The Outsourcing Blog..."Horses for Sources"

The 2008 Horses Awards for Awful Outsourcing

In light of all the recent banter on the credibility of awards, I thought we'd serve up our own awards ceremony - and I reckon we can put all of the other lists/awards companies out of business in a heartbeat, because only one vendor will get upset with each award (genius 'eh?)... Here are the categories:

Worst Outsourcing Provider of the year:

Vendors - are you just so plain awful you can't hold down a client?  Then, this could be for you! This is restricted to vendors which have had a minimum of three clients bail on them over the last 12 months, whether they "backsourced", or paid millions to switch to another provider. 

The "Awful Advisor" award:

Rarely is a sourcing advisor ejected from client-site, but it's happened - and a few times!  Buyers - please nominate that team of consultants that drained you of billable hours, before coming up with recommendations that you could have got from a taxi-driver.

The "Bait-and-Switch" special:

Buyers - did you sign up with a vendor, when the minute the ink was try, the entire team who worked their guts out to woo you simply vanished?  Those Six Sigma black-belts, LEAN luminaries and Kaizen karate kids never materialized?  They leave a zero off from the attrition-rate in their Hyderabad call center?  Then nominate your favorite bait-and-switcher today.

The Lousiest HRO provider:

We're spoiled for choice with this one - how many payroll runs did your supplier miss?  Do you blame it for all your dysfunctional HR processes?  Of course you do! Here's your chance to throw your HRO provider fully under the bus.

The Funkiest FAO supplier:

Still closing the books from Q4 2007?  Got 2,748,547 unpaid invoices?  You know what to do...

And finally.... Thought Laggard of the Year:

Sick of the same old bleating from past-it, out-of-touch old industry windbags?  Tired of reading their dreary old articles that they probably got some freelancer to write for them anyway?  Worn-out with ego-filled luminaries starting their own blogs then leaving them stranded after three posts?  Well, now it's time to recognize their anti-contribution to the outsourcing industry!

 

Shift happens

This'll get you thinking

25% of the population of China with the highest IQs.... is greater than the total population of North America

If you took every single job in the US and shipped it to China.... you would still have a labor surplus

In 2002 Nintendo invested $140 million in R&D.... more than double the US Federal government spent on research and innovation in education

There are 2.7 billion google searches per month.... to whom were these questions addressed B.G. (Before Google)?

I'm taking the liberty of taking a week off to go camping in Nova Scotia (am one of those people who cannot face another hotel during my time off).  Happy summer :)

Some summer sourcing soundbites

Outsourcers Hone European Savvy:  Niraj Sheth, of the WSJ, comes up with some compelling examples of how the leading Indian outsourcers are training their staff to understand European business etiquette.  With a weak dollar and tight economy, the offshore leaders are increasing their focus in the high-cost European countries, where expensive currencies, high wages and a challenging economic climate are driving outsourcing to the top of the agenda.  However, it's not quite as simple as adding americanisms to English...

Why is this blog called "Horses for Sources"?

I get asked this question from someone nearly everyday, so here is the reason:  It's a horse-racing term. Certain horses run better on certain courses.

HORSES FOR COURSES - "A mostly British expression urging someone to stick to the thing he knows best, 'horses for courses' comes from the horse racing world, where it is widely assumed that some horses race better on certain courses than on others. In 1898 a British writer noted in the first recorded use of the expression: 'A familiar phrase on the turf is 'horses for courses.'" From the "Encyclopedia of Word and Phrase Origins" by Robert Hendrickson (Facts on File, New York, 1997, Page 339); "A course of action or policy that has been modified slightly from the original to allow for altered circumstances. A horse that runs well on a dry course will run less well on a damp course and vice versa."

I always felt this phrase sums up the experiences of both vendors and buyers which have danced around with outsourcing relationships over the years. An outsourcing engagement that works well for one firm in its particular circumstances, may not be as successful for another; there is no one-size-fits-all solution, when you are dealing with a company's people, processes and technology.  It took me about 30 seconds to come up with this goofy name after a few glasses of vino when I decided it was high-time to get a blog going...
 

The Sheriff puts some fizz back into Cap

Capgemini is making some waves in the world of F&A BPO this year, winning some major global engagements, one of which is likely to be down in Tampa.   Not a bad return from new Sheriff David Poole (he claims he is no longer a deputy).  I have gone on the record to describe the current climate as crucial for Capgemini to break heavily in the global F&A BPO business - and they seem to be doing just that in a highly-competitive market.  They will be pushing hard for the number 3 market share position in the F&A BPO market by year-end behind both Accenture and IBM, but leading the large pack of outsourcing vendors jostling for position.  

Ensuring your sub-processes fit with the MSA

Remember these legends...But can you recall the name of the drummer (pictured in the center)?

