You could be one email away from salvation…

Posted in : horses-for-sources-company-news

Posted in : Absolutely Meaningless Comedy

The recent issue regarding Infosys landing in hot water over alleged misuse of B-1 visas is being completely overblown.

Many of you may have read this week’s article in the Wall Street Journal’s CIO Journal which outlines the issue of overseas tech staffs’ employers using various temporary work visas to work on global ITO engagements.  Let’s discuss the major contentious issues in play here:

1) CIOs and CFOs have a right to know about the legality of their onsite personnel.  When you have staff from overseas locations working intimately – and in close physical proximity – with your local staff, you need to be sure they are present on the appropriate immigrant visa.  If you are using a purely remote outsourcing service – such as a payroll processor, then you are simply acquiring a service and this shouldn’t be a concern, however, if you are having services staff performing tasks that are directly visible to your employees in a work setting, you should ensure these immigration issues do not create negative exposure for your firm.

2) All service providers use all the various immigration visas.  H-1s, L-1s, B-1s, O-1s, Green Cards – they all form part of the global sourcing equation when staff are required onsite.  The bone of contention with the recent issue has been the use of the B-1 business visa, which includes “negotiation of contracts, consultation with business associates” as part of its usage, provided the purpose is not “gainful employment”.  Forgive me if I am wrong, but if an India-based expert visits a US client temporarily to support a contract process or consult on getting an onsite-offshore project working, then there really ain’t too much wrong with using said visa for said purpose.

3) Unemployment in IT is running at half the US average – we need these skills.  According to a recent Mashable article :

“The unemployment rate among information technology (IT) professionals remains at about half of the national average at 4.4% in the first quarter of 2012 — and that’s no surprise given the strong demand. Hiring managers are even facing stiff competition in securing some key types of IT skills”

The reason many of the service providers are keen to bring talent into the country to work on engagements is because they bring the experience of managing offshore personnel, and helping with the provision of scarce skills for the client.  This isn’t always about saving a few dollars from someone’s rate card, it is about making these global sourcing engagements work effectively.  Moreover, many of the “landed” account/project managers working onsite in locations such as the US are training the local staff to manage international staff effectively.

4) Having global project experience is critical for US IT professionals.  The signs are good that US enterprises will increasingly be looking locally for IT staff (which our new study findings will reveal next week), and will be seeking a strong balance across their Indo-US IT staffing models.  Hence, they need to up their skills with having US staff schooled in managing global projects.  The only way to do that is to have experienced account/project managers spend time with local staff to help develop their management experience.  You can’t run this all in a remote model – you need mixed teams of provider and client staff to make these engagements work effectively.

The Bottom-line: It’s time to embrace and compete, not resist and fall further behind

Having petty stories like this being blown up in the media is only causing negative emotions and xenophobia to be stirred up needlessly in this year’s political melting-pot.  We operate in a global business climate these days, in case anyone hasn’t noticed… it’s time to embrace and compete, not resist and fall further behind.

Posted in : Business Process Outsourcing (BPO), Global Business Services, IT Outsourcing / IT Services, Sourcing Best Practises

The debate’s been raging for years, since we first broached this topic over four years ago, where the common consensus was pretty much “we’re stuck with it, so might as well live with it”.

However, while the outsourcing industry has (largely) matured, with many new clients focused on achieving value that isn’t merely derived via cost-savings from lower cost labor, the political rhetoric has stood still, with the vast populous still associating the “O” word with shipping jobs abroad.

So… it’s time for YOU to have your say, whether you buy, sell, advise, analyze or influence IT or business services.

Please spend five minutes of your time adding your own viewpoint on whether or not the industry known as “outsourcing” should reinvent itself:

Posted in : Business Process Outsourcing (BPO), Global Business Services, IT Outsourcing / IT Services, Sourcing Best Practises, the-industry-speaks

Posted in : Absolutely Meaningless Comedy

Whoever said we weren't stimulating new growth in the professional services industry?

Every few years there comes along a piece of regulation, or enforced change, from which hoards of management consultants, service providers and tech companies can prosper.

