The Outsourcing Blog: Horses for Sources

Complete our survey. Now

2009-11-25T14:29:27-05:00

Before you tuck into your Thanksgiving turkey and guzzle a gallon of bad quality Chardonnay, please take 10 minutes to complete our industry-wide study entitled "The New Normal in Outsourcing Delivery". And if you're in Asia or Europe, currently giving thanks for US declaring itself independent from everyone else, this includes you too. Anyhow, we are actively seeking the collective opinions and experiences of services customers, providers, and advisors and need 10 minutes of your time to complete this quick survey, designed especially for the patience-challenged, attention-deficit-inclined executive. Simply click on the following link): Click here to complete our survey...

Can IT overcome its credibility crisis?

2009-11-21T16:13:55-05:00

There's little doubt about what's been providing the rocket-fuel behind the rebounding services business: IT outsourcing. Simply put, there are plenty of eager providers to choose between, they have access to most of the technical skills companies need, and their rates are far cheaper than retaining or hiring staff inhouse. Some are also getting pretty handy at becoming consultative business partners, and not simply low-cost body shops. Our recent study tells the real story - 50% of enterprises are either kick-starting, or scaling-up, their ITO right now. "So tell us something new", I hear you groan into your laptop screen......

Xerox-ACS: Cloud Services Potential, or Dinosaurs Huddling Together for Warmth?

2009-11-18T14:28:03-05:00

Our recent discussion on Xerox's acquisition of ACS certainly served up some meaty discussion, and even got picked up by CIO.com, among other media. My dear friend, and former colleague at AMR Research, Dana Stiffler(pictured), recently sent us in some of her views on the merger. Dana actually got promoted today to VP and Head of Research for AMR's services research, where she will be offering clients "cashable benefits, or your money back" with her group's output. Anyhow, thought this a good time to showcase her talent... Over to you, Dana: Xerox-ACS: Cloud Services Potential, or Dinosaurs Huddling Together for...

Eulogizing on the Eurozone with Principal Euan

2009-11-13T15:11:04-05:00

Attend any European analyst meeting and there’s one character guaranteed to be propping up the bar. Scratch that, there are normally about 50 analysts propping up the bar. But in the midst of the throng you will undoubtedly find the stolid Euan Davis of Forrester Research. I recall a conversation with Euan back in '95 when I told him “you should give this analyst lark a try” (If you want to know what he working on in those days, drop me a note…). Anyhow, the story began from there, with Euan rising through the ranks at IDC’s European operation, making...

The "new normal" in the outsourcing delivery business

2009-11-07T13:17:26-05:00

This truly has been a pivotal quarter for the outsourcing business. As we've discussed several times here, many services contract decisions have been delayed during the economic crisis while organizations worked out the best course of action to get through the downturn. In Q3 we've started to see definitive action, with many service providers meeting, and some even beating, Wall St. expectations. But while some providers are clearly delivering, others are struggling to compete in this "new normal". So what is this "new normal"? Operational service provision is commoditizing and leveling the playing field. Coming out of the recession, there...

Taking a walk on the Wacki side...

2009-11-04T09:00:44-05:00

If there’s one person who’s been a consistent figure closely tied to the development of Finance and Accounting sourcing over the last decade, it’s Paul Nowacki (or to those of us know him, simply “Wacki”), who today leads F&A transformation for leading sourcing strategy and implementation consultancy, Everest Group. Paul’s advised on several of the largest engagements in the business (in fact, I do think he’s worked on the largest) and taught me a lot about the space when I worked with him at Everest a few years’ back. Never afraid to speak his mind, Paul is always a popular...