Why I put the kibosh on the survey of list-makers

Apologies to several of you who voted on a poll I ran on Sunday/Monday that was evaluating the credibility of the list-makers and award-givers in the outsourcing industry. Unfortunately, I received a very large number of suspicious survey responses from a host of "FORTUNE 500 buyers", whose IP addresses - for some reason - all seemed to emanate from the same couple of locations. I received a very large number of these survey submissions clustered within a short time-frame, and they had no names or email addresses attached. They also all had selected one particular list-maker as "highly credible", while simultaneously describing the same 2 others as having "poor credibility".

It saddens me that on-line surveys can seemingly be so easily manipulated by entities that seek to sabotage results, or skew them in favor of themselves. I have become a little more cynical (than usual) this week as a result. As an industry analyst, I try hard to be impartial and deliver information to clients to help them make informed, unbiased decisions. I run this blog to drive healthy discussion, promote ideas and share knowledge with others. It seems that not everyone shares my ideals.

There's my rant. Issue closed. Thanks for listening. I just hope that there are still many of us who want to drive out bias and impropriety from a challenging industry in these complex times.

The Future Of HRM Service Delivery

I am honored to welcome one of my earliest - and long-time - mentors in the services and hi-tech advisory business to guest on Horses for Sources. It's taken me over a year to persuade her to showcase her insights here, so I guess now she has submitted me a piece is testament to the power of blogging, and the fact that it is fast-becoming a preferred medium for industry luminaries to opine their views to the industry-at-large. The fact that she felt she could be a little more "edgy" and freer to express her views here makes me feel like I am doing something useful for the outsourcing industry hosting this blog :)

Ladies and gentlemen, please welcome the honorable Naomi Bloom and her take on the future of Human Resources Management service delivery. Naomi has over four-decades of experience in HR delivery and technology in a number of advisory roles and is widely-regarded as the pre-emeninent authority in HR platform delivery. Over to you, Mrs Bloom:

The Book of Lists (revisited)

There's been a lot of heated discussion in the outsourcing industry of late regarding the issue of lists, rankings, awards and proclamations of vendors, advisors, tought-leaders etc.  As per expected, emotions are strained when some come out looking good, and some not-so-good. 

However, with such a ramshackle swirl of information out there... from consultants, media, bloggers, analysts, associations, researchers, there has never been a more critical need for the ultimate target - the buyer - to have balanced, unbiased and accurate information and advice. The real issue here is that rankings or "best of" lists are only as valuable as the rigor and independence of the evaluation methodology.

Deborah Kops, who has guested here with some intriguing views on outsourcing issues, has offered to share her thoughts with us on this whole issue.  Deborah is widely recognized as one of the outsourcing industry's most experienced voices, having spent the majority of her career on the advisory and practitioner-side of global services, leading global transformation efforts at Deutsch Bank and Bank of America, before helping to establish PwC's outsourcing division.  Today, Deborah is Chief Marketing Officer for WNS Global Services, a leading offshore BPO and KPO provider, and has greater exposure than most people in the industry to these "lists", now she is leading marketing for a services provider with revenues of half-a-billion dollars. Over to you Deborah:

Good luck Lisa

I was a sad day this week then Lisa Ross announced that FAO Research is ceasing its operations.  I have known Lisa for several years as a good friend, and have rarely met such a talented industry networker and marketeer with a strong perspective on the industry.  Lisa has also guested here during the early days of Horses. 

Lisa's recent work bringing together the sourcing advisor and vendor communities in targeted forums created a platform for valuable industry interaction that only Lisa made possible.  All is not lost, however, as she will continue her recently launched blog.  Knowing Lisa, we will see her re-invented and re-energized in the not-too-distant future.

The challenge of staying relevant in today's corporate climate

Mark Stelzner recently posted some interesting statistics on the plummeting average tenure of C-suite executives:

CEO: A 2007 Harvard Law School study shows that a “manager CEO” of a S&P 500 firm averages 5.5 years of tenure.  Crist Associates’ 2007 Volatility Report also shows the majority of CEOs with less than 5 years of service.

CFO: Spencer Stuart has CFO tenure at 4.3 years - and falling (Crist at 5 for all CFOs).

COO: Chief Operating Officer tenure is shrinking to just under 3 years, with the total number of Fortune and S&P 500 COOs diminishing at a perilous rate.  

CIO: According to the 2008 State of the CIO poll results, a Chief Information Officer’s average time in seat is about 4.4 years, down from 5.1 years in the prior period.

CMO: Spencer Stuart’s annual study shows Chief Marketing Officers at a mere 26.8 months, which is actually up from 23.2 months in the prior year.

CHRO:  Workforce Magazine’s analysis putting an average CHRO in their seat for approximately 3.1 years.  

These stats got me thinking more about how organizations today are rethinking their organizational strategy in a challenging economy where talent management is ever-critical to the business, and non-core functions are becoming increasingly subjected to lower-cost outsourcing solutions.  So why are C-suite tenures all getting shorter? 