The Y2K bug created an unlimited ATM for the whole software and services industry, and the infamous Sarbanes Oxley which created more audit partners than eHarmony. And just as you thought that well was running dry, we now have Dodd-Frank Act, designed to:

“Promote the financial stability of the United States by improving accountability and transparency in the financial system, to end ‘‘too big to fail’’, to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.”

With Michael Koontz, our new lead analyst for banking and financial services, now fully bedded-in, he’s found half his time is already being spent talking to clients about how to get ahead of these new regulations.  Let’s hear his initial thoughts…

Dodd-Frank turns Two

Please join me in wishing Dodd-Frank “Happy Birthday.”  This is the largest financial reform act in U.S. history, amassing 884 pages when it was finally signed in 2010, designed to enforce the most significant changes to financial regulation in the United States since the regulatory reform that followed the Great Depression.

Dodd-Frank was implemented to address the financial services meltdown, that began back in 2007.  In the political aftermath, Regulators were quick pass this legislation which has now morphed into the 2,000 pages and 400 separate rules that we see today.  Dodd-Frank was designed to strengthen oversight of banks as well as insurance companies, mortgage companies, and brokerage firms.

Now, at the end of its second year, federal agencies have passed 221 rules. Financial institutions and insurance companies are scrambling to meet all these new requirements, while trying to anticipate the implications of rules that have yet to be finalized.

Securing the necessary resources to meet these demands is proving to be a significant challenge for both the regulatory agencies and the companies affected, and the subsequent need for strong risk management and compliance personnel is growing across the United States. Not since the scramble to meet Y2K, have financial institutions been forced to rely as heavily on management consultants and third party providers to meet compliance deadlines.  That is right, Y2K, did that bring back some memories?

Adding qualified staff is already proving to be a challenge for financial institutions. For the average tier one bank, risk and compliance personnel represent about 3 percent of the total workforce. This number is expected to double as a result of the staff increases required by Dodd-Frank, but the demand for qualified staff outweighs the supply.   There are 1,000’s of “risk jobs” posted on job sites all over the Internet.  There is a run on talent in the U.S. if you have risk management or compliance experience on your resume.

Financial institutions will remain skeptical on outsourcing this work until they figure it out themselves but with the amount of work that is going to be required, and soon, it won’t be long before they are having these discussions with their business partners.

Both consultants and outsourcing providers will be receiving calls for help, but what most companies will find is that there is only a select few that are going to be able to step-up and support this level of work.  There is work that can be outsourced, including much of the analytics and reporting functions for compliance reporting, however, the tricky part is going to be finding the provider who is capable to support the levels of both complexity and rigor to meet the banking and regulatory standards.  For providers, this is going to make a SAS70 type II audit look like a walk in the park!

Michael Koontz is SVP, Banking and Financial Services, HfS Research (click for bio)

The full impact of Dodd-Frank is still a great unknown, but likely to be significant, and HfS is watching it closely to observe which consulting companies and outsourcing providers are able to step up and support their clients.

You can read more about Michael Koontz’s initial observations by accessing our new research site here. You can also request a copy by emailing us here.

Posted in : About Us, Business Process Outsourcing (BPO), HR Strategy, IT Outsourcing / IT Services, Security and Risk, sourcing-change, state-of-outsourcing-2011-study

Jonathan Yarmis (aka "Dr Disruptive") is Vice President, Social Business Research at HfS (Click for Bio)

Social media and collaboration has been the heart of HfS, ever since we began as a wee blog in 2007. And while “social” has provided an obvious catalyst for helping some analysts and industry influencers share their insights and develop their networks with incredible speed and hapless abandon, we are now seeing the beginnings of social business playing a truly disruptive role in influencing the way global organizations are evolving.

Today, managers, employees, provider staff and even consultants can have access to data, insight, infinite networking  and crowdsourcing opportunities that simply didn’t exist even a couple of years’ ago.  Global business practices are starting to become disrupted in ways that are frightening many firms into retrenching, while others are realizing they have little choice but to embrace the change, otherwise get left behind.

People no longer have to pay thousands of dollars every-time they need help or information these days, especially when dealing with business and IT processes that no longer require some “secret sauce” to become common practice.  “Best-in-class” industry process workflows, which many organizations have historically paid hundreds of thousands of dollars to acquire in the past, can now be accessed and shared, within minutes, by visiting many of these social networks – and some are even facilitated by providers themselves.

