See you over there...
See you over there...
What's happened to the industry analyst business? You may recall a discussion right here two years ago when we berated the Chinese Internet purges and the impact they could have on the development of their own knowledge services and BPO industry. While such censorship of free opinion-sharing is depressing enough in a controlled society, it's even more alarming when it's happening right on our own doorstep, when you see analyst heavyweight Forrester Research officially banning its own analysts from having personal blogs that touch upon issues related to their research coverage or technology markets.
If you saw the recent passionate debate over at analyst relations guru Carter Lusher's Sage Circle site, you can read an official statement from Forrester's head of Corporate Communications:
"We believe we can best serve our clients in their professional roles by aggregating our intellectual property in one place – at Forrester.com. Make no mistake: Forrester is committed to social media, and the number of our analyst bloggers is increasing, not decreasing. Analysts will still have the ability to blog outside of Forrester on topics not related to their coverage areas."
Analysts will still have the ability to blog outside of Forrester on topics not related to their coverage areas? Hmmm... I really do want to know about their CRM analyst's stamp collection.
Aren't analysts supposed to create buzz?
I fondly recall the heyday of industry analyst business in the '90's, where the technology and services business thrived on innovation, on research, on unfettered opinion, where people had a vision and were unafraid to give forward-looking - and sometimes far-reaching - views regarding what was going to happen next, in a world that was being dramatically impacted by the onset of the Internet and web-enabled technologies, readily-available computing power and networking infrastructure, and steady globalization.
So it's time to drip-feed the intentions and experiences of 1055 buyers, intermediaries and vendors into the global sourcing industry.
We'll be discussing the results from our "Seeking the New Normal in Outsourcing Delivery" in full at the Global Services Conference on 28th January, but the nuances behind why - and how - companies are exploring sourcing delivery models, as we come out of a painful recession into an uncertain climate, need to be aired and discussed.
There's been a lot of talk about a "New Normal", or a "Reset Economy", that things will never be quite the same as before, however, we really need to zone-in on reality to grasp what these new dynamics really entail, in order to understand how we can address them.
To cut to the chase, most industries are in a state of profound change, where businesses are having to accomplish new levels productivity and sources of revenue simply to survive, let alone grow, in this climate. Whether you're making cars, pharmaceutical products, providing consulting services, and so forth, the chances are there's someone else in your industry vying to deliver what you do at lower cost, and potentially better quality. (Unless you're in banking, where it's business as usual...).
So the "great analyst roll-up" is in full swing, with Gartner's announcement today to acquire another competitor, this time the Burton Group, for 56 big ones. This comes hot on the heels of my former firm, AMR Research, also being acquired by Gartner. I won't go into the details of the mechanics of these mergers, as you can read exhaustive commentary, debate and analysis over at Carter Lusher's blog. However, I did want to discuss what this means to our sourcing industry.
Limited choice for alternative opinions. As most of Gartner's competitors couldn't really compete on brand, they've had to differentiate themselves to survive, and that meant finding areas of coverage that Gartner didn't do (or do well), and having analysts on staff who weren't afraid to rock the apple-cart with edgy, sometimes controversial, opinion and research. While Big G has picked up some superlative minds from its latest acquisitions, its new challenge is going to be maintaining those edgy opinions, and not having them toned down under the glossy corporate veneer of the billion-dollar brand. Whichever way you look at this scenario, we simply have to have more than two analyst voices dominating the opinion and insight of our $850 billion sourcing industry. Why?
Wouldn't it be refreshing if some outsourcing executives decided to try doing a few things differently this year? Here are some suggestions...
Stop using the word "transformation".
Start trying to be different from the rest of the pack, or at least admit it if you're not really any different (but are probably cheaper, or have a sexier brand, or something).
Stop espousing that you will bring "innovation" to a finance function when you're just lumping the invoice processing offshore.
Stop claiming you're recent infrastructure management deal was a "cloud transformation".
In fact, stop using the word "transformation".
And please stop wheeling out your only client of note as an example of "innovation" and "best practice" when:
1) You bought the deal in the first place,
2) We've heard it 20 times before, and
3) The client hates you anyway.
Stop claiming you do something, when you don't.
Stop claiming you can do something, when you can't.
Stop claiming ERP support is a "scarce expertise" that warrants a higher price-tag.
Stop copying your competitors' slideware.
Stop talking too much and actually listen.
Stop adopting other peoples' buzz phrases as your own.
Stop espousing that you will bring "transformation" to an HR function when you're just processing the payroll checks somewhere cheaper and using some limited piece of software that's only marginally better than the rubbish the client is currently using.