Reminder: stop and smell the roses

2009-11-02T13:00:20-05:00

Sometimes life becomes a converged morass of email, reading, writing, number-crunching, slideware-designing, talking, selling, firefighting, and so on - and more so these days than ever. Noone has time anymore to have a quick chat about anything non-important, read an interesting article (or more than 140 characters), have a cup of coffee with a friend, take a walk, read a good book... My long-suffering wife keeps reminding me to take a deep breath, take a walk, and "smell the roses" - just thought I'd pass on her advice... An Autumnal Sunday afternoon in Boston's Public Gardens

Randomly shout into the darkness and hope someone's listening

2009-10-31T13:27:38-04:00

"None of you have any friends"... this little clip about that social networking tool we know and love just cracked me up -:)

Sitting on a shrinking business and afraid to change

2009-10-28T09:37:47-04:00

"Most of our managers are happy sitting on a shrinking business" bemoaned a senior executive the other day. Sound familiar? I hate to say this, but too many senior executives I talk to these days adopted this survival mechanism during the economic crisis, and are clearly struggling to change their mind-set now it's clear that armageddon has been averted. And the main reason seems to be that the last year has exhausted them, preventing fresh, bold decisions to be made. Hey - it's exhausted everyone. Smart business leaders are now trying to re-energize their staff, take that deep-set panic out...

So where next for the Galloping Hooves?

2009-10-24T11:53:30-04:00

"You are going to keep doing that blog aren't you?" seems to have been the most frequently-asked question I've had since I changed my day-job. And a few people have asked whether I can still credibly run this blog, now I work for one of the firms actually tasked with delivering the services we have been talking about for the best part of three years. Heaven forbid. As we have discussed at length, blogs and other social media have been a major game-changer with how we engage with issues, market dynamics - and each other. We live in a different...

Why you sometimes may need to fine-tune your innovation plans...

2009-10-24T08:19:29-04:00

Efstathiou uncut: all aboard with the sourcing skipper

2009-10-18T15:21:12-04:00

When I returned to these Western shores 6 years' ago, I was given the the unenviable task of working with the indomitable Andy Efstathiou. Now, analysts who have spent 20 years working in commercial banks are not to be messed with - and I quickly learned my lesson with Andy, who (literally) has an encyclopedic knowledge and perspective of everything that has gone wrong with the world. I recall Andy warning us years' ago that this was all going to go horribly wrong... and did anyone listen? Andy has since become a good friend over the years, and has always...

Why I joined Cognizant

2009-10-14T19:35:00-04:00

Folks - Having spent 14 years on the analyst and advisory side of the sourcing industry, it's a natural move for me to join a service provider - for both professional and personal reasons. Having considered several options (and some of them were truly awesome... you know you are), I decided to make the service provider move, and chose Cognizant. To keep this brief, and avoid a completely blatant sales-pitch, here were my reasons: They're in high-growth mode They have a truly dynamic culture and offer something unique to their clients, in terms of value and energy (customers rarely lie...)...

Business and friendship: it's all about professional respect

2009-10-11T14:02:12-04:00

You can't understate the importance of relationships in business - especially sourcing, where it's all about cultural fit and working relationships. In business, it's not always about liking people, it's about being able to trust - and work - with them. Sometimes, you will actually grow to like someone, in addition to trusting them and working well with them - and that is special; but let's face it, it's quite rare. In many cases, people you like are not always people you're going to work well with - and vice-versa. You may not have any affinity or liking for someone...

Consulting the Oracle: Tibor's talktrack (Part II)

2009-10-08T08:26:58-04:00

In the second-part of this two-part interview, Oracle's Tibor Beles discusses how service providers can be successful at platform-BPO offerings, how the broader BPO industry can improve, in addition to discussing the shifting dynamics with software licensing models. Tibor is also a blackbelt in martial arts (not the Six Sigma category), but spends more time hitting tennis balls these days with his teenage daughter. He also loves political thrillers, but he didn't elaborate whether that was through his day-job, or reading Le Carré novels -:) Phil Fersht (PF): Do you see platform-based BPO as a major threat to the BPO...

Consulting the Oracle: Tibor's talktrack (Part I)

2009-10-06T19:40:44-04:00

We've had a number of discussions with some of the SAP executives over the last few years regarding its highly-publicized BPO partner-program. Meanwhile, there's been a crack Oracle team quietly working on developing its own BPO strategy, led by its enigmatic commander Tibor Beles. After being been educated on the nuances of Hungarian beer in a Budapest bar recently, I decided it was time to drag Tibor away from his Karate sessions to talk about his team's progress... Phil Fersht (PF): Tibor, why does Oracle have a group dedicated to BPO? What's the game-plan here? Tibor Beles (TB): Our customers...

Insecurity is the modern corporate disease

2009-10-03T11:50:57-04:00

In 1597, Sir Francis Bacon coined the famous phrase "Knowledge is Power". While knowledge does create power to the beholder of that knowledge, it can rarely be harnessed effectively until is it shared with other entities. In today's business world, I'd broaden that phrase to "Sharing Knowledge Creates Value". Let me explain my thinking here. Too many employees today have a tendency to hoard their nuggets of knowledge, for fear of fear that giving them away will weaken their value and, ultimately, their job security. This can sometime be as rudimentary as documenting a business process, through to sharing knowledge...

Stop Press: meaningful use of Twitter discovered

2009-10-02T00:19:00-04:00

Just as I was about to close down my Twitter account, I discovered a perfect use for the tool:

Bittersweet

2009-09-30T16:38:23-04:00

As many of you close to me already know, after 14 years in the analyst and management consulting community, I am going to take a little break and make a few changes. I'd like to thank publicly AMR Research for a wonderful couple of years, where I got to spar with some great people, service more clients that I care to remember, and have a lot of fun bantering with so many of you who frequent the Horses. I'd especially like to mention some great analysts with whom I'd had the pleasure of working: Dana Stiffler, John Hagerty, Simon Jacobson,...

Xerox copies Dell's example and acquires ACS, but again, where's the fit?

2009-09-28T08:54:20-04:00

Is there a recurring theme here? US-based giants with faltering commodity business models from yesteryear, making very late plays to get into the IT-BPO services business? While I could see some synergies between Dell and Perot, this one's even tougher to fathom, unless Xerox has further plans to marry ACS with a stellar IT services acquisition. ACS was one of the early darlings of BPO, and was right at the top of the competitive tree in the early 2000's whenever a large Finance & Accounting, HR or call center deal was up for grabs. It would always give Accenture and...

Forget Platform BPO, it's really about the Business Services Cloud (Part II)

2009-09-27T12:07:51-04:00

We inspired a lot of offline debate when we discussed the challenges facing BPO providers delivering so-called "Platform BPO" solutions. Bottom-line, if BPO service providers are competing for commodity services engagements which are underpinned by software platforms that are widely deployed by several other service providers, they face a major challenge of differentiating themselves to win new clients and avoid a price-war for new business. At the enterprise level, selecting a BPO provider to process transactional business services for a major Oracle or SAP-based engagement is dependent on the providers' global scale, brand and competency. For these large-scale transactional BPO...

Swine Flu can impact your service levels

2009-09-24T08:21:01-04:00

If you wake up looking like this... Don't go to work!

Scale the peaks of FAO... in Tampa

2009-09-22T10:43:54-04:00

As a wise man once told me, "there's nothing quite like visiting Tampa in late October". Many years on, his prophecy is coming true, with the second annual North American "FAO Summit", being held in the Saddlebrook resort, 20-22nd October. Anyhow, come and meet a compeling line-up of speakers, panelists, hobnobbers and politicians that include several outsourcing PMOs (for some strange reason they managed to attract several from beverage producers...), former senator John Sununu (one of the five panel members responsible for the oversight of TARP funds), a bunch of advisors, service providers and some crazed blogger. As usual, a...

The Dell finally tolls - but is this the right fit?

2009-09-21T08:17:38-04:00

So Dell finally made its major play into the IT services enterprise arena announcing a $3.9bn deal for the Texas-based Perot Systems. Unlike the HP/EDS mega-merger of last year, there is a lot less overlap between the merging entities, however, you have to assume this is more of a play by Dell to transform its commodity hardware business by refocusing its future strategy on services-led engagements. However, while there isn't much overlap, there also isn't a lot of synergy. Why should Perot customers want to buy Dell equipment all of a sudden? Most CIOs today are looking to move away...

The art of blog: credibility is in the eye of the beholder

2009-09-18T19:21:13-04:00

Mark Stelzner roused some passions last week with a great blog post discussing how some traditional media are highlighting the need to regulate bloggers with possible "conflicts of interest". For example, Workforce Magazine's online article discusses the impact of controversial HR bloggers, such as Cheezhead's Joel Cheesman. At the heart of the debate are the issues surrounding which industry entities are more credible for regaling information to the marketplace. My take is that everyone has potential conflicts of interest, and blogging has leveled the playing field across industry entities (journalists, consultants, analysts / marketeers, vendors and buyers). While, in the...

Stephanie Moore's Law

2009-09-15T20:38:11-04:00

One of the most prominent industry analysts in sourcing over the last decade-plus has been Stephanie Moore. Steph started out at Gartner, before spending time at Giga, and most recently Forrester Research, where she built an industry-wide reputation as an outspoken and respected figurehead of the IT services and outsourcing world. Earlier this year, Steph made her first venture over to the service provider side, and when she's not busy entertaining her three kids, sailing around the Westport beaches, or regaling stories of her junior golf open triumph (she swears they had color-TV back then...), Steph assumes the role of...

Derail the Healthcare gravy-train: introduce competitive multi-sourcing

2009-09-11T11:52:05-04:00

Being a relatively recent immigrant to US society, it's fascinating to observe the political games corporations and politicians play to reach their desired outcomes. What I find a little absurd is how easy it is to decipher the real political motives behind all the rhetoric; especially those ridiculous commercials sponsored by insurance companies trying to protect their monopolistic positions and keep their gravy-train chugging along. Working in the sourcing industry forces you to cut quickly through complex issues to find sensible solutions, and healthcare doesn't seem a whole lot different - despite the sheer scale of the issues and requirements....

Forget Platform BPO, it's really about the Business Services Cloud (Part I)

2009-09-09T11:07:25-04:00

The recession has upped the ante for today's BPO providers: the move to providing business services in a cloud-like model is accelerating, and the real challenge for today's service providers lies in answering the following questions: 1) Do we want to play in the BPO space? 2) How do we play in this market? What's our angle? 3) How can we compete? What's our differentiation? The challenge today is whether a provider is adding value beyond low-cost processing services. If you are only really providing an arbitrage solution, someone is going to come along and offer it for even less...

Join the world's largest social-networking sourcing community

2009-09-06T17:22:11-04:00

Yes, there is such a thing as a free lunch... Horses For Sources' official LinkedIn Group, the aptly-named "BPO and Offshoring Best Practices Forum" now has 7,000 members. This is a forum for leading sourcing practitioners to share their experiences, views, opinions, best practices and lessons learned in the worlds of IT Outsourcing, Business Process Outsourcing, Shared Services and Offshoring. You also get a free subscription to the Horses Digest. And it's FREE... SIGN UP HERE

Mixing it with the big boys: A Tea-interval with Tiger

2009-08-31T15:56:37-04:00

Not too many service providers have had a bigger impact on the world of Business Process Outsourcing in recent years than General Electric’s former offshore captive, Genpact. And much of this rapid growth to a billion dollars of revenue and a global delivery network, can be credited to one individual – the tenacious “Tiger” Tyagarajan (simply known as Tiger to anyone who knows him). And what an apt name for the wee fellow. I can recall, just a few short years’ ago, when Tiger was fronting Genpact’s US business and taking on the major incumbent BPO providers such as Accenture,...

Facebook: the twenty-to-one rule

2009-08-29T10:09:33-04:00

I just read yet another media article, this time in the WSJ, on the downsides of using social media tools such as Facebook. While the theme of this article is spot-on, it's merely journalistic negativity to bash a new way of doing things. Facebook is a great tool because you control how you use it. Yes, it's rude not to accept a friend-request from a colleague, but you can do so in a way that they will never see your updates and you can choose not to see theirs'. They are essentially becoming an addition to your contact database where...

New-age influence peddling: Ray and Jeremiah join Charlene's Angels

2009-08-27T11:25:49-04:00

After our little debate the other day about who is influencing decision-makers these days, I found Ray Wang's new career move worth mentioning... Ray's joined former Forrester Research "rock star analyst" colleagues Charlene Li, Jeremiah Owyang at consulting outfit Altimeter Group, headed by Internet pioneer Deborah Schultz. They also announced the launch of "The Hanger," a physical space intended to bring together the ecosystem of emerging technologies, thought leaders, business and service providers to innovate and bring new ideas to life. I asked Ray (pictured) this morning why he's doing this: "Because the rate of technology obsolescence now outpaces the...

The entire Great Recession of 2008-2009: Blogged for the outsourcing industry

2009-08-25T12:35:16-04:00

Wouldn't it had been something if there had been some sort of interactive journal during the Great Depression, where we could have truly experienced the emotions of the time, peoples' ideas for change, the stark contrasts between desperation and hope? It's been a geniune privelege to have hosted these emotional debates throughout the entire Great Recession of 2008-9. It's incredible how attitudes have changed over these tough months - I don't know about you, but I feel a little wiser as a result - and the great interaction I have enjoyed and observed with so many of you, has made...

So who's peddling "influence" these days?

2009-08-24T22:57:31-04:00

Prolific blogster and all-round industry pundit Vinnie Mirchandani asks whether the IIAR's definition of the analyst is outdated. He also begs the question whether my good friend Ray Wang, who has recently left research firm Forrester, will repeat his honor next year. Unless old-school PR executives get with the changing times, somehow I doubt it. Vinnie goes on to declare "seems like AR (Analyst Relations) folks want to cling to a narrow (and shrinking) definition of market influencers." I didn't even feature in the top 3 services analysts, despite the fact there are 45,000 RSS subscribers to this blog and...

The future of the sourcing industry: DNA and industry knowledge trump scale

2009-08-18T10:02:00-04:00

I spent much of last week at InsofysBPO's customer summit in Baltimore. Infy always does a good job with their events - they bring their customers together and encourage open, unstructured debate, where the good, bad and plain ugly about BPO and ITO are openly discussed. They know the best way to win business is through baring their DNA to customers and encouraging them to trust and want to work with them. They also invited some industry personalities to wax on about their vision for the future - and some predicted rampant "consolidation among suppliers". I say they are wrong...

Crash and Learn: is TPI's "quartus horribilis" reflective of the sourcing industry at large?

2009-08-12T10:41:08-04:00

There were a few alarm-bells ringing in the outsourcing industry with TPI's shaky Q2 results. As our recent buy-side survey data indicates, in addition to the multitude of service providers and consultants, outsourcing interest and uptake is on the rebound, so what should we read into TPI's 38% drop in revenues from Q2 2008? I spoke to leaders of all the key sourcing advisors to get their candid input on how their firms were faring, and whether TPI’s results are reflective of the sourcing industry in general. Rival Equaterra, which is currently privately held, reports to us that its Q2...

Proof that you can stabilize your operations eventually...

2009-08-10T09:08:09-04:00

Introducing new-age BPO: the standardization/personalization balance

2009-08-06T14:53:33-04:00

The new wave of BPO deployment has arrived quicker than many of us anticipated. The recession has driven some common-sense into a BPO value-proposition that was previously centered predominantly on some form of labor arbitrage, with many service providers muddling their way through to attempt to run their clients' process for less cost - and make some sort of profit. Sometimes they pulled it off, other times they failed. Many are currently in a state of semi-transition, with the success of their BPO engagement still hanging in the balance. Now we've clearly arrived at a turning point in BPO development,...

The Alamo comes to HR Tech... get your front row seats here

2009-08-05T18:55:26-04:00

Anyone from the world of HR, who cares about the impact technology has on their existence, is congregating at the infamous HR Technology show in Chicago on September 30-October 2, hosted by the legendary columnist Bill Kutik (pictured), the undisputed captain of HR controversy. It is the world’s leading event in the HR sector, and each year attracts 2,000+ high-level HR practitioners, software and service vendor CEOs. In addition, most of the HR sector's industry analysts, bloggers and foghorns will be there - including such celebrities as Jason Corsello, Mark Stelzner, Naomi Bloom and Vinnie Mirchandani. They come for the...

Is this a good climate to take a career "risk"? Or is it riskier staying where you are?

2009-08-02T12:18:39-04:00

My definition of corporate failure in this market: "We're gonna ride out 2009 and go for it next year." What are you going for? What are you riding out? If you want to remain successful, you better get your act together now and formulate a game plan. Too many firms are sticking to their old business models, in denial that they need to do anything different (besides firing a few people), and cling to the vein hope that their fortunes will dramatically turn around in 2010...by doing NOTHING. And I can be 100% sure that everyone reading this is either...