Buyers, providers, consultants, lawyers, analysts, investors… all of the industry stakeholders, need to wake up to what is happening in the world, as our skillsets, best practices, trade secrets and the like, are much more easily accessible at a global level. Remember how similarly disruptive delivery models blew up the media, entertainment and PR industries in recent years?  Well, the same is happening to all industries that thrive on collaboration and information – and none more so than global sourcing.

To this end, we are compelled at HfS to focus intensely on social business and its disruptive enablers, such as mobility and cloud, in order to stay ahead of the curve, with how our global operations industry is being impacted.

So who better to onboard, than the services of a man I actually named “Doctor Disruptive” in 2007 (he’s probably forgotten I did that), who was lauding the future business impact of mediums such as Twitter, when a colleague of mine at AMR research.  The only difference was – in those days – most of the analyst industry thought Jonathan Yarmis was plain nuts. Well, they were right about the nuts, but not about the fact that he was onto something three years’ ahead of his time.

Jonathan is a rare breed; someone who has an encyclopedic knowledge of technology, having been one of the original “Gartner Greats” in the 1990’s, before spending time as a lead executive in the hi-tech PR world for Hill and Knowlton, and finally returning to the analyst industry with AMR Research.  Yes, Doctor Disruptive has crafted a trade where he combines an intimate knowledge of technology, media and global business dynamics to bring to you a unique research practice dedicated entirely to covering the impact that social media and disruptive technologies are having on global business dynamics and operations.  Jonathan today resides in Stamford CT, a stone’s throw from his old Gartner stomping ground, where is the proud Dad of Sam, who is going into her junior year at at Oxford University, England, and Ben, who’s an aerospace and mechanical engineering major going into his senior year at George Washington.

So after the longest-ever introduction to an new analyst hire, I hand you over to the notorious Jonathan Yarmis, who waxes lyrical on…

Disruptive Technologies:  The Sourcerer’s Apprentice

Today’s outsourcing leaders broadly proclaim that the broad deployment of a new generation of disruptive technologies (social, mobile and cloud) offer new vistas and new opportunities for their businesses to add customer value. Their bold assertions of opportunity ignore the fact that these new platforms actually represent a significant challenge to their businesses.  The water is rising and it will take a wizard’s deft hand for them to survive the floodwaters that have been unleashed upon their castles.

Disruptive technologies have been a hallmark of the technology landscape since the advent of the minicomputer and, more profoundly, the personal computer.  (I began my career in technology back in the early PC days of 1979, before IBM entered the market.) However, successive generations of these disruptive technologies have all been constrained by the fact that they lacked enterprise scale and scope.  This has been irreversibly changed; users now rule the roost. Gartner calls this the “consumerization of IT.”  What they’ve overlooked, however, is that this is inexorably leading to the consumerization of business and the “IT-ization” of consumers.  Our users and customers now have access to infinitely scalable platforms with global reach.  Facebook supports 900 million users.  Can your enterprise solution deal with that?  Amazon has deployed over 500,000 servers and is adding over 100,000 virtual machines to their cloud every day. You think that’s a big number?  Google handles 34,000 searches every second. That equates to 3 billion per day.  Three billion.  Has your enterprise system handled that many transactions in totality?  Ever? The “consumer” platforms like Amazon, Google and Facebook have been forced to define their own operating platforms building on top of cheap, scalable consumer hardware to deal with their own unique requirements.  They haven’t outsourced their platform development and deployment.  They’ve had to develop it themselves and, having done so, they make it available…perhaps most amazingly, often for free.

You’re probably thinking “yeah, but what does this have to do with me and my business?” At the risk of gross generalization, today’s generation of outsourcers have been able to flourish because business processes are:

• Formally defined
• Top down
• Replicable across companies (enabling economies of scale for the outsourcer)
• Predominantly intra-enterprise
• Enterprise-centric.

