The Outsourcing Blog: Horses for Sources

Horses for Sources have galloped off to a new website

 The Horses can now be found grazing at the creatively-named new URL:

HTTP://WWW.HORSESFORSOURCES.COM

See you over there...

Why we've formed an analyst organization

So H-Day has arrived, and we can finally reveal what it actually means.  It's the day Horses for Sources became more than a blog... today it becomes an advisory analyst organization focused exclusively on researching global outsourcing strategy. 

So why on earth do this?

A natural and logical progression.  Simply put, it's a natural progression for Horses.  Having developed such an effective community for collecting so many opinions, having such strong outreach to all the key stakeholders in the outsourcing business (buyers, vendors, intermediaries, investors, academics etc), leveraging the three-year development of Horses as the platform for a new research organization is the logical next-step. 

The outsourcing buyer needs a pure analyst organization.  While there's tons of great content floating around out there, there really isn't one entity that has brought together researchers and real practitioners, with real experience, to focus purely on researching BPO and global sourcing as a pure analyst organization, that doesn't broker deals or write vendor white papers.  Some of the sourcing advisors deliver excellent thought-leadership, and they deserve credit for driving the sourcing industry over the last few years.  The large analyst shops have stuck to their IT knitting and have largely overlooked BPO - they service IT vendors and IT users.  Investing heavily in sales and research to service finance, HR, procurement and other operations professionals desperate to learn more about outsourcing (not solely IT), is not something any of the large traditional analyst firms have done.  You can read, in detail, the challenges and opportunies we face over at SageCircle. 

The Horses won't change, we just expanded

Firstly, the blog remains, and will have even more content and contribution.  We've exported all the content from "fersht.typepad.com" over to www.horsesforsources.com and the blog will continue as a front-end to the analyst organization.  We are producing a series of premium content reports that you will need to be a client to access, but the blog will continue to deliver opinion, and discuss many of the key findings from our research.  I am encouraging our analyst team to set up their own personal blogs in time (if they want to), and several of them will be sharing snippets of their research on the Horses.  And we'll continue to invite industry guests to be interviewed and submit articles.

A big fat personal thank you

Bottom-line, this wouldn't have been possible without the ongoing support and participation of so many of you over the last three years.  I am amazed at the sheer quantity of email and comments I get on a daily basis from people all over the world who visit this thing.  All I ask is that you continue to lend your opinion, respond to our surveys, and continue to pass on the good word.  End of the day, I choose research because I enjoy learning how we can constantly get better at being global, savvy organizations.  I do not profess to know how the world will look in 3 years' time, but if we all continue to debate the issues, the future will gradually unravel. 

I really do welcome your thoughts, opinions, suggestions, criticisms and contributions, so drop me an email anytime,

Phil.

Buy some innovation right here... just talk to Bob

We're still recovering from one of the longest discussion-threads in the history of outsourcing when we asked whether some outsourcing vendors had thrown in the innovation towel.

This also inspired my old friend Bob Cecil to reach out and ask us to work with him to provide some practical advice to the industry on how to achieve some innovation; without coupons, promotional discounts, or even early-bird specials. Just plans old advice, practical thinking, and - heaven forbid - maybe even some patience.  "But wait!  If you call in the next 10 minutes, we'll also throw in..."

Bob, simply-put, is "Equa-Man" - one of the original champions of BPO who has been a key figure in helping mastermind the growth of outsourcing advisory firm Equaterra since its inception.  If there's ever a complex BPO engagement in the works, Bob's usually somewhere on the scene (and likely holding up a warning sign).  He's also hard to track down, as you have to drag him off a basketball court or ski-slope when he's not on a plane somewhere, but we did manage to grab a few minutes with him earlier this week...

Are you ready... for H Day?

Plug in your headphones, crank up the volume and ask yourself... are you ready for H day?

(may take a few seconds to load if you have a cheap computer)

How many of these images from the history of the Horses do you remember?

The great analyst firewall: will banning analysts from blogging damage the traditional research business, or help create an entirely new one?

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. 

The Atwood Files: Adam Smith got it right!

