Monthly Archives: Feb 2021

Welcome to Nischala-land!

February 24, 2021 | Phil Fersht


Many of you saw we recently hired the analyst industry's first "storyteller"... and do we have some stories to tell!  Nischala Murthy Kaushik has joined us to drive a crisp and enticing narrative for our industry during these turbulent times of change, which she will attempt to fit between her yoga and meditation sessions, and her amazing dinners with hubby Saurabh and young ladies Naisha and Tanishka. 

Nischala will curate the HFS 2025 vision and values to the industry using her substantial social media presence - she was recently named among the Top 20 LinkedIn Voices for India. In addition to working closely with our research team, she is a blogger, thinker, and provocateur in her own right including bylines in Huffington Post and The Economic Times, with a strong focus on inclusion and diversity.  So let's find out a bit more about HFS' latest acquisition...

Phil Fersht: Hi Nischala - we are extremely happy you have chosen to focus the next phase of your career with us.  But taking a step back, can you talk about your early years and why you chose a career in the IT services industry?  Was this the career you always wanted?  

Nischala Murthy Kaushik - Phil – Firstly, Thank you for being instrumental in my career shift. I look forward to working with you and the HFS team for the next phase of my career.

Time travel into the past is always a nostalgic experience. As a kid, I aspired to walk down a new career path in line with the seasons – from a genetic researcher to a doctor, to starting my own business venture (my extended family has lots of doctors, entrepreneurs, and some both!), to being part of the fashion industry to competitive sports!

However, the reality was that I have always excelled in Math and Science at school, and in India, one of the preferred career paths for kids who do well in these subjects tends to be around Engineering and Technology. In my case, there was a strong influence and a role model in my father – who studied at IIT (Indian Institute of Technology) and went on to do his Ph.D. in the US. When he returned to India, he chose to work with TCS as one of its initial set of employees!  And since I had seen him walk down that career path, I naturally gravitated towards it.

So my Engineering degree paved the way for a career in the IT services industry.  Once I started my professional journey, the penchant for ‘new and diverse experiences’ has fuelled my career taking me across the world to exciting and interesting destinations (US, Europe, India) for work assignments in strategy consulting, technology solution development and leading innovations. Over the past two decades, exposure to global companies, diverse cultures and work environments, different world views, and ways of working have shaped my career and outlook - giving me a holistic understanding of the IT industry.

After more than two decades with Wipro, what do you feel have been your greatest accomplishments, Nischala, and how do you hope to take these experiences into the analyst industry with HFS?

I have been fortunate to play many varied and exciting roles, Phil, and each has been a great learning experience. I strongly subscribe to the mantra – After every 3 years, one should change your role, boss, team, or company! Along the way, I experienced many leadership shifts

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Posted in: IT Outsourcing / IT ServicesOutsourcing Heros



The 9-to-5 job is officially dead... Work-from-Anywhere becomes our new reality

February 18, 2021 | Melissa O'BrienPhil Fersht

With companies the size and stature of Aetna, Amazon, Nationwide Insurance, Microsoft, and Unilever committing to the hybrid work model well beyond Covid-19, where home working is encouraged, you know a seismic shift to the corporate work culture is firmly underway.  Simply put, most firms are enjoying the lesser reliance on expensive corporate real estate, combined with the novel environment to design and automate processes in a cloud model – because there is simply no choice but to embrace digital head-on if they are to survive.

The true benefits of digital are all about scaling your business at a speed and cost-efficiency that keeps you ahead of your customers’ needs.  It’s all been about breaking the cycle where you had to keep adding people to ensure growth – for today and tomorrow, it's about doing more business from the same (or less) resources. 

OneOffice is the mindset to put real digital transformation into action, and there has never been a burning platform like the Work-From-Anywhere (WFA) revolution to force this change

Some of the world’s largest enterprises still have up to 100% staff working from home and have managed as a remote workforce for a year now.  A recent HFS study of 400 Global 2000 enterprises reveals that barely more than a third of enterprises intend to return to an office-based corporate model:

Office-based environments will never return to pre-COVID levels: We will have a significant Work-from-Anywhere workforce


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It is very unlikely that most enterprises will return to full-time office work, and the ramifications are plentiful and we evolve into Work-from-Anywhere

This is a complicated puzzle to solve, especially for large enterprises with a wide breadth of business functions and roles.  This essentially leaves us with four pivotal questions to answer:

  • The 9-5 workday is dead, but what does the new workday (and workforce) actually look like?
  • How can businesses prevent burnout while ensuring productivity at the same time?
  • How can workers adapt their skillsets that will stand them in good stead in this emerging environment?
  • And how do they ensure employee satisfaction while making the right decisions for security and business stability?

The new mentality is all about measuring outcomes from getting work done, as opposed to the inputs of resourcing for work

The nature of work is fundamentally changing, and if companies manage this shift effectively, it will change the work environment for the better for ambitious enterprises.  What’s needed is a solid grasp on what the long-term pivot to a ‘work from anywhere’ means to businesses, and a plan to make the remote workforce a part of the Digital OneOffice mindset.   Ideally, these changes switch the mentality to an outcomes-focused model where all that really matters is that work gets done and customers and employees are satisfied, regardless of where either is physically located.

The why, the what, and the how of Work From Anywhere in 2021... and beyond

The “why” of work from home was starkly apparent in March 2020, when employees were compelled to work from home en masse to mitigate the virus’s spread.  Now, it’s a different story.  Now we’ve learned that when you have the right process and tools, work from home actually works.  In many cases, it works better than traditional office working models – if it’s done right. We have spent a lot of time talking to the top contact center services companies and their enterprise clients about how they managed the disruption and are sustaining the new remote model.  If these guys can master the WFA transformation while delivering incredibly high-touch services (which are rife with security concerns and imbued with a significant social dynamic in physical workforce spaces) – and make them work really well –   we all have some lessons to learn from these folks. 

The very basics of WFA success - the ‘what’ -  are the elements of employee setups that are required to keep the operation ticking: the five tenets of long-term work at home success (see below).  Each of these elements -- health and safety, security, employee engagement, flexibility and agility, and technology enablement need to be pillars of your work from home strategy, or it will fall flat, causing frustration at best and disaster at worst. 


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The last few months have taught most companies how to stabilize and operationalize a work from home model.  But what’s next?  Now we need to formalize this, optimize it, and most importantly, adapt how we do business to the new(ish) remote dynamic that clearly isn’t going away any time soon.  Now, it’s time for enterprises to roll up their sleeves and learn the HOW – how to optimize for better performance, to drive business value, and to shift with the evolving needs of customers and employees.  How can you make work from anywhere a catalyst that helps your firm in its journey and mindset toward OneOffice, where traditional business siloes are broken down, employee and customer experiences are tightly aligned, and what matters most is clearly articulated outcomes?  Here are our top recommendations for strategizing on a long-term work from anywhere strategy.

Formalizing your Work From Anywhere operations as a strategic element of the OneOffice journey

  1. ‘Wellness’ has a deeper meaning in a remote environment. Understanding what wellness means in a virtual world is knowing that it’s much more than temperature checks and making sure people ‘show up’ for work.  While we must first ensure that people are healthy and have the proper conditions to do their jobs, the dynamics of working remotely raise new and sometimes less tangible concerns.  Mental health issues are strained in quarantine and lock-down circumstances.  Zoom fatigue is real, where exhaustion levels plague productivity and staff are given little time to focus on executing work, away from the constant obsession with having video-meetings on every topic imaginable.  You must have a formalized proactive outreach to ensure people have are ‘OK’ and if they aren’t, provide or recommend resources to help them deal with the trials they’re enduring.  Some leading service providers have implemented biometric tools that can use things like keystroke patterns to detect if someone is getting fatigued.  It sounds a bit Orwellian, but consider the relief of an exhausted worker who gets a pop-up notification suggesting it’s time to take a much-needed break.  As with any new tech, it can seem scary until people see the benefit to their lives or jobs.
  2. You must formally track employee engagement in a remote model. Apart from general wellness, employee engagement and performance management is an entirely different beast in a remote environment.   Take the contact center, for example; these are folks who are used to several team ‘huddles’ a day, regular one on one coaching, often from floor walking managers who are picking up on physical cues to sense the need for help, not to mention the socialization of breakrooms and camaraderie with colleagues. This has been one of the most disrupted of the enterprise functions, and flipping all this to a virtual model means setting up collaboration tools and workspaces that enable a semblance of this kind of engagement. Not everyone works well in this environment, especially those that thrive on a social element.  You will need to re-evaluate what a successful talent profile looks like for remote work, as well as make considerations for talented staff you want to retain in a potential hybrid scenario (see #4).  This is where your data and analytics must take a front and center role to better track not only performance management but also recruitment and hiring data, and employee satisfaction.
  3. Collab tools and environments won’t work without a culture of collaboration. So you’ve put the tools in place to enable collaboration, but will people want to?  You need to have the kind of culture where people feel as though their voice is actually being heard and their input is considered; otherwise, they will not be incentivized to contribute.  If people struggled with collaborating in person, this could be exacerbated in the sometimes awkward, stilted venues of Zoom chats and Teams meetings.  People need the confidence to share ideas and know that they are valued.  It is now even more critical for leaders to listen in order to motivate. 
  4. Embrace flexibility and agility, as ‘normal’ continues to shift, and varying degrees of hybrid will ensue. Just as retailers have pivoted to find the right balance of options for the shopper that encompass both safe physical experiences and seamless e-commerce based on consumer preference, companies must also adopt a flexible mentality to cater to employee expectations.   Salesforce’s recent announcement offering ‘flex’ plans for employees to decide what makes sense for their work and risk situation is an example of this.  Also, as you roll out hybrid programs, be prepared for the impacts of fluctuating pandemic conditions and local government regulations, which may suddenly shift everything fully remote once again.
  5. Design virtual employee journeys from start to finish.  We are entering a new world where there is a potential that a person could be educated, graduated, recruited, hired, trained, promoted, etc., COMPLETELY virtually.  Employers must think about which elements of these steps are fundamentally different for remote and what elements of the employee journey you can replicate online.  Top service providers have shared effective strategies including employee persona development and journey mapping (just as we do with customers), virtual recruitment lobbies and job fairs, and virtual break rooms where people can unwind and chat (sans pool table, of course, though some have created gaming rooms where employees can challenge their colleagues to a lively round of Jeopardy).  Some of these elements are practical – the typical skills assessment, as having always been administered, is now accompanied by device qualification and ISP bandwidth testing to ensure suitability for WFH requirements.
  6. Automation and self-service should be embedded in the employee journey. Just as we expect intelligent virtual assistance and seamless password resets in our consumer lives, we expect similar experiences with their employers.  We have seen some fantastic examples of digital associates assisting with recruiting and onboarding new staff.  Also, think of the disruption to IT service desks over the last year – automation and self-service can help to make those interactions seamless. Moreover, when employees don’t have easy access to these tools, their direct supervisor often becomes the default IT helpdesk.  This is obviously not aligned to the manager’s skill set but also takes away from the precious time of coaching and development of employees.  Speaking of coaching and development, we’ve even seen digital assistants being used to help trainees practice the skills required before leveling up to practice with supervisors and finally go live with customers.  These tools must be designed to help kill mundane work to make workers more effective and to augment and support the employee experience.
  7. Now is the time to really dig in and consider diversification of the workforce. This is one of the shiniest examples of a silver lining that the massive disruption of a global pandemic has resulted in.  Now that work from home is normalized, companies can stop paying lip service to diversity and really rethink their diversity strategies to start recruiting from pools of labor that were disenfranchised in a brick-and-mortar environment; think the differently-abled or working moms, for example.  Not to mention the potential for penetrating untapped labor markets without the need for giant investments, including onshore destinations, which can help with often longed for localized resources.  Diversity should be an essential component of doing business in 2021 and beyond.
  8. Last, but perhaps most crucial: drive performance through the lens of humanity. I was struck by a recent quote from Howard Schultz, which described the culture of Starbucks as “performance-based through the lens of humanity.”  Businesses need to perform financially to survive and thrive, but as leaders, it is also important to take a step back and consider if our decisions are aligned to more holistic principles, including impact on our people, their local communities, and our global society.  We have learned more about humanity than we ever expected in the last year, and our personal lives bleed into our work and vice versa like never before. We’ve learned to see each other in a more human light.  Not just as colleagues, mentors, or resources, but as parents, caretakers, siblings, citizens - as people.  While we are physically remote, we cannot settle for a remote culture where we keep each other at arm’s length; remote working in the long term requires constant communication and transparency to ensure that employees know the company’s values and their role in influencing and delivering on them. 

The bottom line:  work-from-anywhere has become part of the fabric of company operations rather than an afterthought and a reaction to a crisis

This is true beginning of the OneOffice, five years since we introduced this mindset to our industry.  Now we must make remote working an agile and future-proof business model where talent is embraced and given the freedom to develop, outside of the confines of cube-farms and rigid 9.00-5.00 work structures.

Posted in: Contact Center and Omni-ChannelDigital OneOfficeGlobal Workforce and Talent



Ready to walk the Sanjay way?

February 07, 2021 | Phil FershtSarah Little


It's time to make Sanjay Jalona a services household name in the IT services industry. He made the jump from leadership positions at Infy to CEO and Managing Director of LTI in 2015. When I pulled up their stock chart I had to rub my eyes - thought for a moment that I was looking at the acceleration of COVID across the globe. But no, that's the 5-year snap of LTI's stock growth. Sanjay has lead LTI through an IPO in 2016 to continued momentum in growth across capabilities today.  

The COVID landscape has created massive pivots across the industry, so I was deeply curious where he was taking risks and deep dives for the future – as he will say, the capabilities where he's "throwing the kitchen sink." And speaking of the kitchen sink, we touch on everything from leading and learning with Shoshin (a beginner’s mind) to the positive changes sweeping India. Let’s begin:

Phil Fersht, CEO and Chief Analyst, HFS Research: It’s great to see you again, Sanjay, and have you join us for an HFS conversation. This is the first time we’ve had a “live” discussion, so it’d be great to have you introduce yourself a bit to our network – a little bit about Sanjay Jalona, how you ended up running a business like LTI, and a bit about how you started out. Did you always want to do this, and was this what you dreamed of? And then we’ll talk a bit more about the industry and where things are going there.

Sanjay Jalona, CEO and Managing Director of Larsen & Toubro Infotech (LTI): It’s always a pleasure to talk to you, Phil. I grew up in a small town, up north in India – six hours’ drive from Delhi in the foothills of the Himalayas. My father worked for a pharma company all his life. I studied there in a Hindi Medium school, and then went to study computer science at BITS Pilani. After that, for the last three decades, I have been involved in nothing else but the technology business.

So, I guess I’d reckon that I would completely be useless outside this industry [laughs]

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Posted in: Cloud ComputingDigital TransformationIT Outsourcing / IT Services



SAP acquiring Signavio is a cheap play to migrate enterprises onto S4/HANA. Instead it just handed the market to Celonis

February 01, 2021 | Phil FershtReetika Fleming

Why we think SAP acquiring Signavio is a non-event and actually frees Celonis from its SAP shackles to inspire its loyal following

The initial buzz from SAP leaders with its Signavio acquisition all points to helping its clients migrate from legacy systems onto cloud-based S4/HANA applications. While that is a worthy goal, SAP needs to embrace how to support both non-IT and IT clients with rapid process redesign, if it is to stand any chance of reclaiming former glories that are long-distant memories in today's high-octane environment. The German software giant has an IT-centric view of the world, where instead we need technology and business to come together to become fluent in understanding the data they need to be effective in their markets.  To create this data, processes need to be designed to deliver data at speed, and these need to be automated in the cloud to keep their enterprises functioning.  Once processes are flowing beautifully in the cloud, you can deploy all sorts of ML and AI tools to gather increasing amounts of intelligence to anticipate your own needs - and your customers - ahead of time.

Until a decade ago, SAP was, perhaps, the most significant brand and voice in enterprise technology.  The German software supremo was the enterprise backbone, the system of record, the “way of doing things” for the majority of the FORTUNE 1000.  Back then, Microsoft was already entering rigormortis as a decrepit office suite, SFDC wasn't much more than a fancy way of managing your contacts, while Workday was confusing everyone with “thin memory”, and Oracle was just a weird collection of tired con-fused software firms run by a guy who resembled a tech billionaire version of Donald Trump.

Since then, the SaaSy likes of Salesforce, Workday, and Coupa have long-driven a narrative that you had to run your processes in the cloud, while SAP labored to catch-up as a “Cloud player”.  Then came the digital juggernauts of Microsoft, Amazon, and Google to ratchet the world of enterprise technology into a very different place, where data is king and it doesn't matter how unstructured it is.

SAP has long-lost its enterprise appeal as the process connoisseur’s tech suite of choice

SAP is a symbol of a long-forgotten time when people’s careers were tied to it, when enterprises thought being locked-into an on-premise software suite was considered a strategically smart thing to do.  Hell, any IT bigwig worth their salt needed SAP plastered all over their resume. But those days faded away after 2010 as the cloud took over the core processes in smart enterprises.  

SAP made its long-rumored acquisition of workflow and process intelligence vendor Signavio official last week. The move has implications not only for the two merging tech companies, but also the market leader in process intelligence, Celonis, that until now, enjoyed a close and successful partnership with SAP. In addition, Celonis has cultivated many strong partnerships with the likes of Accenture, Cognizant, Genpact and IBM.  Will they gravitate towards as SAP-owned Signavio?  And will SAP’s army of customers really take this seriously enough to fight their CFOs for yet more cash to pump-prime the Waldorf machine?  The depressing answer for both SAP and Singavio is simply:  no one really cares.

Why SAP needs all the help it can get to earn credibility as a process orchestration and intelligence player

Every enterprise leader has taken a hard look at their business processes over the last year, seeking ways to streamline and automate tasks and get data on what is working and what broke in the move to remote working. What started as an exercise in somehow keeping the lights on in the pandemic economy, has started to turn into wider initiatives that will have a long-lasting impact. Many enterprises in our research have expressed that ‘there is no going back’, and post-pandemic, they will need a far smarter operating model, technology stack, and data-driven business processes. At the heart of this stack, for most companies, is a hodgepodge of various versions of aging business systems, fragmented over regions and markets, that are responsible for the majority of transactions that keep the business running.

Business leaders seeking their own glory on “digital transformation” and process efficiencies have implemented a plethora of bolt-on tools around core applications over the years, including business process modeling, workflow management, document and content management engines, and of course, robotic process automation. Process intelligence tools have been the latest addition to this mix. In particular, process mining technologies that use transactional system-log data (such as from SAP) to power their analytics and machine learning models.

Why Celonis was so good for SAP customers – and will still be for some time to come

The two principal uses of process mining tools that significantly help enterprises with their SAP estates include:

1) Helping operations leaders make the most of their current ERP  and other source systems, find process bottlenecks and inefficiencies, and redesign processes such as order-to-cash and procurement

2) Helping IT teams with systems migration, such as a move to S4/HANA, where the mining technology can be used to map and monitor as-is and to-be processes, and user adoption over time.

Just with those two points, we can see why SAP’s partnerships in this space have gotten deeper in the last few years and got to a point where SAP felt the need to directly invest in a solution of its own. Hence its acquisition of Signavio.

SAP needed to partner with the likes of process intelligence leader Celonis and UiPath (which acquired ProcessGold) to keep its technology ticking, and provide its customers more process visibility and automation. Now it has the ability to define how a fully integrated BPM, workflow, process mining, and automation capability can augment its core technology, beyond what third-party platforms and a host of SAP-specific products have been able to achieve.

Weaning any client with years of experience off of their beloved Celonis to switch to an inferior product owned by SAP is not going to happen… so good luck with that folks!

When it comes to process augmentation, SAP is lightyears behind the market.  In 2018, It made a low-budget attempt to enter the Robotic Process Automation (RPA)  market with Contextor, a small little-known France-based RPA product to augment SAP Leonardo’s intelligent technologies portfolio.  Nothing has been heard of them since, with no examples of SAP playing in the process automation space.  It’s been a bust.  So if SAP can’t make head nor tail of the most base form of process automation (RPA), why does it think it can take the market by storm acquiring a product which is ranked 13th in process intelligence software:


Simply-put, all the hard years the Celonis founders spent driving around Germany selling the software to SAP customers in a VW Camper (yes, I actually know this!), ensured that Celonis has firmly established itself as the process mining solution of choice, necessitating several years of investment, training and change management from its loyal clients. So why on earth would these process-obsessed customers flock to use the industry's thirteenth best solution?

Why Signavio? Its collaboration hub and process simulation capabilities couldn’t be more timely for operating in the pandemic economy

As our recent evaluation, the HFS Process Intelligence Products Top 10, showed, Signavio has multiple bright spots and differentiation making it a formidable vendor in the rapidly growing process intelligence market. Its collaborative hub is a great place for business users to share results of their process analysis, comment and present, and collectively iterate on improving business processes – invaluable at a time when most organizations are still working remotely, and need more avenues for collaboration. Furthermore, Signavio’s process mining technology, in particular its simulation engine, is considered top of the line by its customers and partners. As we’re still operating in volatile markets, being able to model out changes in business processes and simulate their execution to find potential blockages can prove valuable by de-risking or accelerating needed changes. Lastly, Signavio’s bolster’s SAP with its BPM and workflow technologies, which customers value, especially its ability to port and overlay structured process models into the process mining module for comparison.

Despite the positives, Signavio customers we have spoken to indicate that it needs to invest to keep up with innovations in process intelligence. Many disruptive startups are continually keeping up the pressure - introducing new ML and data handling techniques, and standards in data visualization and UI/UX. Additionally, process intelligence isn’t the full focus for Signavio, which until a few years ago was only a BPM/workflow vendor. SAP may have inherited some challenges in investing in the process intelligence piece of the suite.

Where does the new alliance leave old beau Celonis? In our view, stronger, and on to bigger and better things

It would seem (on the surface) that Celonis has been thrown in a lurch by SAP’s acquisition of one of its competitors. However, there is a longer story of product and company evolution unfolding here, and SAP’s move only further cements the shift: 

  1. Life outside of SAP (Bigger): While SAP was the most common source system for its customers’ transactional data, it was never the sole one. Celonis has been steadily building on its partnerships, as well as technology extensibility into Oracle, Salesforce, and ServiceNow. We expect it to show these partners more love in coming days, which will ultimately only help it serve its customers better. This will allow Celonis to break free from I being perceived as an SAP-only process mining tool and diversifying its range here is a win-win for all stakeholders.
  2. Moving onto EMS (Better): Celonis has already started expanding out from process intelligence into a Triple-A Trifecta solution approach by blending analytics, automation, and AI with the launch of its EMS last fall. As we observed, with EMS Celonis has created a system-of-engagement layer that sits on top of business processes and systems, drawing process insights, and creating execution strategies – either alerting and recommending actions to business users, or setting configurable rules to trigger automation for certain tasks. With this approach, Celonis is on a path toward not only helping you identify and rectify process bottlenecks, but also helping you execute the process itself, with smart insights and recommendations, and automation capabilities.
  3. Building an international company(Stronger): Celonis has been expanding out of Germany as it gets global in all respects - its operations, management, and customer base. Early on, it struggled to fully present an integrated international front to the market. De-prioritizing SAP will give the non-German factions a chance to catch up and shine as well.

Celonis and SAP have worked together on more than 250 implementations in over 30 countries, with clients including 3M, Airbus, Bosch, Coca Cola, ExxonMobil, Novartis, SABIC, and Zalando. Celonis is SAP’s #1 Cloud Solution Extension Partner, and the vendor has developed tons of data connectors, applications, and content to support SAP’s ERP landscape. In fact, SAP is using Celonis to optimize its own internal business processes. The two firms enjoy a shared German tech culture, and as a co-innovation partner, SAP has thus far undeniably influenced Celonis’ product direction thus far.

In conversation with HFS, Celonis leaders mentioned that this move by SAP serves to validate its investments into EMS. The start-up now considers SAP + Signavio to be a competitor to Celonis in its self-anointed EMS category.

The Bottom Line: SAP needs to prove this isn’t yet another tick-in-the box acquisition, and actively put its new process intelligence toolbox to work for enterprises, beyond S4/HANA systems migration

As we discussed earlier, there is massive potential for SAP to embed native process intelligence into its transactional processes to help clients uncover issues and improve business performance. Celonis refers to this as the EMS category. Whether or not that category name will stick, it signals a potential opportunity that is SAP’s to lose. 

However, while this all sounds great in principle for SAP, we believe Celonis customers will stay put and many will benefit from innovations that are not created with SAP in mind.  Celonis will reinforce its spot as number one in this market.

Posted in: Robotic Process AutomationIntelligent AutomationArtificial Intelligence



UiPath will finally find its true path as IPO beckons. Now can its leadership develop some humility to embrace this incredible opportunity?

January 24, 2021 | Phil FershtElena Christopher

Having introduced RPA to the world in 2012 I have (sometimes grimly) clung to the belief that RPA will eventually find its path to be a vital cog in the enterprise technology potpourri.  Blue Prism opted for the comfort of floating on the London stock exchange less than four years later in 2016, where its founders and key stakeholders opted for a modest payday, rather than make the really bold play of floating in the Big Apple and making themselves known as the pioneer of automation software.  The other two major robotic software candidates, Automation Anywhere and UiPath then proceeded to demonstrate their beauty to the big iron software giants, which all opted to seek out cheap acquisitions to scratch their RPA itch, with SAPAppian, Microsoft, and IBM all settling for small-scale tech additions, rather than making the multi-billion dollar investments AA (Automation Anywhere) and UiPath were demanding. 