By contrast, these disruptive technologies are creating shadow processes which mimic, supplement and eventually will supplant at least some formal processes.  Some of the hallmarks of these new processes include that they are:

• User defined
  • Often running on user-provided hardware (BYOD)
  • Ad hoc
  • Unique to a company
    • And maybe even then, not replicable
    • Transcend enterprise boundaries
      • In fact, they’re often unaware of enterprise-boundaries
      • User- and customer-centric.

It is not hyperbole to suggest that BYOD (“bring your own device”) will soon be complemented by BYOP (“bring your own platform”).  Think about that one for a moment.  We’ve seen the chaos wrought by BYOD.  We have to develop for platforms we didn’t even know were deployed in the enterprise.  We have security risks enough to scare even the non-paranoid.  (I can see the hand-wringing from my new colleague Jim Slaby.) And we’re so powerless to stop it that we’ve given it a term (BYOD) and embraced it as a strategy.

BYOP won’t be so clean.  How have enterprises tried to deal with this?  Phase 1 has been to try and subsume the user revolution.  So, CRM is slowly giving way to “social CRM.”  This is a laudable objective on its surface.  And ultimately it’s going to fail the same way that CRM has failed, only bigger.  Why?  Because it’s built on a fundamentally flawed premise.  The holy grail of the 360 degree customer view is unachievable.  Heck, we can’t even get a complete view of our own transactions with a customer, let alone a 360 degree view.  More data – big data is the new holy grail – hasn’t gotten us closer to that goal.  I might even argue that big data is a big step…backwards.  That’s a discussion for another day but a hint:  we’ve spent decades trying to move from data to information to knowledge to wisdom.  Now we’re thinking more data is the answer?  If we don’t focus on transforming big data into big insights or big actions, we’ll just drown in that rising tide of data.

Anyhow, back to the question at hand.  What will the rise of social and mobile and cloud platforms mean for existing categories of enterprise software? In the case of CRM, beyond social CRM – including social interactions in our customer information – will inexorably lead to VRM.  Vendor Relationship Management.  A whole new category where the user is in control and we realize the only way we get a 360 degree customer view is to earn the customer’s trust and ask them for permission to see relevant parts of that view.

As is so often the case with new technologies, we go through two phases.  In the first phase, we apply it to existing processes, hoping to make them more efficient or effective.  In phase two, where things get interesting, we instead ask “what can we do now that we couldn’t do before?”  When it comes to social, mobile and cloud, we’re still largely in phase 1.  You may not have noticed but we’re actually going on five years in to this revolution, which is usually when we start moving on to phase 2.  It is upon us.  This revolution is going to transform our business processes in profound and still poorly and mis-understood ways.

That’s why I’m here.   To help you understand and prepare for this brave new world.  We’ll help you get those floodwaters to recede.  My research agenda will focus on how social business will change the way we work, the way it impacts various categories of software, industries and job functions.  I’ve already had some fun conversations with Tony Filippone when I’ve made the assertion that social business changes “everything.”  With his eminently practical practitioner’s eye, he’s come up with some use cases where the impact will be minor at first, and slow to evolve…and we’ll acknowledge those.  I’m not here to be a cheerleader for social business.  But nor will I let you ignore the profound changes coming down the road.  I’m looking forward to challenging your thinking, and having you challenge mine.

Cue Leopold Stokowski.

Posted in : Business Process Outsourcing (BPO), Cloud Computing, Global Business Services, IT Outsourcing / IT Services, Outsourcing Heros, SaaS, PaaS, IaaS and BPaaS, Social Networking, sourcing-change

What's in a word?

The industry known as “outsourcing” is currently under its greatest-ever attack.  President Obama has made attacking Bain Capital’s promotion of itself as a “one stop outsourcing shop” as the focal point of his campaign.  And this is a serious attack – he has $512m in campaign money left to burn, and only $25m a month is currently being spent on attack-ads from both parties – the worst is yet to come (from both sides).

Without getting (overly) sucked into the politics, this election is becoming so nasty, so vehement and so contentious, that common sense is taking a backseat to negative politics, as many of the anonymous donors of hundreds of millions of dollars of Super PAC money demand victory at all costs, regardless of the collateral damage along the way.

Worryingly, for the business and IT services industry, we are all now caught in the crossfire.  This is quickly developing into an attack on “outsourcing” that is going mainstream, where many pundits and voters, not familiar with the complexities of global business, are jumping on the bandwagon. As a British subject observing these shenanigans in amazement, I am increasingly wishing this election process could hurry up and be concluded, so this country can finally get back to creating policies, as opposed to this civil war of partisan politics, which is focused almost entirely on negativity, where winning at any cost seems to be the order of the day for both parties.  I sincerely hope the global economy can hold up through November, as we endure this painful – and, quite honestly, rather shameful period in our history.

“Outsourcing” is the symptom of an increasingly competitive global economy, not the cause of America’s economic woes

To cut the chase, Obama is appealing to the fear from protectionists and the masses that US jobs are being “shipped overseas” and he will “insource” them back to the US if he is re-elected.  What he is glossing over is the fact that 97% of US organizations today, with over $1 billion in revenue, are already outsourcing some piece of their business or IT operations and – in most cases – some degree of overseas labor is used by the service provider.  What he needs to focus in on is why service providers use overseas labor:  because it is cheaper, and there is a lot more of it available.  Our current survey is exposing this fact in spades, which we will reveal soon.

The President should be bemoaning the fact that US labor costs are far too high and the country is not currently blessed with millions of people in urban or rural concentrations who are prepared to take on lower level white collar jobs at $25-40K per annum.  He should be bemoaning the fact that the US education system isn’t producing hordes of graduates qualified in ABAP programming that can compete with the Indian factory model.  He should be bemoaning the fact that the 8% of the US workforce currently  unemployed aren’t filling the jobs that are being “shipped overseas”.  Our data already shows that most US business would love to move work to onshore locations, and would be prepared to make much less significant cost savings, if it was available.

Organizations outsource because it makes them more competitive and it pleases their shareholders. If Obama truly wants to be the “Insourcing President”, then he has to figure out how to make the US labor force competitive with the rest of the world. That is where he should be focusing, as opposed to pandering to the xenophobia of the masses by claiming other countries are stealing their jobs because evil corporate leaders, which he claims Mitt Romney supposedly once was when at Bain, shipped them away in the first place.  “Outsourcing” is a symptom of America’s continuously spiraling cost of living and lack of available talent, which is the real cause.

And what really gets my goat is the fact that “outsourcing” is always the whipping boy for corporate greed.  How about the software industry?  Forget shipping some jobs overseas, these guys want to automate  all corporate support activities and eliminate jobs altogether!  Why aren’t we seeing Larry Ellison, Jim Hagemann Snabe or Marc Benioff being demonized as job eliminators?  SAP just announced their best ever quarter – how many jobs have been eliminated because of the evil corporations plowing millions into their ERP platforms?  Why don’t we just call the software industry the “unnecessary job elimination industry”?

So how should the “outsourcing” industry deal with this?

For years, we’ve bemoaned – but ultimately ignored – the negative emotions that outsourcing incites, with which customers of outsourcing services really struggle (remember this piece?).  Most of have reluctantly agreed that we could never change the dreaded term, so we might as well be resigned to live with it.

And just when we were finally thinking that most of the mainstream IT and business process work, that uses some degree of offshore support, had become commonplace in today’s modern organization, the old “outsourcing is a dirty word” scenario has returned – and returned in spades.  This time, outsourcing is a really dirty word.  Just ask Bloomberg!

We all know Obama is pandering to the xenophobia of the masses to avoid losing votes to Romney.  We all know he’s not openly tackling the real causes of the US’ economic woes in his campaign… but he is the President.  And when the President is personally appearing on TV every 15 minutes, whipping up more fury about evil outsourcing, the services industry has, I’m afraid, now got an image problem that is worse than we’ve ever had.

We’ve made our feelings pretty clear, at HfS, that it’s time to evolve how we approach and promote global services.  Yes, it makes great conversation, but now the Pres is forcing the industry into a corner. We have to match the misperception of how the business and IT services industry operates with reality of what we really do – it’s clear these prejudices are not fading with time, the flames are always there to be fanned when it suits the purposes of protectionists and politicians.  Stay tuned, we’ll give you the opportunity to cast your vote soon about what we should do with “outsourcing” terminology, but in the meantime, I’d love you to share your feelings with us,

Phil.

Posted in : Business Process Outsourcing (BPO), Confusing Outsourcing Information, HR Strategy, IT Outsourcing / IT Services, Procurement and Supply Chain, sourcing-change

We are inviting you to share your views and experiences, in the strictest confidence, on the pros and cons of outsourcing IT and business processes TO the United States of America, compared with other global regions:

Essentially, we need your deep opinion on:

• Is the USA a viable outsourcing location?
• How successful have your company’s efforts been?
• And if you haven’t tried the US yet, then why not?

It’s more important than ever to gather the candid views of business executives like yourself to understand how the USA can be more competitive as a global location for accessing talent and improving business operations.

As a thank you for your time, we will share an executive report of the study findings and give you the option of entering you into the prize draw for an iPad3.

Please click here to start the survey which’ll take 15 minutes to complete

Your candid views and experiences are always so important in supporting the research we conduct at HfS, so please spend a few minutes with us on such a hot topic.

We are also grateful to our friends at the Sourcing Interests Group for supporting the study.

Posted in : Business Process Outsourcing (BPO), IT Outsourcing / IT Services, Sourcing Locations

However you like to wile away those sultry summer hours, we can be pretty sure it’s not dreaming up merit badges for outsourcers.  Maybe it’s time to introduce our notorious Deborah Kops to the local bridge club, or growing vegetables or something….”Lord, no!” I hear you cry.  In that case, take it away DK…

Outsourcing Provider Merit Badges

Given the demographics of the industry, it’s probably as stretch to think that many of us know that this year marks the 100^th anniversary of the founding of the Girl Scouts. As someone who was a Girl Scout until she was 18 (because co-ed canoe trips were relatively unsupervised—I was not good at knots), and still has her badge sash, I think it’s only appropriate that outsourcing providers have their very own merit badges, too.

Let’s cut the hype about training and certifications—the reality of the outsourcing industry is that you’re not truly a member of the club until you’ve earned sufficient stripes to join the pantheon of those who are battered, bruised, tested and tried—and inextricably dedicated to making outsourcing the model of choice for global—and not-so-global–enterprises everywhere for functions big and small; core or non-core; rules-based and complex;  offshore, nearshore, and even onshore;  automated or leveraging labor arbitrage, regardless of domain.

So, providers of the world, examine your experience to see if you’ve earned Deborah’s top 10 merit badges. And if you can suggest some that I’ve missed, I’ll ask my personal badge maker to get busy.

BID FODDER BADGE The award of the bid fodder badge signifies that the client that you’ve chased for nigh on a year was just using you to put leverage on his current provider to shape up, give some concessions and slash their FTE cost to an under market rate. Or said client had a provider all picked out and opened up the bid process merely to keep the procurement police at bay.

Then, when the inevitable happens, you suffer the agony of hearing all the internal “I told you sos” as you try to justify the fact that you’ve just spent precious time and resource, not to mention trotted out your company’s great and good to the final presentation. After you earn this badge, pick yourself out of the slough of despond, make a promise that you’ll listen to your intuition next time, and only pursue client opportunities without entrenched incumbents or that are not pre-sold.

SCOPE SHRINKAGE BADGE The RFP clearly set forth that the client was outsourcing end to-end in virtually every geography, encompassing all business lines. But by the time the down select numbers three, what was purported to be a cool 1000 heads transitioning over three years shrunk down to accounts payable in Scandinavia (with the promise of untold sourcing riches if it is deemed by the businesses…at their sole discretion… to be successful.)

Talk about throwing a spanner into the works. The infrastructure guys have factored the deal into their facility plans. Your investors finally believe your sales and marketing strategy is paying off. Your CEO has all but named the deal in the last earnings call. Your spouse has emotionally spent the commission. And you’re left with a little pilot with fees that don’t even cover the cost of the pursuit. Consider yourself as having entered the big leagues. Wear your badge with pride.

M&A SURVIVAL BADGE In an era of consolidation, surviving the marriage of two provider cultures and coming on top—or at least with your position intact—takes a rare set of skills:  exuding just the right amount of enthusiasm for what may seem a nonsensical combination; (privately) mourning the loss of the culture you loved; and backing the right political horse, all the while subtly threatening to move on if you don’t get what you want without looking like you’re not a team player.