Start demonstrating how you actually did something unique with a client to help them be more efficient or generate more revenue.
Stop using the word "transformation".
Start being realistic.
Stop boring the living daylights out of everyone by tweeting all your press releases and thinking people actually will click on them.
And why not stop having meaningless meetings with sourcing advisors, when you're only going to talk about the same tired old deals everyone already knows about, and the client already knows who they're going to select in any case...
Hmmm... come to think of it, if everyone stuck to those, we probably wouldn't have an outsourcing industry anymore. So please ignore and carry on regardless...
Happy New Year and Rock On 2010 -:)
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...
What's different as we emerge from this crisis, is that the perceptions of IT from the other parts of the business are becoming increasingly cynical in many companies. Many companies are hiring new CIOs with the mandate to "turnover half the department, or outsource it", and IT middle-managers are being seriously questioned about the value they are adding to the business. While much of the bottom-layer of IT has already been contracted out, it's now the middle layer of IT professionals which is under threat. CIOs are under pressure to prove the value of maintaining these heavy middle-layers, or move them out of the organization. Some CIOs are already operating under the strategy of hiring a few people who "genuinely get it" to drive IT value, while outsourcing as much of the operational work as they can.
"None of you have any friends"... this little clip about that social networking tool we know and love just cracked me up -:)
"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 world today, where the rules are changing and we are constantly seeking out new and innovative ways to reach our industry. To sum up the new constant in a nutshell, credibility is in the eye of the beholder.
So here are the reasons for keeping these hooves galloping:
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
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...
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
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:
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.
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):
"A gorgeous, 8-color masterpiece which captures ever so brilliantly the three behavioral disorders propelling the continued phenomenal growth of today’s most widely-trafficked social media sites. And at the intersection of the dysfunctional forces of Narcissism, ADHD, and Stalking resides today’s fastest growing social media experiment of all- Twitter..."
When you try and quantify the impact social media is having on industry, it's actually quite alarming how dangerous this medium can be on our lives and our careers.
We discussed the impact of blog culture over a year ago, but the speed by which social media has crept into our daily activities, already dates many of the opinions expressed back then. The information world has altered radically, and this economic environment is accelerating the speed of change.
As an analyst in global services industries, my job is to get across insight and opinion to as wide an audience as possible. A couple of years' ago, if I'd produced an article or report, I'd probably send it out to about 100 people... that was the extent of the audience with which you would typically deal, and you'd rely on your firm's marketing department to disseminate press releases and media advisories to drive more eyeballs to your craft.
Horses For Sources' official LinkedIn Group, the aptly-named "BPO and Offshoring Best Practices Forum" has just passed its first anniversary, and 5,000 members.
This is a forum for leading outsourcing executives to share their experiences, views, opinions, best practices and lessons learned in the world of business process outsourcing and offshoring. You will also get a chance to participate in our forthcoming "State of the BPO Industry" online survey next month.
LinkedIn has just expanded the group's capacity to 8,000, so we can start letting more of you in... whether you want to find out the cost of a mainframe developer in Buenos Aires, chit-chat with other services-nerds, or just can't wait to find that dream job (ahem). You also get a free subscription to the Horses Digest. And it's FREE FREE FREE. Am I the most charitable person you know?
Being an analyst, you get a broad view of all the entities competing for the same service provider dollar. You also get a good perspective on how service providers can get the best bang for their marketing buck. And being a blogger, you also pick up a strong sense for the effectiveness of media outreach, but I'll save that discussion for another time.
There is no one-stop support shop for vendors to find and attract new clients, and influence the market - they need to gauge where they need to build influence, using both direct tactical measures - i.e. speaking at conferences or advertising, and indirect measures - i.e. influencing influencers or subliminal branding. The current pull-back in discretionary spending from vendor marketing budgets is seriously exposing the bloated array of firms feeding off the vendor marketing-dime, and with a lot less to go round, we're going to see some firms exit the market, some market consolidation, and others simply going out of business. We'll also see some boutiques linger around the industry because their owner has no idea what else to do, and his only costs are living and travel expenses, and maintaining a website. Desperate times call for desperate behavior and none more so than for many of those entities forging their living selling to IT services and BPO firms.
Amigos - I'm excited to announce the launch of a sister-blog to Horses for Sources : here ariseth "Think Global", with focus on global delivery strategy, BPO, supply chain and IT services trends. My firm, AMR Research (God bless 'em) has admirably tolerated the Horses for a long time now, until finally asking if I'll consider extending my verbosity to our research content, to which many of you do not gain access. I've kicked this off with complimentary access to a new research article entitled "Beware of Myopic Cost Cutting: Use Outsourcing To Be More Competitive in This Economy".
I've always used the Horses platform as an outlet to knock around views, cultivate ideas and take the industry temperature. So many of you have been part of that. And, while we might not always have been 100% accurate, we've collectively generated so many gems of insight that I frequently read our commentary to add some color to what I am thinking - and I know many of you do the same.
The power of the blogsphere is truly extending to the analyst world. And while some of the other analyst firms have pushed their blog strategies for a while now, I am (for once) going to brag that none of them have come close to cracking the blogging code. Over here we have, and it's time to take it mainstream.
Horses will not be going away, but will run in tandem with Think Global. I hope you take a little time to pay a visit.
The BPO and Offshoring Best Practises Forum was set up a few months' ago on LinkedIn to allow senior executives in the sourcing industry to share views, news, best practices, discuss current industry issues and network. We already have close to 3000 members active in this group.
Jason Averbrook on HR and technology: the core theme is about how HR needs to reach outside of the organization to drive performance inside. And technology and social networking tools arethe enabler to make this happen. Here are some of the sound-bites:
"What we thought we were getting from technology is not what we have. We outsourced benefits and payroll, so what are we left with - an address book, and IT tells us it'll cost a million dollars to upgrade!"
So why are people are unhappy with technology?
Washington D.C.this week: I have the privilege of delivering a keynote address to Mercer's clients on the subject entitled "Creating a Strategic Enterprise Sourcing Strategy and Governing Change" (whatever will I think up next...). I look forward to posting some banter from their conference, where the central theme is "Successfully Managing the Global Journey". I am particularly interested to hear Jeff Miller and Juila Velixon discuss Mercer's recent study conducted with the Harvard Business School on global service delivery models. I promise to share the findings here. Am also looking forward to hearing Jason Averbrook (great blog by the way) attempting to tie together web 2.0, new HR technologies and outsourcing. Big topics - I love it :)
San Francisco and New York next week: I am more excited than usual at the prospect of attending Oracle OpenWorld this year. Both Oracle and SAP's signature events have fast taken-over as industry meets to anyone in the hi-tech and services businesses. If you are there and want to meet up, drop me a mail. What's exciting this year is the stage they are giving to BPO - come visit the panel discussion entitled the "The Good, The Bad and The Ugly", Moscone South, 307 at 5.30pm on Monday. I'll be joined on the panel with my long-time industry cohorts Stan LePeak (Equaterra) and Mark Stelzner (Inflexion Advisors). I'll be spending the latter half of the week in Manhattan where I have brought together some of the leading minds in the BPO industry for a behind-closed-doors round-table (no vendors allowed...sorry).
London and India: Am making plans to visit London and India later in November and December, so look forward to meeting up with many of you during my travels.
I seem to get pulled into daily discussions from people trying to get a blog off the ground. There appears to be a common misconception that all you have to do is post something and thousands of people will flock to your site, eager to listen to your rhetoric and add their own views. I have literally lost count of the number of bloggers who put out a few posts, only to leave the thing stranded gathering web-dust. Cyberspace is littered with blog-junk that clutters web-searches and gives the impression their owner fell off a cliff or experienced some other inexplicable disappearing occurrence. Bottom-line - if you're going to start a blog, stick with it.
Legendary technology columnist Bill Kutik ran an interesting piece today discussing the betrayal of LinkedIn members. Basically, it's becoming a mammoth database of 23 million professionals, which can be sold en masse to advertisers wishing to peddle their services to targeted members; it's a direct marketeer's dream. Moroever, Bill described LinkedIn as becoming a job board dressed in social-networking clothing. He explains:
Clearly you have far too much time on your hands if you're spending time here, so here are more places to go to fill those vacant hours. This is especially for all you sourcing consultants who went out of your way to vote for yourselves as the "top place to go to get balanced advice on outsourcing" - c'mon chaps get real -:)
IBM vs. Tata: Who's More American? - Businessweek's Steve Hamm raises some incisive points, namely, TCS, India's largest tech-services company, collected 51% of its revenues in North America last quarter, while 65% of IBM's were overseas. Builds upon some of the issues we discussed here last year;
I wrote a piece entitled "Blog-culture is ripping up the rule book for the outsourcing services and technology media industry" a few weeks' ago which raised a few eyebrows. OK, it's a litttle biased and I was on my high-horse, but it did raise several questions on where people go to get balanced, insightful information on the outsourcing industry that they can rely on. So, please choose your preferred three information outlets on the poll to the left side-bar. And please be honest :)
For the results of this poll, please click on the continuation sheet.
