And That’s the Way It Is | Sherpas in Blue Shirts

When I think about the ITO and BPO industries today, I can’t help thinking about Walter Cronkite, the American journalist who anchored the CBS Evening News from 1962-1981. He was known as the most trusted man in America. Back in those days there were no 24-hour cable TV news stations and no Internet — just three TV networks with nightly news broadcasts. A lot of perspectives were hatched in those newsrooms, and broadcast journalists were very influential. They were the ones to watch when we wanted to know what was happening, the meaning behind events and the implications going forward.

The same things could be said of the ITO and BPO industry analysts a few years ago. They were the purveyors of wisdom about such information as business marketplace trends, whether or not to outsource or how to achieve greater ROI from IT and business process management and improvement strategies.

But both the TV news and the ITO / BPO industries evolved to the point where the pundits’ influence is limited. They still have an audience, but the market has segmented into more defined topical areas.

Industry analysts and experts talking about IT strategies and BPO today talk to a pretty small crowd comprised of mostly junior people, many of whom are in the provider/vendor community rather than decision makers in the buyer community. Pundits talking about shared services may have a broader crowd, but it’s also mostly junior folks. Often it’s mostly the industry talking to itself, not talking to its customers, which is similar to the news pundits all tracking what each other say on TV and Internet news these days.

America experienced this phenomenon in dramatic action in its last presidential election. The Obama campaign was able to segment the market much more precisely than the Romney campaign because they understood the need to directly address various market segments about their specific problems. We can assume that Walter Cronkite reporting the results of that election would have ended that story the same way he ended each of his news broadcasts: “And that’s the way it was.”

The folks who control the purse strings in ITO and BPO decisions no longer look to analysts and pundits who don’t talk about specific business problems. Industry perspectives broadcast to a wide targeted market no longer yield access to real business opportunities for service providers and vendors. The opportunities lie in providers and vendors having many mini conversations with much more tightly defined subgroups of the market.

And that’s the way it is.

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