If your company is the conqueror, being nice to your new colleagues after trashing them in the marketplace when they were the worthy competition earns you credits. And if you are one of the vanquished, the speed with which you are able to pick up the new corporate speak helps you attain the prize.

If you gain responsibility and scope (not to mention a fatter paycheck) through the integration, give yourself 10 extra points. But if the deal is a temporary setback and puts you out on the street, remember that M&A in the outsourcing world is now a fact of life, and ensure you suss out the intentions of your next employer….and vest immediately if you are sold…as you proudly display your badge.

CLIENT MERGER BADGE After a year’s pursuit, and eons getting the operations to green on the dashboard, suddenly your client merges with or is acquired by another company, either with a full complement of provider relationships, or an entrenched cultural aversion to anything ending in –sourcing. And it appears that your client is not calling the shots.

No matter that you’ve saved enough dosh for the client to purchase the Queen Mary II, or that there’s so much satisfaction with your delivery that the relationship manager sings your praises at every SSON or IAOP event; your contract appears to be the outsourcing equivalent of a marked man.

So you enter the survival fray, looking for chinks in the other providers’ armor. You tout out the big guns to demonstrate your undying commitment to the relationship. You start preparing a “compelling value proposition” to proactively head off a client loss. And you put the screws on the delivery team, telling them that 99 percentile performance is now a given. But either the other provider is best golfing buddies with the surviving CEO, or there’s no way on God’s green earth that the company will export jobs offshore, even if it means 200% savings. Give yourself extra credit for a valiant effort, keep in touch with your client because he or she is sure to end up as a buyer elsewhere, and sew on your merged out of a deal badge.

NEW MAN-AT-THE-TOP-BADGE With the first generation of outsourcing leaders now counting their millions while they jet around to play on the world’s leading golf courses, their successors are a very different kettle of fish. The pioneers are now out of the business; the new breed of leader has very different pressures: avoiding being acquired; containing cost in the face of competition and currency fluctuations; satisfying increasingly demanding shareholders; and creating differentiation in a market where clients believe that most cats are black in the night.

Whether the new man has is a superb politician, having been groomed internally to take on a new job, or brought in from the outside without any direct experience in the business (the so-called “strategic” hire), change is inevitable. Those changes could range from the seemingly ridiculous such as forbidding business class travel on 15 hour flights—to the sublime, moving into new lines of business with nary a credential in the entire company. And if the new chief is an outsider, you can bet your booties that he’ll soon transport the culture (and henchmen) from his previous gig.

If you can keep your place in the new org chart, immediately award yourself the badge. It means that you either have 1), a godfather somewhere in the business; 2), good karma; or 3), pictures of someone important. However, if you see the handwriting on the wall soon after he moves into the corner office, and are able to land a better position without being obvious about your loss of power and prestige, you win, too.

MUSICAL CHAIRS BADGE You’ve done such a stellar job selling, solutioning or operating in the insurance domain that management thinks you can learn shipping overnight. Or perhaps you’ve done a great job in India, but someone in power thinks it’s time for you to deliver the same results wearing a Boston Red Sox cap.

Your boss, working on the premise that smart people in the outsourcing industry can do anything, calls your bluff and asks you to open up the Kazakhstani market. He preys on your fealty, reminding you that he accommodated your request to transfer for personal reasons several years ago, and dangles a few hundred shares in front of you while he not-so-subtly tells you that you will be the spoiler in his game of musical chairs. Get the badge either for being a good sport, performing with grace in the new role, or being able to keep your old job despite the fact that you played havoc with the new organizational schema.

10 MONTHS AWAY-FROM-HOME-BADGE Nothing screams outsourcing bona fides like spending the best part of the year solutioning or transitioning in any country where a visa is required. No matter where you are stationed, chances are your company will land a deal big enough to demand the personal sacrifice of spending untold months in a hotel room, serviced apartment or guest house where 1), you cannot swing a cat without hitting the walls; 2), the color beige drives you to drink; 3), there are no English channels on the telly; or 4), mosquitoes have taken up occupancy. And although the company is allegedly family friendly, you’re only permitted one week off every 2 months.

Give yourself points for missing your wedding anniversary or your child’s first day of school, while still being on good terms with your spouse. Add an extra credit if you get a local colleague to help you track down a peace offering in the form of a good deal on  an I-Pad for your teen or diamond earrings for your wife. Tick the days off in your diary while you recite the mantra “never again.” And fasten the badge in a very prominent place, sending the message that you already gave at the office.

ECONOMIZE FOR THE GOOD OF THE COMPANY BADGE As outsourcing margins decline, your management starts to scrutinize every cost. Getting permission to travel or use your cell phone overseas requires something akin to divine intervention. Business class travel (except for a select few) and staying at run-of-the-mill Marriotts are now seen as unjustifiable and unaffordable luxuries. No matter that you’re expected to roll off 15 hour flights with barely sufficient time to wash up in an airport lounge before making that make-or-break client presentation, or the guest house’s air conditioning hasn’t worked for two years—it’s considered inappropriate to waste the company’s money on frivolous expenditures.

In the name of economy, open reqs to fill authorized client service positions, even when paid for by the client, must go to the top of the house before HR will start the search. Attending an industry event means completing a 20 page business case. Making do with a laptop that still runs Windows 2003 is good for the soul.

If you can hold your tongue while the boss spends lots of dosh branding a sports event, or after you find out the ice sculptures at the client event cost $2500 each, you’ve earned your badge. Better yet, if you can get a $125 per night deal in a New York hotel without bedbugs, you’re an economizer extraordinaire.

FUN TIMES WITH PROCUREMENT BADGE 100 page RFIs sent to 14 providers in order to be “compliant.” Best and final bids required without any discussion of actual scope. Questions about your company that are so invasive they ought to be covered by the Official Secrets Act. e-Auctions that make a mockery out of any solutioning process. These stories…and more…render outsourcing truths much stranger than fiction. Whether the procurement department is actually driving the deal, or is carefully monitoring the sourcing leader’s every move, understanding that their modus operandi sometimes can be summed up as the three Cs—control, cutting cost, and compliance—will help you get through selection and contract.

Give yourself credit if you find a way to skirt around the procurement rules without being obvious. Pat yourself on the back if your partner in crime is the sourcing leader. Pump the air if you are still on speaking terms with the procurement manager when the contract is signed (after all, he’ll be monitoring contract compliance going forward). And praise the client’s procurement department to the skies when you write up the case study.

INABILITY TO PLEASE THE CLIENT BADGE The transition is spot on target, or the operating stats meet all SLAs. There’s barely a stray yellow on a very green dashboard. The delivery team’s attrition is within normal bounds. Yet no matter what you do, short of getting on your hands and knees outside the client’s office (or giving him your firstborn), nothing is right. Or ever will be. Either the client team is playing a very elaborate and expensive game of gotcha, or they hold a residual grudge that the good old days of internal command and control are long gone.

Your account leader dreads every Monday morning’s email abuse, and threatens to quit every Tuesday. Supervisors shudder when the client makes his floor rounds during the quarterly business review. Staff refuses assignment to the client, believing that is the equivalent of the career kiss of death.

If you survive a QBR without losing flesh, it’s five points towards your badge. If your boss is entirely sympathetic and does not blame you, award yourself another five. If the client gives your firm a glowing reference, understand that the sun, moon and stars are aligned for the first time in 20 years, and don’t tempt fate by asking again. If the client renews and expands scope, praise whichever deity you believe in. (And move ever so deftly to get reassigned to another account.)

Deborah Kops, Research Fellow, HfS Research… thriving on meritocracy

How many of these badges have you earned? Perhaps it’s time to set up a scout troop replete with a Provider Pledge (paraphrasing the Girl Scout pledge). So hand over heart  and repeat after me, “On my honor, I will try, to do my duty to attract and scale good clients, to deliver value better, faster and cheaper, with transparency and good governance for all.”

Stay tuned for the Client’s Outsourcing Merit Badges. You deserve them as well.

Deborah Kops is Research Fellow, HfS Research (click here for bio)
This blog and its content is copyright of Sourcing Change © 2012. All rights reserved.

Posted in : Business Process Outsourcing (BPO), IT Outsourcing / IT Services