Experts in the global services terrain

What if a service provider could build itself from scratch based on the learnings from the past two decades? Liberty Source, launched in 2013 as an impact sourcing provider, is trying to do just that in the highly competitive finance & accounting (F&A) outsourcing market. It has agreed to share its story with us as its business continues to scale.

Our first discussion with Steve Hosley, CEO of Liberty Source, provided an overview of their journey and in the second and third discussion we focused on the talent model. Our fourth  discussion focused on the principles behind the culture of Liberty Source. We continue the discussion on culture in this fifth blog.

Eric: In an earlier conversation, you described the culture that Liberty Source has intentionally adopted and why it has chosen to focus so much on culture. I would like to understand more about what Liberty Source has specifically done to structurally build the principles into how Liberty Source operates. What are some of those elements that have been designed into Liberty Source’s operating model?

Steve: The cornerstone of the culture program, and first group we kicked off, was our affinity group, LSVS (Liberty Source Veteran and Spouse) team. This group drives all of our community outreach activities as well as our internal engagement programs. It also allows spouses and veterans the ability to mentor other Liberty Source employees. A big part of ensuring Liberty Source continues to effectively scale, resides in our ability to access top talent, so the LSVS team created a Liberty Source Ambassador program, which is a volunteer rotational assignment where our spouses and veterans, represent Liberty Source at recruiting events on bases and within the community. Although we have a standard recruiting process, we encourage our spouses and veterans to simply be authentic and talk with folks, telling their Liberty Source story. Empowering our employees in this capacity is powerful and engaging. To hear spouses speak of their specific roles at Liberty Source and then speak about the company at the enterprise level is powerful and in the process, that simple exchange has placed their personal credibility and brand upon the enterprise brand of Liberty Source. It also is a big reason that, even after two years, we are still very proud that over 50% of our new hires come from internal referrals.

A second team we established is focused on getting the right tools and establishing the environment. We have an open, productive, and inviting work environment and our shipmates have all the necessary tools to be successful in their job. We are a laptop-driven open environment with no offices, which promotes our employees to exercise one of our operating principles of “Own it,” allowing folks to simply get up from their seat and walk over to another team to get something solved. Pretty basic, but once your employees feel empowered, this basic open concept can be a powerful instrument. Our operations center resides in Virginia, where southern hospitality is alive and well. This polite nature proved to be problematic at times because our shipmates were not culturally equipped to tell a fellow shipmate that they could not talk right now because they were in the middle of something. This committee developed flags for each desk and when the flag is up it signifies the “door is closed and I am busy.” This indicator helps prevent culturally awkward interactions.

Eric: Great idea! I need to get a flag for my office door to keep our CEO away while I am trying to get work done. Beyond the affinity and the committee for design of the environment, are there other elements you have designed into the operating model?

Steve: Yes, there are three other elements that come to mind – a training coalition, our monthly employee communication, and a medals and ribbons program.

Eric: Would you mind describing those in some more detail?

Steve: Certainly. At Liberty Source we have a standard training program that we continue to enhance each year in support of the skills we deem e necessary today and in the future. This group is chartered with developing a supplemental training program focused on tracking and managing on-the-job training experiences and skill achievements. They have targeted a few key areas, roles, and skills, and they work with the folks currently performing the functions to practice and formulate a way to convey what you do to others. They then schedule and arrange job shadowing opportunities for fellow shipmates to learn from each other. This group also finds opportunities for Liberty Source employees to exercise a development skill in “friendly” non-client facing situations, such as putting into practice their PMM certification by running and leading our annual holiday party. Although the military community embraces formalized classroom certificate driven training, and Liberty Source has its share of that, we believe the classroom work needs to be reinforced or validated from seeing and doing real work and achieving and demonstrating tangible skill development. In the works right now, this team is developing a new program to target and track when shipmates demonstrate skill achievement through the attainment of visible badges or metals. This will allow our folks to track their development inside formal classroom settings as well as skill proficiency achievements outside the classroom.

From a communications perspective, our communications team ensures that we have established outlets that allow personal and professional information to be shared on a regular basis among shipmates. One of the key instruments of this team is the monthly LSVS outreach publication that profiles individuals, accomplishments, what’s ahead, and how to get involved.  This group also orchestrates quarterly skip level meetings to make sure there is a transparent exchange of information.

The last item I mentioned was medals and ribbons. In the military, they clearly know the value and importance of recognizing individuals for great accomplishments. The commercial world can learn much from the military in this area. What we have learned is that the way you deliver recognition of achievement is actually just as important as the reward that may come with it. Taking the time and thinking through the interaction and exchange of the actual recognition and reward is very meaningful. One of our biggest events is when we reach the first anniversary of a new client. We invite the client to our Operations Center located at Fort Monroe in Virginia for a formal “coin” ceremony. We have a special coin minted that honors the client and its dedicated delivery team at Liberty Source. In the ceremony, we “coin” the Liberty Source employees in honor of their hard work and dedication, which includes transitioning, launching, stabilizing, and delivering for the client day to day. In the same ceremony, we have our spouses and veterans “coin” their client counterparts and key client personnel in recognition of their thanks for all the support over the past year but, even most importantly, for their commitment and belief in the spouses and veteran community. Needless to say this is a powerful recognition event on many levels.

Libert Source Coin

Eric: Very interesting to hear these examples and how the alignment to the military culture has provided an opportunity to extend culture design into business operations. Thanks again for sharing, and I look forward to our next discussion. Might you be ready to explain the automation program and learnings for that effort?

Steve: I think we are about ready to share our learnings. We have automated processed at two different clients and are capturing some powerful learnings. Let’s speak in a few months and we will be happy to share these.




ITaaS is a game-changer, a radically different way to manage IT. Here’s what you need to consider before making the switch.

If you’ve read a couple of my blogs about the IT-as-a-Service model, you probably realize it’s a game-changer. To refresh your memory, it maximizes the value IT delivers because it aligns IT much closer with the business – a top objective for most CIOs today. It also enables agility, facilitates a consumption-based cost model and on-demand management. You probably think switching to ITaaS sounds wonderful. But you’re also likely asking, “What’s the catch?”

Machiavelli wrote, “It must be considered that there is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things.” And IT-as-a-Service is a new order of things. It’s a radically different way to manage IT.

Read more at CIO online.

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What if a service provider could build itself from scratch based on the learnings from the past two decades? Liberty Source, launched in 2013 as an impact sourcing provider, is trying to do just that in the highly competitive finance & accounting (F&A) outsourcing market. It has agreed to share its story with us as its business continues to scale.

Our first discussion with Steve Hosley, CEO of Liberty Source, provided an overview of their journey and in the second and third discussion we focused on the talent model. We now turn our attention to the culture of Liberty Source and how it has been designed to align to the needs of clients and the military population that comprises its talent pool.

Classic business philosophy tells us (or at least the professors in b-school told us) that the organizational model should be developed to support the business strategy – organization (skills, culture, etc.) follows strategy, strategy doesn’t follow organization.

In a recent discussion with Steve, I began to realize that this fairly simple idea probably has its limits. In a fast-changing world, can complex organizations actually be fluidly re-aligned to deal with each change in the market and the associated business implications? Might this be especially challenging for knowledge economy business models in which people are most of the differentiating asset? And might a differentiated organizational model actually be an advantage to executing a new strategy over potential competition?

Liberty Source offers a unique perspective into how an organizational model can inform and guide business strategy. As a Public-Benefit Corporation (PBC), Liberty Source exists to generate business profits, but its articles of incorporation also require it to do that in a manner that creates a social benefit. Liberty Source chose to focus its social benefit on providing commercial opportunities to an often overlooked population of skilled U.S. military spouses and veterans. As a PBC, it must regularly report on its social impact (in this case its people) and, therefore, constantly think about its market and strategic opportunities from the perspective of how it impacts its people.

Before we turn to Steve’s perspectives on how this impacts its culture, I also point you to a recent speech by Bill Gross, a leading Silicon Valley entrepreneur and founder of Idealab, a leading start-up incubator. Bill has been associated with many start-ups such as, NetZero, eToys, Picasa,, and CitySearch and has a privileged perspective on what makes for a successful business. As he explains in the video below, he conducted an analysis of start-ups with which Idealab was involved plus other start-ups where he has knowledge of their histories. In his analysis of which factors most contribute to success, he found that the uniqueness of the idea was actually only the third most important factor, followed by the quality of the business model at fourth. The most important factor was timing (not too early, not too late) and then second the team who establishes the culture. If you can’t spare the seven minutes to watch the entire video, check-out the summary of this study at 3:30.

Eric: Steve, how did Liberty Source develop its culture and in what ways did its PBC status shape that culture?

Steve: Eric, when the Founder of Liberty Source and I were envisioning Liberty Source back in 2013 we had not seen the enlightening analysis and supporting TED talk from Bill Gross but it is reassuring to know that people still matter in the success of a company.

When we were planning out the design of Liberty Source, we knew that forming a company around a delivery model that centered on U.S. Military spouses and Veterans had an inherent advantage because by definition this community had a pre-disposition to serve a greater purpose.  It is for this reason that we believe that our PBC (Public Benefit Corporation) indicator can actually translate into a competitive advantage if the right culture and environment is established.

Employee engagement is something that comes naturally for this community. When creating Liberty Source, we followed a step-wise path to ensure our PBC became a position of strength in the market and not a burden or obligation.

Eric: What were those key steps?

Steve: The first step was to reconnect human capital to the BPO industry. At Liberty Source one of our market differentiators revolves around our ability to pivot with our clients, remaining flexible to their changing businesses. We believed from the start that as the rate of change increasingly impacts various industries and business models, traditional BPO relationships will no longer be resilient to keep pace. In the design of the new Liberty Source delivery model we consciously fused our human capital strategy with our go-to-market strategy.

A large portion of our delivery team demographic is U.S. military spouses. This community, by definition, is somewhat transient due to that fact that their U.S. military active service members regularly get assigned to new bases. Spouses regularly find themselves in situations where they need to quickly plan family moves and when they arrive at their new base, figure out the new geographic setting, many times without the support of their service member because he or she may be on deployment. Adaptability and the fortitude to figure things out are assets this community generally brings with them when they arrive at Liberty Source. We have found that these life skills and the unique life lens and perspective, each of them possesses, translate well into the fluid commercial business space.

Step 2 is to ensure employees feel engaged and valued. I lived in Texas many years ago and regularly attended Friday night high school football. I remember how overwhelming the atmosphere was when I attended my first football game in Texas. In Texas, football is a production not just a game. There are football players, cheerleaders, a flag team, a cowboy team, the band, a national anthem trio, among others I am sure. I mentioned to a local Texan that was sitting next to our family how amazed I was by how large the football production had become since I was up in school in Connecticut. I stated that there must be over 250 kids involved in this “production” and wasn’t that a bit over the top. I will never forget his response. He said “each one of those kids out there has a purpose, and purpose is what it is all about.” Always love the simple wisdom that comes from a Texan! It made total sense to me, 250 kids each with their personal connection to their own smaller group, with all the groups connected on Friday night aimed at a common goal of representing their school brand and producing a win. The connection to the localized group as well as the larger high school enterprise is what companies pay millions for each year to ensure positive “Employee Engagement” measures.

Eric: Can you give some specific examples of the principles Liberty Source has adopted to align to this vision for the culture?

Steve: Over the years I created a number of captive shared service organizations as well as running a billion dollar outsourcing business and although each organization may have resided in different industries and focused on different services, each of them shared one common thread: people.

At Liberty Source we created a unique culture that blends elements from the U.S. military community as well as adopting successful operating practices that aided in the impressive industrialization of the BPO industry over the past 15 years. This is evident in our Operating Principles that echo “know your numbers” from the BPO industry and “find a swim buddy” from the U.S. military. Other structural design elements that aid in creating the right culture are: we believe in “coaching moments” not “PIP”ing moments. We treat career advancement of our shipmates inside and outside of the company as a community celebration. Our shipmates require unfiltered straight talk and our all hands meeting are family meetings or video conferences. Impersonal CEO communication emails do not work.

Lastly, company gatherings always include family. We learned early on that there is a reason that when the military has an event or ceremony spouses and family members are always included. At Liberty Source, we understand that the power of the culture we are building rests on all the supporting family members so their continued support of Liberty Source is integral to achieving our goals.

These groups are enabled through the mentoring and coaching provided by a Chief Ambassador of Culture who connects our leadership team to their needs and translates engagement in more real time fashion. Many companies would rest on their laurels that affinity groups are meeting and engaging for themselves. We’ve flipped the script and extended the reach of affinity groups into a career development and engagement model that advances our capability as a business too. The biggest goal of our culture program is to ensure that all of our employees have an opportunity to have a bigger role in the Liberty Source journey and our brand than simply their day-to-day duties at their desks satisfying their clients.

Eric: That is a meaningful goal and in contrast to the more limited focus on operations that permeates many BPO organizations. Where did this come from and how are you acting on it?

Steve: This goal emanates from the belief that if folks can understand the greater purpose of an organization and they are invested in it, the resulting culture will be a powerful retention and engagement tool.

So why do we think culture is important? I guess I could say in order to help us comply with our PBC indicator, but the real reason is that we think that in order to be responsive to our clients changing environments, we need a workforce that is resilient, empowered, invested and does not freeze each time they experience a new request or change. An engaged, tight, and personally invested workforce will have the confidence and capability to pivot, adapt, and be flexible, because they know that leadership will be honest with them and that they can lean on all their fellow Liberty Source shipmates, with the understanding that someone will always have their back. That lack of fear, coupled with empowerment in a workforce is a powerful force that we think all organizations can learn from.

Eric: Steve, thanks for sharing this context with me – it really resonates with my personal experiences at college with a strong military tradition and my first job after graduate school. Services is all about getting the hearts and minds of people focused on serving clients and Liberty Sources has a great model in place.

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While Finance & Accounting (F&A) is one of the most outsourced functions, it is also one of the first to be delivered through offshore global in-house centers (GICs) on a large scale.  Indeed, the GIC market for F&A delivery (by FTEs) now comprises ~13 percent of the overall GIC market. During this insourcing process, the F&A function has grown by leaps and bounds, and has evolved along the following key themes.

GICs are gradually moving from the functional definition of F&A to an end-to-end definition

The functional definition of F&A has been evolving gradually, giving way to an outcome-focused approach in which organizations are looking to break down functional silos and achieve effective process delivery. F&A processes are no longer being treated as stand-alone activities with independent objectives. Instead, they now have a broader mandate of being delivered in tandem with related procurement and supply chain activities. For instance, accounts payable is both a transactional F&A process and a transactional procurement process. It has  been “repackaged” under the Procure-to-Pay (P2P) definition, which takes into account end-to-end delivery of accounts payable, travel and expenses, invoice processing, Requisition-to-PO, sourcing support, and catalog management. Similarly, Order-to-Cash (O2C) and Record-to-Report (R2R) are end-to-end processes now included within the F&A definition. Thus, mature GICs are offering seamless delivery of F&A processes with limited duplication of work.

end-to-end process F&A pic

GICs are increasingly leveraging nearshore locations for F&A delivery

Nearshore locations, such as Central and Eastern Europe (CEE) and Latin America, are increasingly playing a greater role in enterprises’ GIC location footprint for F&A delivery. Apart from time zone advantages and cultural affinity with onshore geographies, nearshore locations offer language capabilities that are essential for delivery to multiple onshore locations. For instance, Poland is being leveraged to serve Western and Eastern European countries due to the availability of language and finance talent. Nearshore locations, particularly in the CEE region, are also being leveraged to deliver niche/complex F&A work.

Companies that have chosen the GIC delivery model prefer to keep judgment-intensive F&A functions in-house

Many companies that have adopted the GIC model extensively prefer to deliver judgment-intensive F&A processes through the same in-house model, rather than outsourcing them. One of the key reasons for this preference is that the nature of work requires greater interaction with senior management.

Companies have evolved to a global delivery model for F&A services

Although many parent organizations initially considered F&A a shared function characterized by shared services centers across various regions, they are increasingly looking to break the regional silos and deliver F&A through global delivery centers, which work toward specific business outcomes. Many companies have been able to derive significant cost savings from this transformation through staff reductions, simplification of processes, and integration across functional silos in the global delivery model.

 Multiple GICs have been transformed into Centers of Excellence (COEs) for delivering specific capabilities within F&A

 COEs are expected to push beyond stipulated delivery mandates by unilaterally focusing their talent and investment on specific aspects of delivery, and transforming them to help derive additional value for the parent organization. In F&A, analytics and reporting COEs are being created to deliver analytics processes such as management reporting. By making use of data modeling and information analysis, these COEs can help the parent company make impactful decisions.

In addition to the above themes, GIC-based F&A delivery is witnessing critical changes in terms of operating model characteristics. GICs are fairly aggressively adopting analytics to reduce costs and increase operations profitability. They are also running pilot programs to measure the cost advantages offered by technologies such as Robotic Process Automation (RPA) for transactional F&A processes (primarily, accounts receivable, accounts payable, and general ledger). Although cost savings are the immediate motivation for most GICs, RPA will eventually become an intrinsic part of F&A delivery, as it will impact location decisions and future offshoring of work.

Everest Group has conducted a deep-dive analysis of this market, covering the current F&A delivery landscape from GICs, the evolution of delivery across key themes, descriptions of F&A process maturity achieved by GICs, and key operating model elements.

For more details, please see Everest Group’s latest report, “Finance & Accounting Delivery from GICs: Trusted Partner to Move F&A Beyond Delivery to Value Creation.”


DevOps is changing the services industry, especially in the people model. Here’s an important question for service providers in the Digital Age: Can you achieve the same impact in a distributed DevOps environment as you can in a collocated DevOps environment? Clearly, because of where the industry makes money, the industry would like the answer to be distributed. It’s a well-known fact that industry profit margins are much higher when services are delivered out of low-cost locations. But let’s look at this issue more closely.

The focus of DevOps is aligning services with the business and achieving speed (that is, agility and continuous improvement). This suggests that the most effective way to do DevOps is to collocate a provider’s engineers with the business or in close proximity to the business. In the distributed model, providers typically get around this by having a portion of the engineers (the product manager) sit with the business and the engineers sit offshore.

Yet, as we look at the early and best use cases – for example, Microsoft Azure – we find that companies prefer to collocate the product manager and the engineers in the same small team. The collocated model stresses the need for speed as the core of the move to DevOps. There is no doubt companies can reduce costs by moving people offshore; but do they give speed and business alignment when they do that?

When the product manager is a customer or is believed by the customer to be essential to the customer’s knowledge, that makes the practicality of the offshore model more difficult. In many cases, some companies will choose not to take the work offshore. All this portends to significant changes in how customers and providers define and manage their talent model in a DevOps environment.

Having said that, there simply isn’t enough talent in North America and Europe to move all the application development people on shore. So customers and providers will need to come to some accommodation. It’s clear that the services industry will need to break up work differently including customers having more responsibility and accountability offshore than historically.

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