How to make your boss look good

I recently had the pleasure of meeting with Kulwinder Singh, who heads up marketing for SatyamBPO in Hyderabad. It's great to meet a marketing guy who generally get's it.  Check out how he placed a picture of Kishore Rao, SatyamBPO's Head of Quality, receiving a Six Sigma IQ Excellence Award on a giant billboard in New York's Times Square...

 

Preparing the new organization for life after outsourcing

I wanted to share an article from last year that discusses how enterprises today can better prepare their key staff for life after outsourcing: 

The outsourcing debate over recent years has been dominated by the operational ability of companies to transition processes to a third-party supplier to manage. Too many companies have presumed their business will carry on as it was pre-outsourcing, but with third-party staff managing some of the business functions. However, in the majority of outsourcing efforts there is a degree of employee transition, and when this happens there are leading practices for both transitioning and restructuring the retained organization.

Experience demonstrates that those companies that proactively prepare their management effectively to:

(1) Modify their roles, responsibilities, and management styles,

(2) View outsourcing as a strategic tool,

(3) Learn new skills, and

(4) Change their daily routine...

...are those that are able to achieve value from an outsourced environment.

The full article is featured in Crossing media's HROToday magazine, and can be accessed here

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The TSA awards its HRO engagement to Lockheed Martin - an overreaction?

There's been a lot of noise in the market this week concerning the TSA's award or their HRO contract to Lockheed Martin.  While this is clearly a bold move into HRO for Lockheed, this isn't likely to prove a major loss for Accenture.  Why?

Process Optimization is the key to successful Procurement BPO

I was recently engaged in an excellent conversation witn Gianni Giacommelli, who leads marketing strategy for SAP's BPO division, on the way forward for the Procurement BPO market.  One of the aspects about SAP that has impressed me, is their strong view of BPO as a opportunity, as opposed to a threat, to their business.  Gianni's boss, Christain Baader, has performed an excellent job driving this strategy in recent years, and made his case-in-point last year where he discussed why technology is an important key to BPO-sustainaility.   BPO is all about driving common strandards that can help service providers leverage their service staff and technology applications across multiple clients in a utility model.  So what better opportunity is there to encourage enterprises to standardize on a common ERP archtecture than when they evaluate BPO opportunities for their business?  And it's not solely about BPO, it's also about globalization: the more global enterprises can encourage their country-level businesses to operate within a global process template for functions such as finance, HR, sales and procurement, the quicker they can access critical data to make global business decisions.  Without digressing further, I asked Gianni to summarize our conversation regarding the development of procurement BPO solutions, where many of the leverage points for cost savings are driven through process and platform optimization, and not solely labor arbitrage.  Over to you Gianni:

Banned in China

I discovered today that Horses for Sources is now inaccessible from China.  Maybe they got a bit upset when I posted Will China's Internet purges inhibit their knowledge services industry? Kind of proves my point...

WNS enters the BPO big-time

So the long debated and much anticipated saga of the Aviva BOT (Build-Operate-Transfer) has finally been resolved, with WNS Global Services taking on a $1 billion contract to become the British insurance giant's BPO provider of choice for the next 8 years.  WNS will be assuming all of the current 24/7 Customer contact center work and some of EXL Service's F&A work, with the latter's contract remaining until 2012.  This contract follows a storming 2007 for WNS, where the Mumbai-headquartered firm has made significant inroads into both financial services and retail sectors, in addition to its already dominant position in the airline sector. 

Some key points

What the hell is KPO and where is it going? Answer: PhDs on tap

During this year's NASSCOM BPO summit, we were subjected to a deluge of three-lettered acronyms which (let's face it) aren't particularly relevant today - as Pramod Bhasin so eloquently opined.  And while "BPO" is clearly a broad and fluffy term that is now used to to describe any type of outsourced process solution that isn't IT, "KPO" is even more vague.  In fact, I discover a new firm daily which claims to have a "KPO" solution, ever since I invited every man and his dog to partake in my new research effort.  And when you have the Chairman of NASSCOM asking "what the hell is KPO?", you know there is a communication issue out there.

So why should we care? 

How to celebrate that contract win without rubbing it in...

Apologies in advance to our German readers.. but you have to admit this is seriously funny :)

Linked-off!

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:

The Legacy of Global Sourcing – What is (Y)our Legacy?

My good friend David Kinnear has been working hard to drive the Global Sourcing Council over the last year, and has some passionate views on how today's industry should approach global sourcing.  David has submitted a compelling argument about how we should look at the longer-term remifications of the global outsourcing climate today.  Before I send you over to David, I'd also like to draw your attention to the next meeting for the GSC in New York's Down Town Association next Wednesday 18th June.  For more details click here.  Take it away David: