IT Services & Outsourcing

Preparing the new organization for life after outsourcing

Phil Fersht — Wed, 23 Jul 2008 15:30:49 +0000

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

Outsourcing highlights for June

Phil Fersht — Wed, 18 Jun 2008 15:00:28 +0000

Click on these links for recent happenings in the outsourcing world:

A final word from India: moving beyond “old BPO”

Musings from abroad: Futuristic BPO

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

NASSCOM dispatch: “We’re now past the era of BPO” (Pramod Bhasin)

How do you feel about Human Resource Professional Organizations?

Musings from abroad… dispatch #3… Indian drivers

BPO: It’s all about taking ownership to get results

IBM/Bristol-Meyers: a shot in the arm for HRO

Finance and Accounting BPO continues its growth path

HRO Redux: 8/10 buyers don’t look back, while the vendors look ahead

BPO partnerships are opportunistic, rarely strategic

Will the EDS acquisition spark a BPO feeding frenzy?

Can this Marriage Be Saved?

Bored? Look no further

HP/EDS redux

Whom do you trust for balanced outsourcing advice?

Is it time to dump the term “outsourcing”?

Are we reaching an inflection point of business globalization?

Quest for an Organic Approach to Offshore Outsourcing

Is the sub-prime lending crisis placing outsourcing engagements on the backburner, or providing an impetus to proceed faster?

Cost-cutting measures for troubled companies in these tough economic times

Blog-culture is ripping up the rule book for the outsourcing services and technology media industry

Taking control of your vendor relationship

Can outsourcing be a catalyst for driving down the cost of healthcare?

Will the EDS acquisition spark a feeding frenzy?

Phil Fersht — Sun, 18 May 2008 19:36:42 +0000

So HP acquired EDS. Wow. Biggest services news since HP acquired Compaq a week before 9/11? In my opinion it is, anyway.

We discussed here in January the issue of consolidation among large outsourcing suppliers, and the general view was one that we would be unlikely to see acquisition among services firms that were similar in nature:

Outsourcers like to acquire firms that bring something new to the table to enhance their outsourcing offerings - for example new technologies, or a niche expertise that gives them competitive advantage. Too many large outsourcers are too similar… they overlap too much and a merger would often end up as an unprofitable exercise and result in a mass exodus of key talent.

So the HP / EDS merger goes against the grain. We noted some specific areas where there are some strong complimentary offerings - namely in BPO areas - but the overwhelming motive for the merger is one of scale and going-big to compete more effectively with IBM. The increased BPO delivery capability also puts HP on a firmer footing against the other global BPOs, namely Accenture, ACS, Capgemini, Infosys, Wipro and TCS. The newly-merged entity needs to examine how it builds out its business consulting and transformation expertise further if it wants to challenge the both IBM and Accenture’s BPO market leadership.

This merger-event could change the game considerably, and we could see other BPO suppliers to re-evaluate their acquisition strategies to generate more global scale and increase their client-bases. With the cost of client acquisition becoming increasingly prohibitive, the valuations of services firms decreasing in these market conditions, and the desire of many enterprises to move into more rapid outsourcing engagements, the leading vendors need additional scale and capacity. So this begs the question whether we could see some similar-scale outsourcing services mergers in the near-term?

Please vote on the toolbar to the left whom you think is likely to be acquired over the next year - you can have up to three choices.

Whom do you trust for balanced outsourcing advice?

Phil Fersht — Sat, 10 May 2008 16:04:49 +0000

I wrote a piece entitled “Blog-culture is ripping up the rule book for the outsourcing services and technology media industry” a few weeks’ ago which raised a few eyebrows. OK, it’s a litttle biased and I was on my high-horse, but it did raise several questions on where people go to get balanced, insightful information on the outsourcing industry that they can rely on. So, please vote here for your preferred three information outlets on the poll to the left side-bar. And please be honest