So with only $450m actually being invested in RPA acquisitions from the tech sector, the $1 billion+ UiPath has been burning through (and a not-dissimilar amount with AA) clearly indicates IPO is the only realistic path forward 

It's easy to blame Covid on many things, such as the negative impact it has had on my performance in cleaning the kitchen, but one thing has been clear:  Covid amplified situations where enterprises were struggling or doing well.  In UiPath's case,  pre-Covid they tried to force a market situation before their market was ready... all they needed was the patience to wait for their market to open up for them and keep the robotic love story emerging among its starry-eyed clients. However, during 2020 UiPath far outstripped all its competitors because it has an employee base to upsell, and it made its solutions the easiest for services firms and consultants to implement. The efforts made to push their platform into as many clients as possible pre-Covid has paid real dividends with sales cycles severely restricted to those clients who already use your software.

Step up UiPath, your time is now

UiPath’s potential IPO has been whispered about for a couple of years now, but pre-Covid, AA was widely expected to be the first to IPO. With UIPath's stellar sales performance in 2020, the race to IPO has clearly swung towards UiPath as it has considerably outpaced both AA and Blue Prism in terms of license sales, and you just can't IPO when your sales performance is flagging.

To this end, in mid-December Bloomberg reported and UiPath eventually confirmed that it filed a draft registration statement on a confidential basis with the SEC for a proposed public offering of its Class A common stock.  While the filing may be confidential, UiPath is making sure the buzz about it is anything but.  If the likes of Microsoft, Oracle, and Salesforce are failing to see the value of acquiring the firm with a very, very effective services partnership strategy and rampant installed base, then it"s time to open up to the public where there is well over $1 trillion of funds just primed for a tasty investment in a tech firm that has captured the excitement of the Global 2000.

Ultimately, IPO is the only path forward for UiPath. It has received more than a $1B in funding and its investors would like some return. And when valuation makes you a "deca-corn" it's tough to find a buyer. Public markets to the rescue. While we’ve been VERY vocal about our view that RPA is in no way transformative, there is a ton of “now” value to be reaped from helping enterprises prop up legacy for another couple of years.  Their investors have always been very clear that the “now” value of RPA is what makes it investment-worthy. And in a pandemic, clearly more so.

All the ingredients are there for UIPath to IPO and change its mindset 

Meanwhile, UiPath continues to invest in its product functionality both organically and via M&A, driving capabilities beyond core rules-only RPA to help it better grapple with unstructured data and support process intelligence. However, HFS sees zero chance of UiPath ever realizing its vision of a robot for every human (which we affectionately refer to as a thinly veiled plan for a license for every client employee) or at least not in its current incarnation which is still predominantly unattended. Microsoft, which just completed the native integration of Winautomation from its acquisition of Softomotive is tracking much more in this direction (Clippy2 anyone?) and has a massive base of desktop users to convert.  Nor is UiPath poised to become the “new ERP” as suggested in their recent 2021 predictions – largely because RPA alone, despite the upgrades, does not possess enough functionality to be the epicenter of process and workflow orchestration that sits atop existing enterprise apps.    

As for the IPO path, UiPath has been adding customers hand-over-fist, generating massive growth figures. UiPath would be successful by every measure if they could crack the customer scale code. But that’s the challenge – they won’t. RPA has an expiration date that kicks in with legacy modernization. It doesn’t scale not because it can’t but because enterprises don’t need it to. Enterprises can keep using the same 50 bot license and get what they need year on year. 

Bottom-line: @UiPath holds the attention of the RPA industry vying to become the first public multi-billion-dollar robotics platform to float on the #NASDAQ.  Now its leadership must show maturity and embrace reality. Their time is now .

While it's easy to criticize anyone in a market that is still flying by the seat of its pants, we have to give UiPath credit for outpacing all its competitors over 2020 and finding itself in pole position to IPO as early as next month.  When you consider the only other recent tech IPO was the long-established Cloud firm Rackspace, the market will welcome the market leader in robotics software and make its investors very happy after a  frustrating three years of confusing marketing, fantastical narratives, and an incredibly poor ability to win the hearts of many influential analysts.  But you know HFS, we can dish it out, and we can also take a punch or two.  But we always err on the side of reality, and the reality here is that UiPath will succeed in being the first robotics platform to IPO.  It has become the automation platform for many of the leading service providers, and while scaling has been a real challenge, UiPath is winning that battle.  The company actually refuses to talk to me or my brilliant colleague Elena Christopher these days because its leadership couldn't stomach some hard truths we dished out to them pre-Covid (and refused to spend a few minutes digesting data on 372 enterprises).  But that's OK - if you want to control all the narrative and cannot find the humility to take a few punches when you need to take them, you only need to look at other leadership disasters to see where that attitude takes you.  Huge egos and inability to listen will see anyone fail.  Creating a narrative everyone can believe in, embracing your critics and designing a strategy we call all learn to love are the keys to success beyond IPO.

So this is a time to embrace the hard-won success of Daniel Dines and his team to see RPA finally establish itself in the "work from anywhere" enterprise tech stack.  Now let's hope they can control their egos a bit better to embrace the much more lucrative industry that awaits them.

Posted in: Robotic Process AutomationIntelligent AutomationRobotic Transformation Software



The proposed Atos-DXC takeover is papering over some very deep cracks from a bygone era

January 10, 2021 | Phil FershtTom Reuner

The IT services market has arrived at its most critical infection point in 20 years, where the role of service providers that survive the Covid era will be those that have made the shift from support firm (Phase 1) to a business partner (Phase 2).  We've talked about this services shift ever since Tom Reuner and I were young analysts.  And we're not very young anymore.  Especially Dr. Reuner.  

So why on earth is Atos bidding to make some wild takeover of DXC?  Let's understand the burning platform driving this

When the first major tranche of IT support deals evolved to a heavy dependence on India as a delivery location to exploit lower-cost labor at scale, made possible by the original Internet revolution. In the early days of the offshore era, the more ambitious traditional IT services firms, at the time, developed their own global delivery models with the goal of staying relevant, in the face of emerging competition from the "Indian Pure Plays" (as they were known in those days).  This included the likes of Accenture, Capgemini, HP, and IBM - all of whom invested in India to attempt their own flavor of global service delivery with "added value" that the IPPs - at the time - could not (yet) deliver.  The traditional IT service firms which failed to invest effectively in the global delivery model, once-great brands such as ACS, CSC and EDS, all got acquired by traditional western outfits.  And the IPPs which failed to break into the Indian Top Tier eventually got rolled up into the second tier of traditional IT services shops, desperate to keep competitive, such as Patni, IGATE, and Syntel.  

Covid has forced the services industry to make the rapid pivot from bread-and-butter to business-transformation services

Getting to the point of this little history lesson, we need to understand the motivations behind these acquisitive moves.  Phase 1 was all about cost, scale, growth, and profitability as IT services firms could save the Global 2000 billions of dollars by exploiting cheaper talent at scale.  If you weren't in the game of pulling the cost lever - and adding above-average value somewhere to justify yourself to your clients - you either made a graceful exit to a willing suitor adding you to their own scale game - or chose to tread water and watch yourself get progressively smaller and desperate, until you got to a point where nones wanted to buy you anymore.  I'll share these firms' identities over a drink if you can't guess who there are already.

This new era of services (Phase 2) is seeing a clear bifurcation between the bread-and-butter services of the years pre-Covid - namely standard IT infra, app development and support, and BPO - and the present-day transformative services that run your borderless, work-from-anywhere business operations in the cloud, dependent on deep skills in data science, process design, automation, and most importantly, business logic and training people to become digitally-fluent. You can read our HFS 2025 Services Vision here.

The drawn-out Pandemic Era has forced the route into the cloud; it has forced processes to be re-designed and automated (or re-automated); it has forced enterprises to embrace rapid change, and it has forced the leading service providers to put their money where their mouths are or face a painful drain-circling experience as the bottom falls out of the traditional services model.

The new leaders in Phase 2 of IT services are rapidly emerging – and these do not include Atos and DXC.  

