At HfS, we’ve had enough of service providers and their clients raving about how bloody wonderful they all are.
“We have a world-class global delivery operation that guarantees our clients first transformation, then innovation”, said one provider. Yep – we were actually told that!
“Our experience with XXXXX was amazing. They were so responsive and helped us transform our global processes in a way we could never have dreamt when we started out”, said the CFO of a Fortune 1000 outsourcing client. You have to wonder where his next job is being primed…
“We have this incredible culture of driving value to our clients, by making our employees feel empowered to find new thresholds of performance for our clients everyday.” Don’t these guys have the worst attrition in the business?
Meanwhile, one SVP of sourcing (after a few bevvies) did confess to us recently, “I have 5 providers and they’re all c**p. They all oversell and under-deliver. I have given up on any of them doing anything close to what I want them to do, so spend my time squeezing their rates. If they’re going to deliver c**p, we might was well pay them c**p.” Well said, old chap! Another pint?
And other buyer (this one actually sober) stated “If my account rep turns up one more time in my office trying to sell me something, I am going to get his entry card to our building taken away”. Uh, oh…
Yes, folks, it’s time to separate the puff from reality, so HfS Research has finally come up with a spectacular new methodology that – once and for all – will expose this behaviour to industry in all its naked glory…
Introducing the HfS Research Painsharing Paradox
Yes, forget gainsharing folks, this is all about painsharing. We’ve deployed an air-tight methodology for placing those pesky providers in their true position in industry, based on their acumen to serve up fluffy puff, correlated by their expertise in messing up all their client engagements:
The Painsharing Paradox Methodology
A Painsharing Paradox (PP) starts its life with a market definition and inclusion criteria. It’s proposed to our group of chief analysts, who are in charge of determining what markets are PP-worthy, whether or not the market is defined in a reasonable way, and so forth. In other words, analysts can’t decide to arbitrarily write a PP, and there’s oversight and a planning process, and an editorial calendar that lays out PP publication schedules for the entire year.
The rest is simple. We figure out which providers have the biggest budgets, and then produce a draft PP – the bigger the marketing budget, the further they are positioned over to the upper-right corner of the grid. Then the bidding process starts. Depending on how much we like them, how many first class boondoggles we’ve been treated to, and how much hard cash they’re prepared to pony up, we’ll maneuver them down the grid towards that hallowed lower-left quadrant, where everyone wants to be.
However, if we feel the provider hasn’t done enough to make us feel special, or once subjected us to two horrible days in a Red Roof Inn in New Jersey (which stays long in the memory), or – heaven forbid – didn’t stump up a nice sum of dough for our coffers, we may decide to leave them stranded in that dreaded right hand corner – sharing the pain of humiliation, with the pain they have subjected on their clients.
And that’s the Paradox… stay tuned for our first one, coming soon. And providers, we have a special PayPal account set up especially for your generation donations – simply email us at [email protected] to get started. Happy painsharing, folks 🙂
Oh, and by the way….
Please tell us you didn't fall for it again?
And while we’re reminiscing about falling for April Fools’ gags, here is 2010’s classic:
Horses for Sources to advise Obama administration on offshore outsourcing
Oh, and here’s 2009’s which I really hope you didn’t fall for too:
Horses Exclusive: Obama to ban offshore outsourcing
The question I now have is whether we have anyone here who’s been suckered by all three…
Posted in : Absolutely Meaningless Comedy
Phil:
Interesting, but totally biased in favor of outsourcing clients. We are therefore contemplating the creation of a PP for outsourcing research firms.
I suggest we plan a phone call to discuss what it will take to keep HfSResearch out of our first quadrant…
Lucky Balaraman
CEO
TMG, India
Providers of engineering, architectural and publishing services
http://TheMagnumGroup.net
/////////////////
Nice try on April 1st Phil…I remember what you pulled off last year 🙂
You had me going right up until the Red Roof Inn 🙂
Phil,
I promised myself after last year, I wouldn’t fall for another one of these – and you HAD me for a while there 🙂
Stephen
Nice, four box matrix….it’s “magical”. Why use Paypal, brown paper bags can’t be hacked?
Cheers.
Brilliant! While this makes for an excellent April Fools’ gag, there are a lot of “hidden truths” here 🙂
G.
April Fool!
I love this! Please tell me it’s not an April’s Fool?
Liam
Well…Well..Well…Let the truth be told!
Interesting, as I am sure if we checked this correlates with the buy side equivalent chart. On the Y axis “Ability to remove all differentiation from provider bids through the procurement process” and on the X axis “Ability to mis-inform stakeholders and clients”. What was that Paypal account number again.
Phil & Co.
this is some funny stuff, because as in most funny things there is more than a kernel of truth in it. While there are some well-publicized blow-ups in the outsourcing industry, most service delivery failures (SDFs) are hushed up by the outsourcing firms legal and risk management teams. Getting more transparency into these service delivery failures would do more to move this market forward than the sweeping of problems under the rug. Even inside of the outsourcing organizations, these SDFs are hushed up which has a couple effects:
1. The outsourcer is blissfully unaware of their own shortcomings
2. The outsourcing organization does not really do the root cause analysis required to prevent future failures
Part 2 : )
Sure, the buyers organization usually shares blame, some of which is pointed out in the previous posts (e.g., remove differentiation from provider bids) some of which isn’t (e.g., failure to invest in the required credible leadership for effective change management). My pov is that the buyer’s are a pretty “diffuse” group of stakeholders and that the real focus on improving this would come from the research side – with some reluctant support from the outsourcers themselves.
There are some examples of firms in financial research that make a nice pot of money for themselves by publishing truly independent research. Whichever research firm takes this on, may not make any friends at some of the large outsourcers in the short-term (except the few that truly have a Continuous Improvement culture), but they’ll come around in the long-term and said research firm would have a role in shaping the landscape of the industry. Do you know any that’d be up to the challenge & potential rewards? : )
Good luck.
BTW: What is the paypal account number to move down & to the left again?
Needs a 3rd dimension: Ability to lock in clients. Created by weighing three core aspects:
1) Termination Fee Revenue Bonus Index: The percentage of the termination fee allocated to revenue used by business development staff incentive compensation.
2) Termination Fee Multiple: Termination Fees/Total Contract Value. Bonus points for regularly achieving a 2.0 or greater.
3) Humiliation Factor: Total Fees Paid to Lawyers to negotiate the deal and then terminate it (including litigation and negotiations during contract term)/averaged monthly contract fees. 2x points awarded to legal fees paid to interpret terms written by lawyers.
All true. But I see both sides. That is–the manufacturers who outsource are looking to save money–no matter what veneer they put on their RPQ to the 3rd parties, the one with the lowest bid get the job. And no matter what innovations the outsourcing industry achieves it becomes part of the base service very quickly and it is hard for them to recover their investment.
Having said that there are some good organizations and some bad ones. And I would like to see an objective rating somehow. This would be very useful for the marketplace.
Ps. I don’t like the Red Roof Inn much; but even a Ritz should not sway the objective evaluation of the company being evaluated.
Good luck on your questions!
[…] firm, Horses for Sources, introduced a new concept, called “painsharing,” that seems appropriate to mention in the context of IT […]
I wonder how many of the worst performing suppliers are on the Whitehouse’s short list of suppliers. Given the April 2010 HFS announcement of their appointment as advisor to the President on outsourcing matters, can you spill the beans?
very interesting concept, keeping it real. At Oracle, we have a teeny weeny marketing budget, so we expect to shine on this one (LOL). One suggestion – consider inverting the access, so that the dogs are in the bottom quadrant of the chart.
[…] is well known for taking an irreverent look at the outsourcing industry. Today’s post: Painsharing exposed: HfS to reveal the worst performers in the outsourcing industry hits new highs – or is it lows – in developing a magical looking matrix via which it will call out […]
I will be the first to point out this is April 1st. Of course, if this is real, then I am even more the April Fool.
Nice try Phil! Another creative post on April 1st! 🙂
Nice one,and interesting that one the same day Gartner announced a new magic quadrant:
http://blogs.gartner.com/mark_mcdonald/2011/04/01/gartner-announces-a-new-magic-quadrant/
Also, the competition isn’t standing still with the Forrrester acquisition:
http://analystrelations.org/2011/04/01/seismic-consolidation-in-the-analyst-landscape/
[…] (Cross-posted @ Horses for Sources) […]
Phil, this is so funny. Adding to the methodology, each featured participant would select a minimum of 5 references for their competitors, and none for itself.
On a much more serious note, I can imagine a board game borrowing some of this ideas and some others from Monopoly to create the ultimate must play smash hit for tech marketeers, buyers and analysts alike.
THANKS FOR BEING GOOD SPORTS EVERYONE! THIS IS DEFINITELY AN APRIL FOOL 🙂
However, there were a few hidden truths in there somewhere 😉
PF
phil, let the truth set us all free 🙂
[…] Painsharing exposed: HfS to reveal the worst performers in the outsourcing industry […]
[…] Phil did not just get this out of the blue (print), he has been diligently studying the Painsharing Paradox for […]
[…] Phil did not just get this out of the blue (print), he has been diligently studying the Painsharing Paradox for […]
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