The Outsourcing Blog: Horses for Sources

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...