, supply chain and IT services trends. My firm, AMR Research (God bless 'em) has admirably tolerated the Horses for a long time now, until finally asking if I'll consider extending my verbosity to our research content, to which many of you do not gain access. I've kicked this off with complimentary access to a new research article entitled "Beware of Myopic Cost Cutting: Use Outsourcing To Be More Competitive in This Economy".
I've always used the Horses platform as an outlet to knock around views, cultivate ideas and take the industry temperature. So many of you have been part of that. And, while we might not always have been 100% accurate, we've collectively generated so many gems of insight that I frequently read our commentary to add some color to what I am thinking – and I know many of you do the same.
The power of the blogsphere is truly extending to the analyst world. And while some of the other analyst firms have pushed their blog strategies for a while now, I am (for once) going to brag that none of them have come close to cracking the blogging code. Over here we have, and it's time to take it mainstream.
Horses will not be going away, but will run in tandem with Think Global. I hope you take a little time to pay a visit.
While you're there, please also check out the blogs from a couple of AMR's industry legends, Bruce Richardson and Kevin O'Marah. I'll see you over there…
When we look at the carnage of our economy, it's not too hard to come to one hard conclusion: we're at rock bottom. And we may even get worse than rock bottom, but fortunately the English language has yet to cater for an expression of such depths of bottomness, so we'll just stick with "rock".
The consequences of the next few months' policies are going to shape how we recover from this. And while many have tried to devalue the importance of the US as the epicenter of the world economy, noone can escape the fact that the US is tasked globally with dragging us out of our current predicament.
The Chinese have long-boasted that they can shut themselves off from the problems of the West and thrive on their domestic and regional dominance, but the world's second-largest economy is now suffering from more severe recessionary problems than those which Western countries are going through (Iceland aside). They thrived on the US economic prosperity and its free-spending of the last two decades.
And having just spent three days with the leading retailers at the NRF show, all I can tell you is we're in dire need of an economic stimulus package and some new leadership. What a time for a new President to take the reigns – and what a mandate he has to make some bold new policies. Just when we're running out of hope, here comes the audacious one. Over to you Mr O… you couldn't have dreamed of a better platform to change the world.
We've had the privilege of hearing from a host of industry leaders over the last couple of years (just look under the Outsourcing Heroscategory), and I'm delighted to present an interview with Deloitte's Jason Geller. Jason has been instrumental in driving some of the largest and most complex global HR transformation initiatives over the last decade, and has gained a stellar reputation within the industry as one of HR's most prominent thought leaders and consultants. I also had the privilege of working with Jason, and discovered he's quite a bashful chap who frequently shuns the spotlight in favor of his colleagues, so I thought I'd do something about that…
PF: Jason, in a nutshell, what do you see as the major challenges and opportunities facing HR executives today – and what measures do you recommend to address these?
JG: In these uncertain times, it is more important than ever to focus HR on activities that create business value. That means having a HR Strategy/Business Plan laser-focused on business value drivers:
Revenue Growth: Business Transformation, Globalization, M&A, New Markets, Innovation
Talent Strategies: Workforce Planning, Learning & Development, Total Rewards, Mass Career, Customization, Global Mobility
Operational Effectiveness: HR Policy, HR Service Delivery, HR Operations & Technology, Change and Culture, HR Analytics, Compliance
HR must deliver the HR services needed to support business strategy, such as revenue growth, talent and operational effectiveness. HR must make sure it is doing the right qqwork at the right level within the organization: By the right person; At the right location; By the right entity; Through the right delivery method; By the right HR role, which will lead to improved alignment with business goals.
The economic environment adds a complicating factor to HR ability to deliver business. It must determine how to support the business strategy while at the same time maintaining, or even reducing, the cost base for HR services – that will require a hard look at programs and policies, not just process, technology, and sourcing.
PF: Being one of the behind-the-scenes pioneers of HRO delivery models, you've already experienced first-hand the opportunities and challenges of HRO. Where do you see the industry going in 2009? Are we really back on a growth path, and what will the characteristics of future HRO initiatives look like?
JG: The HRO industry has evolved, matured, and morphed over the past 10 years. The early lift and shift driven HRO model focused on cost first and value second. When it became clear that lift and shift was not viable, the focus moved to transformation based deals where cost mattered, but value was equally, if not more, important. As we head into 2009 I believe that the HRO industry will go through yet another round of maturation. With a smarter provider and buyer community, the industry will grow again.
Some key characteristics of the HRO initiatives moving forward:
HRO does NOT equal HR Transformation. In the rush to move away from the lift and shift HRO model, HRO and HR Transformation became synonyms for each other. While HRO can be an enabler of HR Transformation, organizations looking to transform HR need to do much more than just HRO. With better context and a more realistic set of expectations, the buyer/provider HRO relationships will be more successful.
Multiple HRO Providers and Multiple Contracts. In the past, organizations have always looked for the “one throat to choke” when constructing an HRO deal. Moving forward, there will be a greater openness to having multiple HRO and HR Consulting providers involved in a deal, each focusing on their areas of strength. Depending on the scope and nature of the deal, this may result in multiple contracts directly between the various providers and the client. This doesn’t signal the end of the “mega” deal, just another options for organizations to consider.
Client Side Solution, Implementation, and Governance Responsibility and Accountability. As HRO deals evolve, the role of the client during the solution design, implementation, and ongoing governance will become significantly more important. It is no longer about providing requirements for a single HRO provider to implement and operate. The client must now be intimately involved in architecting the solution, leading the implementation, and managing the ongoing delivery, particularly the coordination among the various providers. The complexity that was once the responsibility of the HRO provider now becomes the client’s to manage.
HRO Solution Definition. In the drive for standardization and commercialization of HRO, providers attempted to define and sell a “standard” solution to clients. Unfortunately, conceptual level standards discussed during the sales process actually end up creating a greater gap in expectations during the implementation. The understanding and implications of a standard solution sold by the provider and purchased by the buyer is rarely aligned. Moving forward, I expect a greater emphasis on embedding the true details of a standard solution in the contracting process, before the final deal is signed, with the main goal of reducing assumptions on either side to bring more predictability to the implementations.
PF: Do you see the economic challenges impeding investments in strategic HR initiatives? And what's your advice to HR executives in this environment?
The bar will certainly be higher as HR request funding from a smaller pool of corporate dollars to support investments. HR must provide a measurable contribution to the growth and profitability of the organization and to each business segment. Additionally, HR must provide greater access to HR services, resources, tools, and information to focus on the business, its employees, and the more effective deployment of talent for business growth. The key is to demonstrate the business value of their HR initiatives.
Organizations will have to carefully balance short term HR and people related cost savings against the longer term strategic needs of the function and the organization overall. The economy will rebound and the war for talent will be back in full force – not simply isolated to key positions, but talent broadly.
PF: And how do you see the role of HR technology impacting the HR function in the next few years? Do you see a rosy future for the best-of-breed HR applications, or a move towards more holistic services-led talent services from the HR service providers and consultancies?
JG: HR technology has been and will continue to be an important enabler of an HR functions ability to meet its objectives. Organizations have more options than ever before – traditional ERPs, Software as a Service ERPs, Point Solutions, HRO Provider Delivered Solutions, etc. With more options, comes more complexity. The integration of these various components into a holistic HR technology platform becomes essential to deliver the promised value. The integration needs to take place from the data level to the HR service center/help desk level and all the way to the end user experience level in the portal. The architecture of the HR technology platform and how it works within the context of the overall HR service delivery model is absolutely critical. They must be designed together, not separately.
With respect to the Talent technology marketplace, there is still a significant opportunity for improvement. The term Talent is used very broadly in an attempt to sell services, technology, and outsourcing. The term is inconsistently used and the solutions pitched by vendors vary greatly creating confusion in the marketplace.
There is a clear business demand for a comprehensive approach to Talent – Talent Strategy, Talent Solutions, and Talent Infrastructure. Talent technology is an important part of the equation, but not the total answer. Just like the marketplace learned that implementing an ERP or signing an HRO deal was not the same thing as HR Transformation, the marketplace is learning that implementing a Talent technology solution is not the same thing as having a true complete, business driven approach to Talent.
Jason Geller is a Principal in Deloitte Consulting's Human Capital practice where he leads the Northeast HR Transformation service line and is responsible for Deloitte's global HR BPO competency. He primarily consults to global organizations on their HR transformation initiatives.
A great quote to cap a sad story for Satyam’s Ramalinga Raju, who resigned as Chairman today.
Following the recent issues regarding Satyam’s financial irregularities, India’s IT-BPO services industry finds itself under increased financial scrutiny from Wall St analysts and corporate clients. However, while Satyam has a major challenge ahead to maintain its market position and is a likely takeover target, we do not believe this fiasco will have longer-term ramifications for the Indian services sector as long as Satyam’s creative accounting turns out to be an isolated incident and not a more pervasive problem across the sector.
Satyam’s existing customers will ask questions but are unlikely to switch suppliers unless Satyam loses a large number of crucial operational staff in the coming weeks. However, Satyam is now at a disadvantage in winning new business in the short-term as it struggles to shake off the current controversy. Plus, some customers renewing existing agreements will be evaluating alternative service provider options, in the wake of the uncertainty surrounding Satyam’s future. Its new leadership needs to move fast to right the ship and placate corporate accounts, and likely prepare the firm for an imminent takeover – the firm’s stock just hit a new all-time low. With Satyam’s strength across software service areas, particularly high-margin enterprise application services – we believe potential suitors include
HP, Wipro, IBM, and possibly Genpact, whose major investor, general Atlantic Partners, may want to marry Satyam’s IT services strength with genpact’s BPO offerings. etc. Satyam also has a growing BPO competency, largely centered on procurement and supply chain support functions, which increases its potential attraction to some acquisitive competitors, as few large service providers today have a strong supply chain outsourcing portfolio.
Regarding India’s outsourcing scene, while customers from the US and Europe will (and should!) ask questions about the health of specific IT-BPO service providers headquartered in India, this current predicament is Satyam’s alone. While other Indian-HQed suppliers need to be prepared to answer tough questions from clients and Wall Street as scrutiny on the sector hots up, we do not expect this to be a sustained issue in the medium-long term.
This credit-crisis-fueled recession is testing us far more deeply than merely everyone shaving a few costs while we ride this sucker out. And while it hurts, a little pain should bring about some positives that go far deeper than mere penny-pinching. We need to dig deeper to understand more about what makes us good people: fun to be with, smart to do business with, and decent returners-of-favors. I have always (somewhat naively) operated on the “what goes around comes around” principle, but I truly believe these times will help many of us get what we deserve. I don’t mind doing people favors – I just don’t do them twice if the first one never got returned when I needed it.
When we look at the carnage of our economy, it's not too hard to come to one hard conclusion: we're at rock bottom. And we may even get worse than rock bottom, but fortunately the English language has yet to cater for an expression of such depths of bottomness, so we'll just stick with "rock". 