We've had some great contributors to the Horses over the years, and I was delighted to get a call the other day from one of the legends of outsourcing lore, offering to share some of his career learnings with us. 

I'd like to think he rates us that highly, but it's more likely the two feet of snow that submerged his local golf course was what really inspired Mike Atwood to lend us some of his thoughts about globalization, the development of capitalism, and our favorite topic:  outsourcing. 

I recall my first meeting with Mike a few years ago at an Admirals Club in Atlanta, when we were off to impress a potential client with our knowledge of the industry.  All Mike said that day to me was, "you'd better have some good charts"... and the rest is history.  Mike's experience with outsourcing spans 35 years, much of which was spent leading three major divisions at EDS, before turning his hand to sourcing advisory work in recent years, where he's served as a Principal with Everest Group, and leading Hackett's ventures into the advisory space.  Mike has also worked extensively in Tehran (during the Shah's days), Jeddah and Mexico.  Without further ado, let's turn the stage over to Mike to hear his take on how...

Adam Smith got it right!

Over 350 years ago he observed and defined the concept of markets, specialization of labor, demand, all of it.

The Industry Spoke! Hear it all on a free webcast... just for you

For all 1055 of you who perservered through completing our survey, and then being subjected to six lengthy diatribes about what it all means, we can finally put this little study to bed with a FREE WEBCAST on Friday 5th March at 11.00 AM Eastern standard time. 

CLICK HERE TO REGISTER

The Industry Speaks, Part VI: Customers increasingly look to industry-specific BPO solutions, but which vendors will ultimately invest to define and deliver them?

As we discussed during the previous five chapters of this encyclopedic journey to over-analyze our industry, customers are looking beyond the old simplicities of outsourcing to find new and creative ways to find new performance thresholds. 

One of these areas is to exploit BPO opportunities within industry-specific domains, especially where there is opportunity to bundle both BPO and IT services together under a single vendor's provision to generate more efficient business outcomes. 

To cut to the chase, the industry-specific (vertical) process domains are where some of the newer vendor entrants are infiltrating, almost unnoticed, into the BPO industry.  Most of the strong IT services vendors have been developing BPO niches in specific verticals where they have developed some strong process acumen and client credibility, and have the determination to invest in becoming best-in-class within that industry. 

Have some outsourcing vendors already thrown in the innovation towel?

I've recently had two rather disturbing conversations with friends interviewing for client management positions with outsourcing vendors.  In both cases, they were only being asked to bring in new logos from selling low-cost IT/BPO services, as opposed to working with existing clients to up-sell more consultative, higher business-value offerings. 

Both these chaps are senior-level execs who are highly experienced, well networked, and can engage in C-level conversation.  You would have thought several of the offshore-centric vendors would be clamoring for people of this caliber to raise their level of conversation within their existing accounts, rather than utilize them to go after a handful of remaining logos.  Most of the top-tier vendors have relationships with most of the major enterprise buyers these days, so you would have thought their strategy should be centered on developing deeper footprints with them, as opposed to simply increasing the number of low-end operational engagements (or at least a combination of the two).

Will the BSkyB verdict tone-down outsourcing vendor hype?

Trust the Brits to tone-down the hype of the outsourcing sales pitch, with BSkyB broadcasting organization being awarded $313m in damages for a $75m EDS (now part of HP) CRM implementation with didn't quite pass muster.   So is this a major warning shot for vendors over-hyping their capabilities to win deals, or is EDS simply falling foul of failing to satisfy Rupert Murdoch?

While several people are calling this verdict a one-off, I take the view that this sets a dangerous precedent for the outsourcing business, when you consider the sheer volume of complex outsourcing deals that are currently (and soon to be) in play. 

Another one of these verdicts (especially if it's State-side) and we really could see a damaging domino-effect of lawsuits that could change the whole way deals are priced, negotiated and delivered. I even met with a consulting firm the other day, which is making a killing "rescuing" contracts, but in reality is mediating between vendor and customer to annul the broken marriage. 

My fear is that the outsourcing industry is currently operating in a pressure-cooker situation for the following reasons:

Spreading the love for Valentine's Day...

Has it occurred to you how unromatic and unsexy outsourcing can make you feel sometimes?  Fed up with those rate cards, those legal wrangles and those penalty clauses, when all you really want is a nice big hug?

Well, the team over here at the Horses wants to make you feel loved this year on Valentine's Day.  So drop us an email and we'll make send you a free copy of our recent "Seeking a New Normal in Outsourcing Delivery" survey findings... whether you're a customer, a vendor, or even a consultant... we love you all equally (well sort of).

The Industry Speaks, Part V: As the mid-market looks aggressively at Finance & Accounting BPO, the move to standardize heats-up

I took a rather embarrassed peek at the very first post I wrote on the Horses and, having been revived from the camembert fumes of consultant-speak from yesteryear (did we really write like that?), I realized that we were actually onto something back then. 

The only major difference today is that this is no longer a game for the glitzy F100, when clients could demand their vendors take their existing processes, and simply run them at lower cost, with very little change to the actual way they did things.  And if the resulting savings weren't quite as good as originally promised, and the books weren't getting closed promptly, the vendor always bore the full brunt of the blame.

The big difference today, is that more clients are tending (though not always) to take more responsibility for the success of their BPO engagement.  If clients take flawed processes and run them offshore,  it's only going to expose how flawed they were in the first place.   Plus, if you're put in charge of managing a BPO engagement today,  you're charged with making it work, not coming up with reasons for failure.  If you can prove you can do this successfully in one firm, many other firms will want to hire you to do it for them too.  I'm trying to convince a good friend of mine to guest here and talk about how he's managed to oversee two major F&A BPO transitions for two companies, because it's truly becoming a lucrative - and scarce - expertise for customers today.

The Industry Speaks, Part IV: Cloud services will separate the "real" business services providers from the body-shoppers

For once I am stumped for a catchy title, and am opting for some good ol' jargon-laden gruyère to tee-up Part IV in the series discussing our New Normal in Outsourcing Delivery survey.  At least I've avoided the 'T' word lately, to grant myself a morsel of poetic license to indulge in a little schmolz...

But we all love the term "Cloud" (c'mon, you know you do...).  It gives us a nice fluffy visual of ripping out all that complex, clunky computing chaos from our organization, and having some nice services vendor deliver us everything we need for our business... leaving us with simply a screen, a keyboard and lots off additional space in the office to set up that Fussball table... or a Twister mat in the corner...

Why Cloud Computing is the future of outsourcing delivery

While I am probably the first cynic to de-odorize the latest cheese fumes that infuse our industry, I have to admit I am rather taken with the whole philosophy of Cloud Computing.  Cloud signifies the coming-together of business process and IT delivery in a fully outsourced model (see earlier post).  Cloud's not simply about outsourcing the heavy-duty computing grunt - it's about the delivery of real business services, enabled by the applications needed to support them, powered by the requisite computing and network infrastructure to host and deliver them.

Vot happens now?

An "Awful Award" goes out to Technobabble 2.0 legend Jonny Bentwood for this truly hilarious parody of the Magic Quadrant.  I was going to warn readers of some naughty language, but realized that would only encourage you further...

The Industry Speaks, Part III: Demand for outsourcing is reaching new heights, but will vendors disappoint?

Industry analysts are often accused of hyping the market they cover, creating hockey-stick growth projections to get everyone excited and avoiding ever reporting a worrying decline in growth.   I just heard you gasp in shock and horror at this revelation...

So what do you do when you're actually in a position to dust-off the old hockey-stick, last seen used adorning a forecast for online vacuum-cleaner parts from ’99, and slap it under a title such as "Outsourcing spending to reach $250 Gazillion by 2016"?

Which brings us to the topic du jour: what are customers intending to do this year with their outsourcing strategies?  When we spoke to 1055 customers, intermediaries and vendors across the global sourcing industry earlier this month, they gave us the real picture:

The Industry Speaks, Part II: When the labor arbitrage deals dry-up (and they will), customers will select vendors that can deliver business-value beyond basic low-cost services

Fed up with short, punchy news titles such as "Outsourcing is Dead", or "My Delivery Manager Ate my Hamster", designed purely to capture your attention with minimal substance? 

Well, salvation can be found right here, as long-winded rambling ones are going to be all the rage this year, so here's one to send you into a tail-spin:  "Infosys will buy Capgemini, then IBM will acquire the newly-merged entity before spinning it out as part of a joint-venture with Deloitte, GE and Macdonalds".  Actually, before you hurry out to purchase some stock in the Golden Arches, I just made that up...

Instead, let's talk about outsourcing vendors, and what on earth they are going to do when these tasty labor-arbitrage deals start to fizzle-out.  As we discussed at length back in November, operational service provision is commoditizing and leveling the playing field.  Customers did their planning during the recession, and, now armageddon has (apparently) been averted, it's time to execute on that planning.  And part of many customers' planning right now, is to take advantage of moving operational support offshore and driving out some cost. 

This is bonanza-time for the offshore-specialists that can deliver basic IT and BPO services at competitive prices.  Contract-signings that were delayed during the painful recession months are now in full-swing, service vendors are reporting healthy results and even the sourcing advisors have stopped moaning about their lack of deals, and are making money again.

Want to know about global sourcing? Then we'll lend you Anand...

Whether it's cash management in Casablanca, or payroll in Patagonia, there's one guy who'll have a Harvey Ball polished and ready for you.  Enter Everest Group's rock-loving, paint-balling enthusiast, Anand Ramesh, who lives and breathes global sourcing locations. 

However, before you read the excellent guest article he's submitted for us, please spend a few minutes assisting Anand with his new study to understand how companies are leveraging offshore locations – particularly for high-value services – and how the landscape is likely to evolve. Just click here to access his study, and he'll send you a summary of the "Market Vista" report in return for your efforts.  Over to you Anand...

Global Sourcing Destinations: Perspective 2010

The ripple effects of the global economic slowdown made 2009 an interesting year for outsourcing and offshoring. Rapid growth in offshoring slowed in 2009, despite the fact that the trend of high wage inflation in offshoring markets diminished significantly.

The Industry Speaks, Part I: it's not all about cost anymore, outsourcing provides a powerful change-agent

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...). 

Searching for the cloud? Then look to the Highlands...

My earliest memory of outsourcing was ringing to complain about a utility bill and getting a polite, but calmly authoritative, Scottish girl at the end of the line.  I knew immediately that I wasn't going to get a ton of mileage with my quest for justice that day...

We've spent a lot of time discussing outsourcing locations here, and one we've overlooked is Scotland.  And it's not because I'm a Brit and the Jocks don't like us very much - it's simply the fact that they don't make a great deal of noise about what a stellar location they have.  They quietly go about taking on BPO services for the likes of Morgan Stanley and Shell and let their reputation take care of itself. 

So, with this year's European Shared Services Week conference being staged in Edinburgh (where I once narrowly dodged the cheese police, but I'll save that story for another time), I asked Danny Cusick to give us his best Scottish sales pitch that puts those "Invest in Wales" ads (we get force-fed on BA flights), into the shade.  And for those of you who don't know Danny, he's President of the Americas for Scottish Development International.  Over to you Sire!

Alsbridge doubles-down on data-rich consulting with TAG acquisition

 
We've had a huge amount of debate concerning the future direction of outsourcing advisory services, and today, we can exclusively reveal a sea-change in the advisor industry landscape with  Alsbridge's acquisition of TAG, the leading life-cycle expense management advisor for network services.

Weekend recap: the "new normal" in the outsourcing delivery business

Thanks to all of you who participated in December's survey "Seeking The New Normal in Outsourcing Delivery". 

In total, 1051 companies gave their opinions, with a strong mix of buyers, intermediaries and providers participating to give us an unprecedented pulse on the outsourcing industry.  About time we had less prophesying and some actual hard facts on what's really going on out there...

In anticipation of releasing the results of the study later next week, I'd like to recap some recent thoughts on where the industry is headed, to help make sense of what is really happening in the industry.  And a special thanks to our friends at Global Services Media and the Shared Services & Outsourcing Network, who graciously invited their member communities to complete the survey (thank you, Ed and Sarah).  And curses to those of you who pilfered our phrase "New Normal"... you know who you are :)

The "new normal" in the outsourcing delivery business

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"?

Adieu to a research legend

Right on cue with our discussion earlier this week, the "void" just got bigger as software analyst legend, Bruce Richardson, announced his departure from the analyst community to take on the role of Chief Strategy Officer at software giant Infor. 

Known in the industry as "Mr AMR", Bruce has entertained us for years with his famous "First Thing Monday" newsletter and blog.  I, personally, have Bruce to thank for bringing me back to the analyst fold with AMR in 2007, and being a guide and mentor to myself and many other analysts during his role as Chief Research Officer.

Like everyone else in the industry, I am hoping - and expecting - Bruce to continue enlightening us all with his weekly musings from the vendor side.  And I am sure even SAP and Oracle won't begrudge him what has become industry-standard with our Monday-morning espresso.  Who said you can't blog from the dark side?

Good luck Bruce - you ARE a legend :)

Getting even more Ruest... Part Dieu

And now time for the long-awaited second part of our interview with our francophonic snowboarding services stud Sebastien Ruest, IDC's Veep for Global services research. (Vous pouvez accéder à la première partie ici).  And ladies, please no more emails asking me whether he's single... 

Phil Fersht: Sebastien, let’s talk about Cloud, where you’ve been particularly involved. In a nutshell, can you help us separate the hype from reality, and explain to our readers whether this is just the next buzz-phrase in the IT business, or a genuine way we’re going to access services in the future? Do we have any optimistic IDC projections with cloud-based services?

Sebastien Ruest: In the last few months, I have had the chance to speak with many CIOs and one thing I learned is that the idea of Cloud, this new model of IT and broadly speaking of Business and Consumer delivery through the cloud is of very high interest, to business execs, CIOs in the market right now. But, as you can imagine, Cloud Computing means different things to different people. The cynics will say that it is nothing more than "ASPs on Steroids".

The great analyst roll-up is on... who'll step into the void?

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?

New Year's outsourcing resolutions for service providers

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 -:)

 

...and the more serious moments of '09

And now we can finally put that year to bed, surely we can look forward to a more normal 2010.  Of course we can ;)

 

 

Here are some of the more serious moods and moments from a rather epic year in our industry...in chronologial order:

Satyam: It was like riding a tiger, not knowing how to get off without being eaten

Think before you fire: The cost of replacing IT talent

Forget 2006, let's go back to '96

Global business on a Knife-edge: Bonuses, H-1Bs and Naïve Protectionism

The best of Horses in '09... the funnies

 

And on a less serious note, here's the more amusing side to 2009...

Meaningful use of Twitter discovered

Obama to ban offshore outsourcing

India shows us how to innovate

Swine Flu can impact your service levels

Proof that you can stabilize your operations eventually...

It's all about hitting the ground running after you sign the contract

Remote Infrastructure Management anyone?

Getting to a point where you can lay in one place and not have to do anything ever...

Being middle-seated... all the way to Orlando

Payback can be sweet...

 

 

2009 - the year of papering over cracks

Most people I speak to can't wait for 2009 to be put to bed.  People suddenly awoke to the realization that everything they have grafted so hard to achieve in their lives could be seized from them, because their economy had failed them. 

Like everything else in this world, we always wait until its too late before taking drastic action, and 2009 epitomized this reactionary mindset that dominates so much of our society.

However, I did want to sign off from 2009 with a dose of realism... fancy phrases such as "New Normal", or "Preparing for the Recovery" only wash when they attempt to address the question: "How the blimming heck can we radically change our attitudes and actions to save our children from economic and environmental disaster".

Come to Jersey City in January

Have you ever had such an irresistible request?  Well... here's your chance to tour the exquisite delights of the picturesque tree-lined New York suburb, with its manicured lawns, fine eateries and state-of-the-art museums, where you can enjoy the famous hospitality of the jovial, friendly local folk who'll make you feel right at home, shrouded in luxury and fine local culture. 

However, sight-seeing in paradise, drenched in lovely winter sunshine, isn't all you can look forward to during this visit of a lifetime... you can also make a sneaky detour to the Global Services Conference, where you can mingle with the hoi-polloi of the services and outsourcing industry, at Jersey City's sumptuous Hyatt Regency hotel on 28-29 January.

Getting a bit of Ruest (Part I)

If there was a Nobel Prize for industry analysts, this guy walks away with it - he's super cool, talks a good game, and has done very little beyond, well, be super-cool and super-smart... and with a French accent to boot.  So today, I thought we'd give IDC's Sebastien Ruest the chance to prove there's a bit more substance behind the snowboarding, hockey-stick-wielding playboy façade :)

Sebastien's proving IDC's nearshore model by leading it's global services research from Canada, and developing a solid reputation in the industry as one of the industry analysts who "gets it".  So I thought it time to grab a few minutes with the dude himself...

Mystery Governance Predictions

Remember our mystery blogger who evangelizes on best practices for vendor management?  Well that mysterious individual has challenged me to a predictions dual this morning (gasp), where he /she said "I'd be willing to wager a drink on who gets a higher percentage right.  After all, I didn't bet on England in the World Cup, so I'm pretty optimistic :)"  We'll see about that sunshine...

In any case, our friend has come up with some pretty eye-catching and profound statements, for example:

Simply Lowell (Part II)

So here's the eagerly-awaited second part of the Lowell Williams experience, where we decided to give him 30 minutes of fame. Over to Equattera's HRO mega-star with the handbrake firmly in the off position...

Phil Fersht: Lowell, we’ve had a lot of talk on here about “Platform BPO”, where clients essentially take on a standard SaaS-delivered platform, supported by business processing services delivered by a BPO provider. How do you view these “on-demand” business services? Isn’t this just a win-win for the software providers, with limited value for the BPO provider? How can service providers differentiate their offerings in this type of model?

Lowell Williams: As mentioned above, many HR and IT executives

2010 Predictions for the Outsourcing Industry

Firstly: my apologies to everyone for hopping on the perennial "Predictions Bandwagon".  One may as well say "Stop press everyone, I'm just such an important smarty-pants you should listen to ME ME ME!"  As Newt Gingrich told us earlier this year:  "There is not one living being that can accurately predict the outcome of this crisis, all we can do is continue the dialog and the answers will slowly unravel". 

Secondly:  we've conducted two major studies with outsourcing buyers globally this year (and am currently sifting through 800 responses - and counting - from our current industry study).  While we can evangelize, prophecize, pontificate and sermonize, nothing can substitute for real data on what everyone is currently doing and planning to do.  We have the platform here to do that, and I personally thank all of you who took a little time out to share their views, actions and intentions.

And Thirdly: I'm just such an important smarty-pants you should listen to ME ME ME!"  So maybe I can help with the unraveling?

i) CIOs and CFOs will be uniquely challenged to avoid becoming "Cartoons of the Recession". 

Simply put, when there's a serious recession in the works, the job of the CIO is relatively simple - cut costs and squeeze your suppliers using whatever means are at your disposal.  CIOs rarely get fired in this scenario, unless they somehow messed up the cost-cutting. 

Are prices really dropping, or are services merely being disaggregated?

One of the advisors which has really made a strong move in the sourcing business this year is Alsbridge.  Much of that has been down to its strong track record with clients, but its also made some canny investments to augment its advisory services.  One of these I've had some exposure to is ProBenchmark, which has been running some excellent webcasts looking into how pricing trends and dynamics in IT services. 

I caught up with CEO Ben Trowbridge the other day, and he wanted to let us know about a webcast ProBenchmark is running next week - you can register here.  Plus - for all you cheapskates... its FREE (Wednesday 10th December at 2.00pm EST).

Anyhow, I managed to drag Ben away from a hunting outing for a few minutes to pose the following questions:

PF: Which IT services have fluctuated in price the most?

Simply Lowell (Part I)

For once I am stumped for a title.  The one man who had successfully escaped my previous attempts to feature him has finally been caught.  Either his career has nose-dived and he's now desperate for some publicity, or the "Horses" now gives that 15-minutes of fame people so badly crave.  I hope it's the latter -:)

Yes - we have the one-and-only Lowell Williams in a two-parter...

Lowell, quite simply, is the most respected practitioner in HR Outsourcing.  Not only has he spent many years as an actual HR leader, he also worked for the "original" HRO provider Exult, moved into the sourcing world with TPI, before joining Equaterra in 2004 to head their HRO advisory practice.  He has been responsible for many HRO engagements - and he has somehow survived to tell the tale.  He also became the HROA's "Person of the Year" in 2008... an honor only bestowed to the most lovable scoundrels in the outsourcing world.  So without further ado...

Complete our survey. Now

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 "Seeking the New Normal in Outsourcing Delivery"

All individual responses to the survey will be maintained strictly confidential. In return for your time, you'll receive a free write-up of the survey findings (wow).

We have partnered with the member communities at Global Services Media and the Shared Services & Outsourcing Network to ensure a powerful global participation of decision-makers and senior executives engaged in outsourcing delivery services.  Please do participate and help advance our collective understanding of the industry.

Please note that "Horses" is a free resource for the sourcing industry at large, and the purposes of this research are to further all our knowledge and understanding of the direction of the global sourcing industry, whether you buy, sell, advise, criticise, market, commentate or analyse sourcing delivery.  And if you do neither of these activities, please seriously question what you're doing here in the first place -:)

PF.

Can IT overcome its credibility crisis?

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.

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

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 Warmth?

Xerox is the latest in a long line of technology manufacturers to realize that its future lies in services, not products, particularly in the B2B value chain. Once manufacturing and supply chain efficiencies have been wrung out, it’s time to turn to top-line opportunities: services that use product heritage as a foundation. The fastest way to acquire these capabilities is by acquisition. Xerox’s predecessors in this journey include IBM, Fujitsu, Hitachi, HP, and, just recently, Dell, with its acquisition of Perot Systems.

Eulogizing on the Eurozone with Principal Euan

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 a curious detour to Yankee Group, before finally attaining new heights of stardom and adulation with Forrester.

Euan now boasts the words Principal Analyst in his job title and waxes lyrical about IT services in the Eurozone. Ask anyone in the industry and you’ll discover he’s fast becoming one of the most popular analyst figures on the European services circuit. And, despite the fact he once lost to me at tennis (a shameful occurrence for any man or beast), he still warrants an airing on the Horses…

Phil Fersht (PF): Euan, firstly, what are the main issues you’re hearing from your Euro clients these days? What are the main contrasts between now and before the economic crash last year?

Euan Davis (ED): The issues are many and varied but if I was to distill it down to what I see as the issues that clients are facing today then they fall into three categories: Some are “firefighters” and are looking to reduce costs wherever they can, pushing for discounts and getting economies of scale through aggressive supplier consolidation. Others are “explorers” and are directing energies into investigating a host of emerging options for IT service deliver—and business process outsourcing is one such area. The exciting ones to watch for my money are the “builders.” These firms are sinking the foundations that underpin a profound shift in their operating model architecture, IT/business redesign, and supplier engagement models. These firms are building hybrid operating models driven by a structured sourcing frame works, regulated through a retooled service management structure, and connected to a core set of suppliers. And the recession has speeded up the process of change.

The "new normal" in the outsourcing delivery business

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 is a backlog of engagements which are largely labor arbitrage-focused and it's often a question of price balanced with the promise of delivery performance for most clients.  There isn't a lot of secret sauce these days for what many clients are currently demanding, where in the past, incumbent service providers could play the "capability game".  With many of these skills becoming mainstream, the competitive playing field has leveled out.

Taking a walk on the Wacki side...

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 figure at industry events to talk about what our industry needs to do to get to that next level of performance. He’s truly a “been there done that guy” who’s seen it all… Anyhow, I managed to drag Paul away from his favorite past-time of tracking global financial indices and stock markets (no joke, he does that for fun) to talk to us for a while about finance transformation and global sourcing:

Phil Fersht (PF): Paul, firstly, what are the main issues you’re hearing from your clients these days? What are the main contrasts between now and before the economic crash last year?