The rapid maturing of blog-culture is radically changing the way media is being delivered to people in the hi-tech, services and outsourcing industry. Suddenly, opinionated experts (I do use this term lightly) have access to the industry which they never had previously. Long-gone are the days where they needed regular columns in trade magazines to get their views across, or a press quote that could be used out of context. Why wait a month to get your latest opinions to the world when you can get them out in minutes?
The lower-tier trade publications are getting a hammering. Why go to some of the traditional trade magazines and websites, when there are a plethora of blogs out there with up-to-date news, and great debate - and from people who generally know their stuff. What's more, YOU get to be part of that debate and YOU can decide whether these blogs are worth reading. The threatened media firms argue that blogs are de-regulated and provide unsubstantiated information, however, most journalists are experts at placing their own spin on stories to get attention, and often provide us with unfounded opinions and views for the sole purpose of carving out their piece of the airspace. Even on this blog, for example, we've had opportunities to pick out inaccurate media stories and try and add a dose of realism to the world, which otherwise would have left people with serious misinformation. Not all bloggers have the polish of journalists, but they can get their point across just the same.
Most of the top-tier media brands get this and offer bloggability on their websites. I predict the top media brands, such as Forbes, ZDNet, Businessweek, Wall Street Journal and Investors' Business Daily, will continue to embrace the media of blogging and continue to be successful. However, the choice of websites to visit to get the latest scoop on industry events, technologies, deals, mergers, or even general opinionated banter has ripped the media industry apart over the last couple of years - and this is escalating. Some media firms are building stables of their own bloggers to combat the threat and deliver their own blogging-style media, but are often restricted to people who tend to be independent and not work for large organizations.
What's more, some of my friends who are now pro-bloggers would never have become journalists, however, blogging has provided them with a medium to deliver their insight to industry in their own conversational style. Several of them even make a living doing this... vendors - and even some trade press - are sponsoring their blogs if influencers, clients and prospects go there. The trade-press now competes with these individuals, many of whom are delivering regular content at no cost. In the past, many bloggers would have provided the trade-press with their insight, but they now prefer to preach from their own, personalized pulpit. What blogging provides is a medium for experts, analysts, academics, consultants, marketeers and practitioners to convey their views of the industry, so we don't solely rely on journalists for information, whose media firms are dominated by the whims of their advertisers and parent organizations.
All-in-all blogging has completely changed the media game in our industry. Whereas mainstay publications believed it was their right to own the delivery of information, they are quickly getting a nasty shock that they are no longer the prime vehicle for delivering news and content to their industry. Just visit Google finance and check out Microsoft - as an example. Scroll down the page and you'll see the latest blog posts on the firm. While the trade press still cling on to delivering the news, the bloggers are delivering most of the color commentary...
It's been one of the best running blog discussions of recent months, where the Human Capitalist - aka Jason Corsello - predicted that Workstream would get acquired by Empagio. Credit also to Mark Stelzner for hitting the spot with this one. This is one of the first times I have seen a whole host of industry experts come together in one "location" to debate who would acquire who - and when it would happen. A great example of blogging leading the media charge on an issue like this. Interesting times we live in...
While we're off the topic of outsourcing, I've been having some great conversations about social networking this week. Jonathan Yarmis has joined AMR Research to lead the analyst charge in studying this space and has some great perspectives on where social networking is headed - look out for his research in the coming months. New social media networking tools like Twitter and Snitter are enabling people to have multiple interactions with their networks where immediate synchronicity isn't essential. Instant messenger clients, i.e. Skype, Yahoo, MSN, can be intrusive to people who have a heavy work schedule, and these new tools are more adaptable to people lives and work environments. We have to remember, this all really started with good ol' LinkedIn, which has generated a powerful network of professionals who are connected on the Internet. The big challenge of the Twitters of this world is to get the less tech-savvy people to sign-up (i.e. 98% of the LinkedIn network). LinkedIn kept it relative simple - just copy and paste your resume into a form and you're away. So while LinkedIn is positively antiquated these days, it is the one tool that has pretty much everyone on it... and has some great features like Q&A where you can pose questions to huge networks of people interested in that topic. It's a powerful tool when you can get 50 or so people offering opinions and advice on business issues such as offshoring, or IT questions to solve immediate problems.
I'll leave you with a great LinkedIn debate from over a year ago on Vinnie Mirchandani's deal architect where I delivered my LinkedIn tips: