Tag

global services

From Captive to Catalyst: The Next Milestone in the Global In-house Center Evolution Story | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

At a conference I attended recently on the role of global in-house centers (GICs) in digital and RPA, one of the speakers asked everyone to imagine what their organizations would look like in the future. The answers from a room full of enterprise and GIC leaders were varied and fascinating. My personal favorite was the one where robots will manage all forms of work while people relax on a beach, soaking up the sun, and sipping their piña coladas. Tempting as that sounds, I don’t expect it to happen anytime soon.

But what is happening now is a flurry of changes in the business environment globally. Amidst recent geopolitical developments in the U.S. and U.K., increasing talks of protectionist policies, the advancement of RPA and other service optimization technologies, and regulatory pressures affecting the global services sector, GICs and shared services centers find themselves at a crossroads. As the global services sector moves from an arbitrage first to a digital first delivery model, GICs have an opportunity to break away from the orthodox boundaries by taking the road less traveled, and enhance their role in enterprises’ global sourcing strategy.

Everest Group has seen first hand the evolving role of GICs, which has expanded beyond providing low- cost delivery to being agents of change – or catalysts – for enterprises’ back- and middle-office services.

Now, GICs are at an inflection point in their evolution journey, well positioned to take on this enhanced role driven by: increased endorsement from the enterprise and the shift towards insourcing; a strong foundation and ability to offer an insider’s view; tight integration with the existing core business; and strong adjacency with existing focus on driving efficiency and optimization.

What does the future of GICs look like?

Global Services - CatalystTo successfully undertake changes within their enterprises and redefine their role from captive to catalyst, GICs need to:

  1. Drive business impact and thought leadership
  2. Develop global leaders and talent/skills
  3. Play a pivotal role in the transformation of processes and service delivery
  4. Lead organizations through digital disruptions in global services.

Here are Everest Group’s recommendations on how GICs can capitalize on this opportunity:

  • Redefine the art of the possible, and adopt a business outcome-oriented mindset, which is significantly different from the current delivery mindset
  • Identify and prioritize investments, such as their choice of functional and technology segments, and the best approach to gaining more than just incremental growth
  • Change their talent model (e.g., hire for learnability, strengthen culture of innovation) and operating model (e.g., different onshore-offshore collaboration models due to agile/DevOps) to catalyze the digital agenda.

Our newly renamed CatalystTM subscription research program (formerly known as Global Sourcing) provides GICs and enterprise clients with actionable insights to navigate through the evolutionary journey from captive to catalyst. Benefits of a Catalyst subscription include:

  • Industry-leading research and viewpoints on multiple topics relevant to GIC market
  • One-on-one briefings with Everest Group analysts and SMEs
  • Exclusive invitations to GIC events – including webinars, roundtables, and virtual networking sessions – organized by Everest Group

Learn more about our work in the GIC space, and see details about our Catalyst research program.

Cost Impact of Immigration and Visa Reform to US Customers Using Offshore Services | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

Most US organizations have substantially used offshore service providers in IT and business process outsourcing (BPO) to drive cost reduction. But there is currently a great deal of discussion in Congress and the Trump Administration – as well as actions taken by Executive Orders in the last seven days – about changing the H-1B and L1 visas. The changes affect the offshoring services provider as well as US enterprise customers that utilize offshored services. What are the impending impacts?

My company collaborates with Rod Bourgeois, head of research and consulting at DeepDive Equity Research, and together we have followed the proposed immigration and visa reform. Since 2013, I’ve blogged many times about the potential impacts. Rod’s January 25, 2017 report, “IT Services: Update on Visa-Reform Risks Facing Indian Outsourcers,” highlights recent proposals. The essence: it now looks like real change is on its way.

Read more at Peter’s Forbes blog

Ascender’s Acquisition of NGA’s ANZ Business: Consolidation in a Maturing Market | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

On 31 January 2017, Australia-based Ascender and NGA Human Resources announced that Ascender had acquired NGA’s Australia and New Zealand business. Part of the agreement is a partnership between the two companies to deliver payroll and HR services solutions for the ANZ region, ensuring a seamless solution for NGA HR’s global payroll and HR clients. The deal makes Ascender one of the largest HR and Payroll providers in the ANZ and APAC region.

What are the implications of the deal?

For NGA:

  • Global deals with ANZ components will continue unaffected, as Ascender will serve as a partner provider in the region with no disruption to existing operations
  • NGA will aim to use a partnership-based approach for multi-country deals originating in the ANZ region. It will no longer be active in the single country payroll market in ANZ.

For Ascender:

  • Its single country capability and reach in the ANZ region will get a boost with the addition of NGA’s services delivery and technology capabilities, specifically the Preceda and PS Enterprise HCM platforms
  • It will have access to a new set of clients in ANZ, with an opportunity to sell into other regions of APAC through the newly acquired client portfolio. This could potentially increase its multi country payroll outsourcing (MCPO) market penetration in the APAC region.

Of course, as with any deal of this type, there are numerous things those in the region should watch out for.

First, NGA and Ascender will be looking to forge a partnership in a way that is beneficial to both parties beyond the immediate operational need. The scope and extent of this new partnership will evolve and take shape as the dust settles. It remains to be seen what form it will take, especially in light of Ascender’s recent entry into the Europe-based Payroll Services Alliance, wherein eight major payroll service companies have bundled their services into a unified offering that consists of strong local expertise and services, supplemented by coordination and integration at an international level.

As far as technology is concerned, with NGA’s PS Enterprise and Preceda HCM platforms coming into Ascender’s fold as part of the acquisition, Ascender will likely seek to integrate the different system capabilities under one brand over time. As with a lot of private equity-backed acquisitions, since the focus will be on improving margins, we are likely to see more investment in consolidating and improving technology, driving automation, and increasing self-service functionality.

Although the APAC market continues to experience relatively high growth rates – 7-9% in single country payroll outsourcing and 23-25% in MCPO – the region is fairly complex, and each country requires a distinct strategy to ensure sustainable growth. For instance, while India requires a heavily price-sensitive services sales approach, a technology-driven approach works better in Australia.

With the APAC region requiring a great deal of management attention and local presence to drive continued success, global providers’ APAC arms tend to be private equity acquisition targets. Indeed, while Western economy-based global players don’t necessarily have the focus to negotiate the uniqueness of the APAC region’s HR services and payroll requirements, private equity can certainly help bring that focus to the table. For example, Ascender is backed by a private equity-led consortium, and just two years ago, private equity firm Everstone Capital bought out Aon Hewitt’s APAC business, (renamed Excelity Global).

While not all will be private equity-driven, we do anticipate more acquisitions and consolidation in this space in the APAC region as the market matures, particularly in geographic markets that are fragmented, with no clear leader in sight.

Outsourcing Trends to Watch in 2017 | In the News

By | In The News

This year, we saw outsourcing integration challenges multiply, production workloads and enterprise systems hit the cloud, and security hit the top of the agenda.

So what’s ahead for 2017? Uncertainty for one thing. Industry watchers expect a number of shifts in the IT and business process services space — not least of which will be the initiation of more flexible outsourcing terms as the world watches and waits to see what happens once president elect Donald Trump takes office and Brexit takes hold.

Read more

The Philippine Political Environment’s Impact on Global Services | Virtual Roundtable

By | Webinars

Tuesday, December 13, 2016 | 10:00 a.m. – 11:30 a.m. ET

The recent changes in the Philippines’ political climate have raised alarm in the IT-BPM industry, both in the Philippines and the U.S. Questions abound as to how potential changes in the relationship between the Philippines and the U.S. will impact business relationships that many have come to rely upon.

Everest Group will offer a brief overview of the potential impact on the country’s IT-BPM industry; the group will then spend the bulk of the time discussing how they are thinking about how best to prepare and plan for potential impacts.

Who Should Attend
Senior global services executives and decision makers involved in outsourcing and delivery locations strategy interested in the impact of political changes in the Philippines on the global services industry and how those changes might impact their own strategies.

What You Will Learn
This session will help participants develop an understanding of the potential impact on the IT-BPM industry in Philippines and share thoughts around strategies going forward.

Please note that this event has already occurred.

Dominating themes at the #NASSCOM Design and Engineering Summit 2016 | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

Digital technologies are fundamentally changing the demand ethos of the US$75 billion Engineering and Research and Development (ER&D) global sourcing market, which is expected to grow at a CAGR of more than 18 percent over the next five years. With rapidly evolving consumer needs, an increase in global regulatory pressures, the rise of the shared economy, increasingly complex security needs, and technology’s shift from enabler to disruptor, following are the major themes I expect to dominate the NASSCOM Design and Engineering Summit 2016, which is being held in Bangalore on October 5 and 6:

    1. The connected digital ecosystems: The proliferation of smart devices and radical improvement in connectivity infrastructure are shaping the evolving digital ecosystem of everything. Orchestrating this connected digital ecosystem and creating products that tap into it are creating a new demand portfolio of ER&D services across industries. Think rapid consumerization in the healthcare industry with increasing use of connected smart medical devices, the connected and autonomous vehicles defining the future of mobility in the shared economy, or the convergence of machine-to-machine (M2M) technologies and advanced analytics driving the industrial 4.0 revolution.
    2. Designing for the future: Enterprises must understand the needs of tomorrow’s customers, and will need to push the boundaries of innovation and design thinking to engineer products that are at the intersection of leveraging cutting edge technologies and re-imagining processes and business models.
    3. Smart, smarter, and smartest: The rise of cognitive computing technologies has pushed the boundaries of process and task automation to create smart products. Research advances in the field of Artificial Intelligence (AI), machine learning, and edge computing will drive development of products that dramatically improve the user experience, and provide convenience beyond expectations for consumers and employees alike. This creates demand for a talent model with hybrid skills of product engineering and design, domain knowledge, and ability to leverage cognitive technologies.
    4. Making sense of data: Enterprises are collecting a lot of data through a multitude of external and internal data sources, and are looking at how to enhance product design and engineering processes, reduce costs, improve quality, and meet evolving user expectations. Enterprises in the retail, defense, media, and financial services industries have been at the forefront of using data and analytics to answer these questions. Demand from these industries is driven from adoption of further sophisticated analytics initiatives that helps deliver competitive advantage. Industries including manufacturing, energy, telecoms, and healthcare and life sciences are rapidly adopting big data and analytics technologies.
    5. Real use cases beyond the cool stuff of AR/VR: Augmented reality and virtual reality technologies have great potential in areas such as remote monitoring and predictive maintenance, training, and simulated testing environments. Expect to hear more use cases for AR and VR technologies.
    6. Software-defined everything: “Software eats everything” across all industries – software-defined infrastructure, software-defined manufacturing, software-defined networking, software-defined datacenters, and so on. The delivery of software product as-a-service, the ability to remotely support and maintain customer premise equipment, and the increasing demand for configurable over customized software products are creating a new demand paradigm for ER&D services in the software products industry.
    7. Time-to-market: Speed is the new currency in the product engineering world. Sourcing has enabled enterprises not just to reduce costs but to drive agility and flexibility to respond to market volatility and constantly changing consumer demands. As technology becomes core to all activities, concepts such as agile and DevOps are becoming relevant across the ER&D services industry value chain.
    8. Standards, security, and compliance: Security is among three priorities for all C-suite executives globally. In the age of connected digital ecosystems, building security into product design is becoming an absolute necessity. Compliance but is a critical component of the demand driver for the ER&D services industry.

I look forward to interesting discussions on these and other topics with the engineering services enterprises and vendors during the #NASSCOM Design and Engineering Summit. If you’re there in person, feel free to contact me or my colleagues H Karthik and Bhawesh Tiwari.

Click here to read about Everest Group’s latest research on the engineering services global talent spot, and here, here, and here to check out detailed insights from this research.

NASSCOM Design and Engineering Summit 2016