The Outsourcing Blog: Horses for Sources

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

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, ACS, HP and IBM, with tales of Six Sigma excellence and Virtual Captives; dazzling firms such as Kimberly-Clark,

Wachovia and Cadbury Schweppes in the process. And when he’s not absorbed with cricket statistics

Facebook: the twenty-to-one rule

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 you can view their contacts too.

And if you find my status updates irritating, then turn off my updates, or de-friend me.  I don't want you... if you don't want me.  For every 20 great interactions I have, one person may get annoyed, or I may get annoyed by someone else.  That person can then remove my updates, of I can remove theirs', so that ratio now moves to thirty-to-one, and so on.  Yes, Facebook

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

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 pace of technology adoption, organizations need new enterprise strategies to cope with the massive forces of change they face".

I also asked Ray if he'd say exactly the same thing after a few shots of tequila... This ecosystem development of today's influencers and thought-leaders is the culmination of the impact social media has had on the technology industry.  People want immediate relevant, impactful advice and information - and from people whose opinion they trust.  The question now is how consulting and advisory firms can make money providing it, and where today's decision-makers go to be "influenced".  Interesting times... let's keep the discussion rolling.

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

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 this all possible.

Here's the whole story of the Great Recession and it's impact on the global sourcing industry (in chronological order):

So who's peddling "influence" these days?

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 my calendar is booked solid until well beyond Labor Day with client meetings (but I promised my wife to keep my ego in check, so will not venture further with my little dig here...).  I haven't even heard of these "top 3" guys... but they seem to be "influencing" far more than I seem to be.  Maybe I need to get myself double-booked next time?

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

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 - they are clinging to their knowledge of the past and are not re-adjusting their perspective to the present.  I'd be surprised if we ever see

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

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 results have increased 10% over 2008, expects Q3 to perform well, and is encouraged by strong IT outsourcing activity, with on-plan BPO advisory business. Another rival, Alsbridge, added: “First half revenues are up 40% on a 1st half ‘08 to 1st half ‘09 comparison. Across the board, we see good demand

Proof that you can stabilize your operations eventually...

Introducing new-age BPO: the standardization/personalization balance

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, which we can put into the following three categories:

1) Straight Lift and Shift:  the antiquated form of BPO where client takes "as-is" processes, hands them off to a provider, which subsequently attempts to run with lower staff costs.  In many cases it's a simple "re-badge" of existing personnel, with the provider simply employing smaller numbers of the existing delivery team to make a profit on the deal.  In most modern cases, the provider will supplement onshore staff with offshore.  There is little (or no) enhancement of software applications to standardize workflows and add a modicum of transformation into the engagement.

Likely outcome:  Inefficiencies with processes are magnified considerably, change-orders and procedural changes are cumbersome and expensive, client finds it challenging to reduce onshore headcount, and anticipated cost-reduction is not reached.

2) Lift, Shift and Transform:  Same as Lift and Shift, but the client and service provider work together to re-map existing processes onto a pre-defined new set of processes. 

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

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 excellent no-sales-hype conference sessions, the largest show floor of 250 exhibitors, and Bill Kutik’s signature vendor Shootout session, which this year features software giants SAP and Lawson taking on their smaller rivals Salary.com and Plateau.  I am also assured that the word "Cloud" is to be officially banned from the festivities...

Here’s how you can get the $470 discount off the $1,645 regular registration rate:

Type FERSHT in the Promotion Code box in the online registration at www.HRTechnologyConference.com

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

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 working for a firm with that attitude, or knows someone who is.  Smart executives sense stagnation, and a lot of top talent is re-thinking whether their current employer has what it takes to prosper in a post-recessionary economy.  (P.S. a prize is available for the first person to reveal this icon of executive innovation from the '80s...).

And the top tier isn't always offering the most appealing place to work in this market - am seeing several top executives broadening their horizons for unique companies geared for growth in this new economy.  Start-ups and small companies, for example, which are plugged into the new economy are becoming vogue.  Many people are realizing that no job is particularly secure anymore, so if you're going to take a risk, why not now?