IBM is spinning out its legacy infrastructure business while Hyperscalers like Google are starting to win comprehensive cloud deals as in the case of Deutsche Bank. Furthermore, accelerated by the pandemic service providers are reorganizing their business around the cloud. In addition, we are seeing a spate of mega-outsourcing deals in the billions as the word’s fourth-largest economy, Germany, finally warms up to outsourcing by doing “big-bang” deals to the likes of Infosys, TCS, and Wipro, keen to exploit this market and strengthen for the expected recovery later this year, where we forecast growth of 5%+ across services markets.  Atos also got its piece of the action successfully extending its partnership with Siemens for another five years (see below), so this does beg the question why it needs DXC, as it clearly need to focus on making that shift from Phase 1 to Phase 2, and its very difficult to understand how a gargantuan merger is what it needs right now.  Simply put, this is probably the most complex services merger ever contemplated by two firms which do not have a great track record of large, complex mergers:

Against this background, the announcements that Atos and DXC are publicly reporting a potential takeover of DXC by Atos - in the region of $10 billion - are very surprising, as both firms have been struggling to keep pace with the market leaders for years, and Covid has not provided any respite for either, although DXC has shown some signs of arresting its decline under the leadership of Mike Salvino now in his second year at the helm. Having providers officially confirming takeover discussions is highly unusual, which indicates a merger could well be inevitable if the numbers add up to the stakeholders that matter. Yet, the central strategic question is whether there is an opportunity to consolidate and scale lower margin legacy businesses rather than focusing on investing in innovation.

Rather than getting bigger, these services firms need to spin off their legacy businesses.  This proposed merger is illogical.

Currently, HFS sees little value in merging these two firms together, as the only potential value is more in scale and geography, as opposed to deep areas of innovation where both firms are struggling in this tough market.  The muted reactions from Wall St tell enough of a story already – this whole merger proposal smells like a consolidation exercise that could be even less effective than the carnage caused when HP and CSC merged to form DXC in 2016.  What’s more, Atos has struggled to derive much value from its major offshore-centric investment Syntel, so the chances of an Atos-led juggernaut of mainly legacy services business-lines being effective are highly questionable. 

While we laud the value of OneOffice at HFS, this could be the antithesis version, with a hundred-plus 'offices' all grimly clinging to survival.  We believe the IBM model of spinning out legacy business lines from growth business lines is the smart way forward.  That is not to say a merged DXC and Atos could not pursue a smart strategy, but the simple fact that neither has done this to date gives us little confidence that they will.

So let’s take a look under the covers...

Atos and DXC are caught between a rock and a hard place: Losing out on recent large deals while having limited levers for margin improvement

The recent major contract wins of TCS at Walgreens, Infosys’ double swoop at Vanguard and Daimler, and Wipro at Metro paints a bleak picture. It is too simplistic to point out that some of these were asset-heavy deals as an explanation for the lack of success. In particular, in the context of Daimler, there is a strong cloud element and the synergies across the automotive ecosystem are immense in areas like supply chain, cloud agility and creating of data value. While in the Walgreens extension contract, a strong emphasis was placed on digital innovation. The key question for both providers is where revenue growth should come from as the anemic growth as Exhibit 1 highlights: 

Click to Enlarge

If topline growth is not the priority then margins have to be improved by either extreme efficiency of operations and/or deep investments in innovation. As our Triple Trifecta Services Top 10 has demonstrated, neither organization made it to the overall Top 10. Atos has strong investments in innovation and a solid vision but struggles around execution. DXC has not even made the Top 10 in any of the various categories. As such deeper investments in innovation but more importantly, the execution of it should be top of mind to Atos.

The deal logic appears to hinge on three pillars:

  • Finally, Giving Atos scale in the US market
  • Cross-selling between accounts
  • Aggressive cost take-out

Atos has a solid track record in M&A. While Syntel might have been fluffed, it managed to extract value out of stagnated businesses like Siemens, Xerox, and Bull. But we see the deal at best as a defensive move that would be buying Atos management time for other strategic moves. While Mike Salvino has stabilized DXC, he has taken over an organization that was demoralized and exhausted after continuous excessive cost-cutting and management change. . His task ahead is perhaps best illustrated by a comparison of operating margins. In Q3 2020, DXC was at 6.2% while Infosys achieved top-in-class with 25.4% and bellwether Accenture came in at 14.3%. Thus, the reported price of $10billion would represent a significant premium on a market capitalization of ca. $7.4bn that is likely to tempt shareholders to accept the offer. 

Atos needs to reinvigorate around innovation – not legacy

M&A is in Atos’ DNA. The company is built on perpetual acquisition activity. The extension of the Siemens outsourcing contract in September 2020 is testimony that it can extract value even from highly challenging acquisition targets. Yet, DXC both in terms of scale as well as the culture would be its biggest challenge to date. The acquisition would also come at a time where the company is going through an organizational restructuring dubbed SPRING. With that  Atos is moving from a largely horizontal go-to-market to one that is focused on verticals. OneCloud will be the first practice for this new organizational setup. Atos is late with a move toward verticalization and DXC is more advanced. But the key strategic issue goes beyond culture and integration. With the deal, Atos would become a consolidator of legacy businesses. Yet as Accenture and the Indian heritage provider demonstrate, value stems from moving aggressively toward innovation.

DXC is still suffering from its own ill-timed M&A

With a certain irony, DXC is still suffering from its ill-timed acquisition of EDS in 2008 at a time when the outsourcing market was shifting toward more discrete deals with a strong digital flavor. The margin erosion in ITO and infrastructure projects is still haunting DXC. However, in sharp contrast for instance to IBM, there is no RedHat in sight which could act as a catalyst for change. Rather Mike Salvino has evaluated “Strategic Alternatives” for three business units: the U.S., state, and local health and human services business; its horizontal BPS business; and its workplace and mobility business. The public sector business has meanwhile being sold while the other two units will be retained. But this process makes clear that the whole business model is under constant review. Despite more targeted moves like for Luxoft, it appears unlikely that DXC could turn into a consolidator. Therefore, its strategic options are limited.

Bottom-line: The consolidation of legacy businesses will make bankers and executive management happy, but it won’t transform Atos

While Atos might finally get to get to scale in the US, the proposed deal lacks imagination as neither firm adds much of the new world to the traditional world. The offshore component of both firms is not compelling when compared to any of the leaders.  For example, their capabilities across the emerging market areas of the OneOffice platform, such as ServiceNow, Salesforce, Pega, SAP S4 Hana and Workday are not leading edge, and business process services investments across both firms have long been neglected. Yes, Atos management might be buying time for a more incisive transformation, but the strategic headwinds are already immense. Clients are looking for trusted partners to accelerate the Phase 2 services journey toward the OneOffice. Doubling-down on legacy-at-scale is hardly a compelling pitch to move up the value chain.

Posted in: Business Process Outsourcing (BPO)Cloud ComputingIT Outsourcing / IT Services



OneOffice is all about anticipating customer needs before they even know what they are...

January 09, 2021 | Phil Fersht

OneOffice is all about putting the customer front and center by having end-to-end processes automated in the cloud enabling great AI to help you make winning decisions...

Posted in: Absolutely Meaningless ComedyDigital OneOffice



Introducing the Tech Stack to power Native Automation, Data and Process Design: The OneOffice Platform

December 30, 2020 | Phil FershtElena ChristopherTom Reuner

Posted in: Business Process Outsourcing (BPO)IT Outsourcing / IT ServicesDigital OneOffice



He's got the Cloud in his soul... his name is Joel

December 28, 2020 | Phil Fersht

Joel Martin heads for the Cloud with HFS to lead the Cloud strategies practice

It's funny when you meet these people across all corners of the globe during your career and you get that feeling that you'll cross paths again in the future.

I first met Joel in 2002 when I was a Bio-IT analyst (yeah, I actually did that) in Australia working for IDC and Joel was running the PC tracker for the ANZ region.

Fast forward 19 years and Joel, and after his 10-year IDC stint, a couple of cyber-security and research startups; and a product marketing stint at Microsoft, got in touch about something that had nothing to do with the role for leading our new Cloud Practice was being advertised...   I even asked him if he knew anyone when I thought "Hang on Joel, what are you doing these says...".

To cut a long story short, Joel is now our first permanent Canadian employee, based in tropical Ottowa, with 2 daughters, (tries to) play guitar, and has mastered Bar B Qing at -20C. He has lived and worked all over the world and somehow still ended up in Ottowa.  But that's OK because we now officially have HFS Canada!  He is also leading HFS' new Cloud Practice to help the big pivot into the virtual work-anywhere world.

Phil Fersht, HFS: Before we get to all the work stuff, Joel, can you share a little bit about yourself….your background, what gets you up in the morning?

Joel Martin, Vice President Cloud Strategies, HFS:  Great question Phil, thanks for asking. 

About me, well, I like to think that I am a classic overachiever. I have built a career from a humble beginning to one that has allowed me to live, work, and experience cultures and peers in Europe, Asia, Australia, and North America. I love immersing myself in a new culture, have been fortunate to lead operations, sales, and research teams across the world, and thoroughly enjoy the customers I have engaged in finding new revenue opportunities. 

I grew up in a small town in the United States, proud son of a Red Cross executive. As such, I got involved in community service from an early age, which continues to be important to me. Travel is something that I also grew up with, as early in my life, we lived in Germany and then across the U.S. 

While at university, I built a partnership between the University in Leipzig and Houston, leading to my joining an international student-led program based out of New York City. This allowed me to travel extensively in Eastern Europe in the early and mid-90s, and honestly, I haven't looked back. I started my technology career in Prague, Czech Republic, with IDC in 1997 and moved to Australia in 1999 and Toronto in 2004. Building a career in research, consulting, and practice leadership. Then I moved to Microsoft, where I was product marketing lead for the ERP business for Canada. In fact, I was part of the initial plans to move that product to the Cloud. After that, I was recruited by TechInsights, an Ottawa based Intellectual Property firm, to lead global marketing and product management. During this stint, I was part of the executive team that sold the business to a Private Equity firm and was retained to build exit strategies for different business lines. 

During this time, both the company and the business I led went through significant digital transformation, taking our products and systems to the Cloud. This was a major undertaking as we fundamentally changed our financial, operations, HR, and customer-facing tools and experiences. That was 2015-2016, hard to believe nearly 5 years have passed. 

Over the most recent 3 years, I ran workshops, managed client engagements, and wrote blueprints on building better supply chain relationships. I also supported a new program that focused on the impact of emotional connections between users that the software tools they use. Our hypothesis was that it is essential to look beyond the capabilities and features and understand what emotions drive satisfaction—a crucial component for marketing, sales, and buyer synergies. 

Now I am excited to join HfS! As you and I worked together in the early 2000s in Sydney, while our paths diverged, we've found ourselves working together again. 

As for what gets me up in the morning, I am an early riser, so after that first coffee cup, I like to explore problems with a fresh perspective. You know, before the in-box and to-do list from your boss dulls your creativity.  

You've had a very global analyst career spanning several countries and continents... can you share some of your experiences over the years... what would you do all over again, and what would you definitely avoid?

When I look back at the crazy times of hitchhiking between meetings in Eastern Europe in the 90s to negotiating with a crooked cabbie in the middle of the night on a highway in China about the fare, there are undoubtedly many memories. And many things I would AND WOULD NOT do again! 

The most important thing I always found while working abroad was being willing to listen. Not just to the customer or executive in the meeting, but to the colleagues, cabbies, and folks you meet while spending time in their country. Understanding another's views based on their experiences, society, and culture has allowed me to apply my experiences in ways that have built more successful outcomes. In my experience, we often rush into conversations with our opinions and should take more time to listen. 

So I do my best to avoid talking until asked. Instead, encourage the sharing of experiences, challenges, and opportunities. By making this investment, together, we can then build a prosperous relationship. Without doing so, it can be hard to establish the trust needed to collaborate equally and fruitfully. 

How did you end up back in research after spending time with Microsoft?  

My career's second decade was on the supply side of the market. At Microsoft and TechInsights, I succeeded in developing products, managed partner programs, and delivering on go-to-market strategies. Something I'd advised on in my first decade at IDC, but with little

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Posted in: Cloud ComputingIT Outsourcing / IT ServicesOutsourcing Heros



HFS Vision 2025 is here: The New Dawn to become a OneOffice Organization

December 07, 2020 | Phil FershtReetika FlemingMelissa O'BrienTom ReunerSaurabh GuptaElena ChristopherSarah Little

Posted in: Digital OneOffice



And here's an hour of my life I thoroughly enjoyed. I hope you to do... with Cognizant CEO Brian Humphries.

December 01, 2020 | Phil FershtSteve DunkerleySarah Little

Posted in: IT Outsourcing / IT ServicesDigital OneOfficeCloud and Business Platforms



Infosys can save the UK from Economic Fossilization. Here's how

November 30, 2020 | Phil Fersht

In today's world of constant fake news it was refreshing to get some real news that literally made me choke on my 57th microwaved frozen chicken jalfrezi of the year.  The fact that this real news emanated from the Daily Mail (the UK equivalent of the New York Post or Air India's in-flight magazine) was an indicator of how bad today's media has become.  Also, the fact that my head of marketing actually reads the Daily Mail gives me serious concerns for our 2021 marketing strategy... 

Anyway, let's get to the point.  Our Chancellor of the Exchequer (CFO for you corporate types), "Dishy" Rishi Sunak is married to the daughter one of India's IT industry's founding godfathers, none other than Akshata Murthy, daughter of Narayana Murthy, the man who created Infosys.  Like that happened and no one's noticed until someone at the Daily Mail discovered this... and they wed in 2009.

The UK is in a mess so bloody big we need to redefine "mess"

If a depression-driven Covid catastrophe wasn't bad enough, the mother country is going into a catatonic depression so bad, it may lead to an economic fossilization (that is my term for something worse than a depression) when we throw a no-deal Brexit into the mix... due end of 2020.

Anyone observing the thrilling performance of the Indian-heritage service providers this year will observe how the leaders have somehow kept the IT outsourcing industry actually growing a little bit, despite a predicted 8-10% nosedive that analysts many predicted.  And this owes a huge amount to its standout performer of 2020, Infosys, which has chugged along signing megadeals and reinforcing its commitment to the cloud at a time when enterprises are desperate for a partner to help them pivot at breakneck speed into the cloud model.

Anyway, as a disillusioned British born analyst (and global citizen) I suddenly see hope...

I have a lot more faith in these entrepreneurs from Bangalore than the current old-boys network running Her Majesty's economy into the ground.  I always knew Rishi was the only smart one in there, and now we have the evidence.

So... now good old Infosys has no choice butto bail us out as they married into... the UK!  

I am sure they will appreciate some free advice on the governance team that can drag us quickly out of our current predicament, so here's an initial strawman architecture:

UK Prime Minister:  Ravi Kumar S.  No one spins it better than old Ravi... all he has to do is bulldoze our media with pics of his new baby girl all over twitter and have us guessing forever on the mysterious "S"...

Chancellor:  Pravin "UB" Rao... this man can keep a ship sailing through any storm.  This current crisis stuff is child's play compared to rogue CEO's in private jets and dodgy Israeli automation purchases..

Head of the UK Coronavirus Task Force:  Vishal Sikka... time to dust off the former CEO to convince the UK public that we needn't worry about Covid as "AI will provide the answer" (after showing up 30 minutes late to every briefing).

Brexit Secretary:  Salil Parekh... who better to carve us out of the EU than the king of the carve-out deal himself?  He'll even do the deal on the golfcourse showing the rest of Europe how it's done.

Head of Cybercrime:  Mohit Joshi... who better to arm our cyber-defenses than the man who can iron-wall any bank still running on Cobol mainframes?  Easy, just move all our sensitive data onto Finacle and the Russians and Chinese will go crazy trying to figure out what the hell we just did...

Vaccine Distribution Czar:  Radhakrishnan "Radha" Anantha... who better to command the British vaccination process than InfosysBPM kingpin Radha himself, who will ensure everyone needs to "calm down and just focus on the outcomes".  If things get a bit dicey, he will take questions from his kitchen where we'll be far more interested in what on earth his kids are sneaking out of the fridge while he's too busy talking to us...

But what about Rishi himself?

Oh, he's far too smart for us.  Can't you get him to take over from that Modi guy?  Rishi makes money appear from magic, you know?

Posted in: Outsourcing HerosPolicy and Regulations



The Agile Gabriel calls the leaders who'll take you into the Cloud faster

November 17, 2020 | Phil FershtMartin Gabriel

Today's environment is based on rapid decisions to move processes and apps into the cloud as fast as possible to keep companies functioning in a remote-working economy.  That means it's all-hands-on-deck to use all available resources to make this happen as cost-effectively as possible.  The principles of agile development have never been as important.

Cloud computing is basically the Internet being used as the system for delivering processes, software, data, and other services.  Being ‘agile’ means being able to use all resources as and when required. It also means not having to use them when not being used, and not pay for them. So how can we expect today's service providers adopt agile development to help our enterprises make the leap to the cloud as effectively and rapidly as they can? Let's ask HFS analyst Martin Gabriel who led the recent Top 10 report in Agile Development Services:

(Click to Enlarge)

(Click to Enlarge)

Martin - why has agile become so talked about in the recent past?  Hasn’t this been around for ages?

Yes, that is very much true. In a nutshell, due to the following reasons, it took center stage – a) Because of the agile success rate in software development space, and b) the traction in organizational agility. It has proved that agile methodology enhances productivity and alpha,

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Posted in: Cloud ComputingIT Outsourcing / IT ServicesDigital OneOffice



So what's coming coming next folks? Stay tuned right here as the fogs clears for the New Dawn...

November 14, 2020 | Phil Fersht

Posted in: Digital OneOffice



Chatting to Vinnie Mirchandani on how the IT and business services industry has coped with a pandemic

November 09, 2020 | Phil Fersht

One of my oldest blogging sparring partners is the gnostic Vinnie Mirchandani of Deal Architect fame.  We caught up a few days ago to talk about the impact of Covid on the services and outsourcing industry, how to lead through these challenging times, and how to embrace the faster, cheaper, more competitive tenets of digital to exploit these market conditions:

Posted in: Business Process Outsourcing (BPO)IT Outsourcing / IT Services



Meet Sudhir Singh... the Coforge King

October 19, 2020 | Phil FershtSarah LittleSia Ravari

Watching the rise of the mid-tier services providers - especially in the midst of a pandemic - has been nothing short of impressive.  Firms that got written off a few years ago because "only the top tier only got to the table"... are now at that table.  In fact, I could name several who broke protocol to become sought after partners with reputations for going way above the standard service and regular win engagements against the juggernauts.  Just read our post about the surge in growth for mid-tier IT service providers.

With 50% growth in the last three years, Coforge – formerly known as NIIT Technologies – is no exception here. In the midst of a $600M platform and (in spite of) a global pandemic, they hit the refresh button with a new name that aligned with their identity.  Changing one's name is a brave move, but when your British clients have called you "Nit" for a couple of decades and you have a supercool CEO who plays field hockey and racketball, you just gotta do it...

Within 3 years, CEO Sudhir Singh has led Coforge has taken this firm well past the $500m barrier, so let's get the story behind the strategy, the rebrand, and how the Coforge King sees the industry unraveling...

Phil Fersht, CEO and Chief Analyst, HFS Research: Thank you Sudhir for taking the time today to speak with us. You have recently gone through a rebranding and I would like to find out why Coforge and you decided on a name change, particularly in these economically uncertain times. And a little bit about how you have fared since you have taken over the role... 

Sudhir Singh, CEO and Executive Director, Coforge: Very good to be speaking with you Phil. We spoke about the name change around February when we met in Mumbai. This was an exercise that we were very excited about because all of us had this gut feeling that we are not going to be getting too many opportunities in our careers to rename a $600 million platform. This was a

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Posted in: IT Outsourcing / IT ServicesOutsourcing Heros



After Groundhog Day... what happens next?

October 18, 2020 | Phil Fersht
When the fog clears in the coming weeks, we're faced with rebuilding workforces, rethinking failed political ideals,  revamping education and healthcare systems,  re-energizing ourselves, our families, our attitudes towards diversity, our own health, how we work… and so much more.  While we are all weary of living a real-life Groundhog Day, we have to stay focused, motivated, healthy and prepared to be ready for a new era that is approaching.   Surely this will represent the biggest reset in modern history.
There is no place to hide anymore. We are the dawn of a Hyperconnected Economy with the advent of connected global talent and the infinite possibilities of processes and data running in the cloud. The HFS 2025 Vision represents the north star for bold enterprises who want to design their organizations to thrive in this new era and not meet a painful, boring, and irrelevant death.

Watch the replay of this HFS Live purely unfiltered, unsponsored real talk with real industry leaders to help us unravel the emerging landscape:
Phil Fersht, CEO and Chief Analyst, HFS
Traci Gusher, Leader AI and Enterprise Innovation KPMG
Chirag Mehta, Product Leader Google Cloud
Jesus Mantas, Chief Strategy Officer GBS, IBM
Malcolm Frank, President of Digital Business, Cognizant
Mike Small, CEO Americas,Sitel

Posted in: Cloud ComputingDigital OneOffice



There is nowhere to hide in the Pandemic Economy

September 20, 2020 | Phil Fersht

Posted in: None



As the industry churns Tom Reuner returns

September 13, 2020 | Phil Fersht

There aren't many more exciting professions to be in these days than the analyst industry... you're right at the heart of all the key industry stakeholders absorbing a level of disruption, volatility and confusion we'll likely never experience again (we hope).  When everyone is stuck at home fretting about their futures, what better to do than talk to analysts plying their trade unraveling the current scenarios?

As an analyst firm, we need analysts who thrive in this scenario, with the experience and foresight to help us define our Vision2025, who understand this technology convergence of the hybrid cloud and containerization with data and digital technologies, all made possible by automation, AI, digital workers and - most importantly - people.  So when my old friend, colleague, and fellow Tottenham sufferer Dr Thomas Reuner agreed to return to the HFS family after a two-year sojourn in the AI software world, we knew we had the right person to lead our tech services vision...

Tom - so why did you choose to come back to the analyst community?  What really makes you get up in the morning?

Funny that you ask that, Phil. I am definitely not a morning person. If anything, I am intolerable in the morning, just ask my long-suffering lovely wife. On a more serious note, what drives me (professionally) is to understand technology evolution and how it helps organizations to advance their delivery of services. I get a real kick when I see in meetings and projects that I can help clients to better understand the dynamics of the market and achieve their strategic objectives. Working with the brilliant folks at arago has helped me to gain a more nuanced understanding of all the issues around AI, but also to appreciate more the many challenges and opportunities that innovative startups face. As such, I hope I have gleaned a much more rounded view of the industry. But deep down I always had an inkling that I would return to the analyst fold at some point. When you guys came knocking at my door that point came perhaps earlier than I expected, but being an analyst has always been my passion, so I didn’t have to think too long to make up my mind.

It must have been quite the experience working for an AI software provider during the hype-overload phase and then to experience the sobering reality of COVID where the rules of the game went out of the window.  Can you share what you learned from it all?

arago is a unique organization, both in terms of a highly differentiated technology but equally culturally. Working with one of the best development teams in AI has given me a much better comprehension of where the development of AI is really at. Not surprisingly, there is a fascinating life beyond just Machine Learning and Chatbots. However, on the negative flipside, being at the cusp of innovation that can’t be squeezed into pigeonholes provides significant challenges in engaging with the broader market. All too often we were asked “how are you different from RPA?”, “how are you different from Machine Learning?” And even where we made progress in discussions, we often got “show us the magic” as if the automation platform was a smartphone that can transform processes in a similar way to manipulating pictures.

The sobering reality of COVID was intriguing in many respects. On the one hand, the notion of a Digital Workforce took on a completely new quality as companies never really envisaged that employees literally couldn’t get to work. Thus, arago’s end-to-end automation became a have-to-have as you tend to call it. On the other hand, arago was at the forefront of providing a technology solution to trace COVID that would be interoperable between many countries. It was a rollercoaster ride starting with a groundswell of positivity as everybody wanted to engage with us but culminating in informal pressures and fickle politicians derailing much of the brilliant work my colleagues had done. I suppose much had to do with the various COVID apps being seen as a key to getting access to healthcare systems and consequently contracts. What saddened me about this journey is that the arago team worked pro bono on all of this and our CEO Chris Boos worked tirelessly day and night trying to get the project off the ground while engaging with the public about the implications and merits of the approach. To witness the headwinds and some of the public discussions on all of this makes one only more cynical. If anything, the experience has reinforced for me the importance of not losing sight of informal dynamics when analyzing the industry.

So where next for intelligent automation?  Will we see the phoenix rising from the ashes?  We talk a lot about the "have-to-have" economy at HFS... how much of this is really a have-to-have? 

I have fond memories of the early days of Intelligent Automation. It was a small community and we all had no clear idea of where the development would be heading. At least for me, the context was always about how do we progress to end-to-end automation and how can we decouple routine services delivery from labor arbitrage. To help clients on their digital journey, collapsing the many siloes was top of the agenda. Yet, the current hype around RPA appears to be confining the goals more and more to task automation and employee productivity. And in my view, the discussions on “Hyperautomation” are not helping either because they are re-enforcing an RPA-centric view of the world.

Therefore, we should re-focus the discussions back to the outcomes we had in mind at the outset, take a more holistic view and focus on how we finally can scale deployments. If we succeed with that you could argue we would see a phoenix rising from the ashes, but I am not holding my breath. The breath-taking valuations for some of the RPA providers are masking many of those discussions. At the same time, the blurriness as to what constitutes AI is adding to the confusion.

As with the discussion on COVID, Intelligent Automation and a Digital Workforce should be have-to-haves to guarantee business continuity in these pandemic times where organizations have to plan for the unknown. But talking to clients they increasingly realize the limitations of RPA and that we need new approaches to really succeed with a Digital Workforce. It is here where I see HFS continuing to be the leading authority of guiding the market.

And how much will enterprises depend on services to make their have-to-haves happen for them?  As you scope your research agenda across the tech services domain what areas are you going to cover that will help HFS clients and readers?

You always give me the easy tasks (laughs). Services remain, or more precisely, build the cornerstone in most organizations as they are accelerating the journey towards the OneOffice (or call it truly digital organizations) and are trying to find ways to survive these pandemics times. But crucially, success is about the outcome, not the technology itself. As such, the research agenda will be aligned with the various HFS frameworks, the OneOffice being the most relevant one. With that in mind, it is about how best to orchestrate and configure cloud offerings as the market is shifting from multi-cloud to hybrid-cloud. Crucially, this includes change agents such as RPA and AI as legacy environments have to work together with all those innovations. As we are touching on the change agents, of course, Intelligent Automation and AI will remain close to my heart, but I hope I will bring new insights to the discussions having benefitted from working with the brilliant folks at arago. In the context of applications, we are likely to expand our coverage on distributed agile. What are the best practices to make it work in complex engagements, including outsourced engagements? Similarly, looking at our coverage on testing, I could imagine focussing more on the testing of innovation, especially around the big change agents. I hope you can see, Phil, that this is more about aligning our research to our sweet spots rather than reinventing the wheel. But as I have the privilege of working with a hugely talented team, I am sure we will be able to move the goalposts at least a bit.

Now you're officially an analyst veteran (hehe), what do you see next for the analyst industry?  Are we still going to get the same old vendor grids and turgid vendor-driven messaging, or will we finally see a change in how the industry consumes research and engages with analysts? 

Thanks for reminding me that time is flying, Phil. If I am honest, I am seeing at best a marginal change in how the industry deals with the wondrous world of analysts. Too many AR folks spend the majority of their time dealing with Magic Quadrants, notwithstanding any other grids or activities. We have seen more consolidation of analyst firms, yet we haven’t really seen new firms with new ideas breaking through. There are many wonderful analysts out there, but if you look at the industry, I would argue it has gone a tad stale. Smart AR folks reacting to that by working more with individual analysts. Take some stalwarts like Gurvinder Sahni at Wipro, he is building deep relationships but then orchestrates those relationships according to his requirements. And if I take my experience on the vendor side, which represented more innovative startups, I was struggling to get relevant advice. The guidance was often templated and you were encouraged to engage with ten other analysts to glean relevant insights. My “favorite” piece of advice, was: “Tom, you have to reinvent RPA for your space”. But I would love to see new firms emerging as this is the most challenging but also the most intriguing time to be an analyst.

And finally, Tom, what will you do to set your own research apart as we venture into this murky future ahead?

To be honest, the quality of my research will always be in the eye of the beholder. But I would hope by leveraging HFS’s vast network of buy-side organizations and by continuing to build deep relationships with stakeholders, I can provide value to my clients. It was always the collaboration with some of those outstanding industry veterans that has helped to shape frameworks like the Intelligent Automation Continuum. Folks like Boris Krumrey at UiPath and Wayne McQuoid at Credit Suisse are top of the tree. By exchanging ideas, challenges, and working together on projects, the most relevant research pieces have come up. You keep challenging me to revamp the Continuum and revamp our IT Services research. To do that I really look forward to engaging with many of the brilliant folks in our network!!

Well it's terrific to have you back in the HFS family Tom and looking forward to hearing your new ideas

Posted in: IT Outsourcing / IT ServicesDigital OneOfficeIT Infrastructure



My five learnings leading a company through a pandemic: Just be human, be smart and you’ll find your way

September 06, 2020 | Phil Fersht

Having founded a successful analyst firm 10 years ago, nothing seemed to derail us from continuous growth… every obstacle could seemingly be overcome by throwing smart people at it or investing time with your clients.  Net net – if you were good at what you did and had some smart people who believed in what you were doing and saw your value, you would always find a way.  You were always a safe bet, a sure thing, something to invest in for the future. 

You could ride out prosperous times and tough times because you influenced sales cycles and validated multi-million (even billion) dollar decisions. Whatever was going on in the world, you thrived off the one thing that kept the wheels on everything:  certainty.  Enterprise leaders, investors, politicians alike all banked on one thing – they had a reassuring view of the future, of where things were heading.  They could always make decisions to keep pushing in the right direction.

We’ve been given the worst corporate disease possible:  Uncertainty

Then along came something no one accounted for which caused the one thing that can destroy the status quo:  uncertainty.  Suddenly everyone is unfamiliar and uncomfortable with their environment – their certainty has dissipated and the rules for conducting business have gone out of the window.  Unless your business is something they have-to-have you may find yourself out in the cold so quickly by the time you realized your perilous position, it may already be too late.

And the scariest part of all this is the immediacy of your potential demise.  If you’re not Zoom, Microsoft, Amazon, Nintendo, Instacart or Occado - who have immediate opportunity to exploit the situation – your whole business model is immediately wracked in uncertainty.  Whoever you may be.  How do you sell the same stuff when you can’t meet your clients, when many your key staff are surely too busy home-schooling their kids to commit to extra work, when your clients’ bosses are suddenly demanding things form your clients that don’t include your products or services?  What do you do if you are suddenly deemed irrelevant?  

As much as pandemics suck (yes, they really bloody do!) they give you a once-in-an-era chance to make changes you never thought possible, or never even realized you needed to make.

Five things I have learned about leading in these times:

  1. Moving everything to digital is not some crazy expensive investment – it’s the best thing you’ll ever do to your business. Seriously, can we please stop this bullshit that “digital transformation” is some insanely expensive cost that is just too much for your firm to handle. Shifting your core products and services to digital results in them being cheaper to deliver, cheaper for your clients, more efficient, faster and give you much, much better data to make better decisions.  If you can’t move some of your services to digital, then they were probably ready for the analog scrap-heap in any case.
  2. Choose your team you need to take with you on this journey – and do it fast.  This is where it gets hard, but deep down you know what you have to do.  This is probably the only rare time you can make painful – and sometimes unpopular - decisions to shape your business around your digital present and future.  Now you can make decisions and take actions that could have resulted in a rebellion pre-March 2020.  Just make the changes and move on fast, you just gotta do it - and be honest about them.  Sure, they’ll probably paint you as one huge asshole and write something about your “toxicity” on Glassdoor, but you know you made a painful - but professional - decision – and so did they deep down. 
  3. Invest in trust with your chosen team. The old rules about managing people are all over the place.  Once you have decided who you need and who you want, this is the motley crew that is going to get you through this.  So don’t just select the people you know you have-to-have, select those who will be up at 3.00 am with you thrashing out proposals and executing for your clients, listening to your quasi-insanity as your turn over every damned stone to keep the wheels on into 2021… Just make sure you have people who know what they have to do, who you trust, who trust you, who are on this road to somewhere with you.  This means you will need to share a level of transparency with them which made you uncomfortable in the past.  This means the old metrics need to be sacrificed for a simple “we just need to get this shit done”.  That’s what real trust is all about.
  4. Family comes first, business second. Then business wins.  These times will define you forever as a leader. This isn’t about being nice, or kind, or even generous – this is about being human.  If anything good came out of 2020, it’s the value of our families around us as stabilizing forces and responsibilities. We may be breadwinners, but we are also mothers, fathers, daughters, sons, sisters, and brothers.  We have to make every possible accommodation for our fellow workers to look after aging parents, home-school their kids, support their spouses, etc.  Clients can wait an extra day or two if they need to – they have similar pressures and will understand.  The old 9.00-5.00 is pretty much gone for now… so trust your team to prioritize family needs and find the time later to finalize their critical work.  We all find the time when we are committed, when we feel trusted, when we feel good our family is finding their way through this with us.
  5. Manage extreme emotions with humility and forgiveness. If you are not flying off the handle in this environment on the odd bad day, you are definitely not human.  We are all mentally drained, we are all operating at the edges of our tolerance, and emotions are frequently being stoked.  But that’s not all bad – we get to see the human side of each other a lot more than we ever expected. And arguments are not always bad if we resolve them – that what families do, and that’s what colleagues can do too… just be cognizant that people are human and we’re just seeing everyone function with less of the emotional filters on. I guarantee when this is all over you will have better and closer working relationships than you ever thought possible.

Bottom line:  Staying relevant means staying energized, staying committed, and being damned smart.  And being very human.

Roll on 2021 when we slowly pick up the pieces of 2019 and before, coupled with the experiences of 2020 which changed the world ever (and are still not over).  There are new rules for almost everything: how we treat our clients, our staff… and most importantly our families. And there are other changes emerging we have to figure out, such as how we shape our approach to politics, to endemic racism, to inclusion and diversity, to climate change.  My main hope is we are just more human, more pragmatic, more tolerant, and more transparent as our future unravels around us… there is already enough for our aching brains to handle. 

Peace out =)

Posted in: HR Strategy