Category: Uncategorized

Is Your GIC the Secret Weapon for Digital Enablement? | Sherpas in Blue Shirts

You might recall, back in December we identified digital agility as a key 2018 initiative. In that blog, we discussed how you can create business value by making things easy, reliable, and fast for your customers. The question I would ask GIC organizations for 2018: In realizing that goal, are you part of the problem? Or are you part of the solution?

Our research, Digital Maturity in GICs | Pinnacle Model™ Assessment 2018, seeks to answer those questions.

Most GICs started small and expanded over time as they proved their value. Now that most GICs have realized the fundamental benefits of labor savings, quality and process improvement, and – in some cases – business outcome improvement, it’s time for them to look to their next act.

Our central thesis is that a GIC can be a critical driver in building and running new digital competencies. But we want to hear from you about the functions and processes that are getting the most attention and investment. Which digital technologies are you focusing their efforts on? And what capabilities did you deploy to build out these capabilities?

There are plenty of digital surveys that you can participate in, so – why Everest Group’s? Because we take a different approach that results in more meaningful, useful outputs. Our Pinnacle Model™ approach asks questions about what the very best GICs are doing in terms of real impact and then correlate the capabilities required to achieve those results. And we go beyond the online survey, talking with some respondents to understand their journeys – what worked and what didn’t.

With that information in hand, we identify a set of Pinnacle Practices™ that you can consider deploying in your GIC.

Yes, there is a ton of hype around digital; let’s get beyond the headlines and talk outcomes and practices in your GIC.

Take the survey

Upskilling and Reskilling in Shared Services Centres — December 11 | Event

Vice President of Research Anurag Srivastava will be a key speaker at a Poland-based event on December 11: Skills for the Future – Upskilling and Reskilling in Shared Services Centres.

At this event, Anurag will discuss the challenges and opportunities facing shared services centres (SSCs) in Poland in terms of human capital development. The discussions will be based on findings from a recent survey carried out by Everest Group in SSCs across Poland, India and the Philippines.

When
December 11, 2017

Where
British Embassy, Warsaw

Speaker
Anurag Srivastava, Research Vice President, Everest Group

Attendance to this event is by invitation only

Analyst Relations Newsletter Q4 2017 | Key Highlights from Custom Research

Case Study I: A Europe-headquartered Financial services company with Global operations engaged Everest Group to benchmark their current Global ITO/BPO service provider rate cards

Client overview and background: The client manages a sourcing portfolio involving multiple IT-BPO contractual relationships with a global footprint. The benchmarking scope included functions like Software Engineering, Testing, Project Office, Business Analysis, Program Management within IT. Procurement, Finance and Accounting and Client Service within BPO. The scope also included providing guidance on factors impacting rates such as Best-in-class staffing pyramids, Best-in-class offshore ratios, volume based price discounting, PMO/Governance fees overheads, Continuous improvement charters and Language based price premiums.
Our approach: Everest Group undertook the following activities to perform a thorough benchmarking assessment:

  • Map client role nomenclatures to industry standard roles with years of experience and job descriptions
  • Identify market proxies and perform normalization removing outliers
  • Provide detailed role level benchmarks by geography and identify role-wise savings potential

Everest Group also provided comprehensive guidance on additional solution parameters based on best-in-class contracts.

Client benefits: The benchmarking study highlighted a set of roles and associated delivery locations where the current pricing was much higher than the market benchmarks. This enabled them to prioritize meaningful and effective negotiations with the respective vendors to align their contracted rates with market norms.

Case Study II: Everest Group provided market price benchmarks for Digital Services, for a US based service provider as part of their overall Go-to-Market strategy for Digital Services

Client overview and background: The client, a global information technology services company headquartered in the US sought to assess its price competitiveness across Digital services to support its ‘Price-to-Win” mandate along the following components:

  • Rate Card benchmarking: FTE-based price benchmarking for Mobility, Cloud, Analytics, Big Data, RPA, AI, Machine Learning, Digital Program Management, Customer Experience, eCommerce, Content Management Systems, IOT and User Design
  • Additional Pursuit Metrics: IP Commercialization trends, Offshore leverage, Team composition, Service Level metrics, Price premium for Digital Skills, etc.

Our approach: Everest Group leveraged its direct benchmarking approach to develop benchmarks for various FTE roles for key geographies like US, UK, India, China, Germany, etc. The benchmarks were based on Everest Group led live deal rate card data in the last 12 months. To provide comprehensive and market competitive benchmarks, we considered a large set of service providers across four categories: Indian, Global, Boutique and Digital Agency firms and provided comprehensive benchmarks across each of the categories. Similarly, we provided targeted guidance on the additional pursuit metrics mentioned above.

Client benefits: Price benchmarks enabled the service provider to assess its price competitiveness across multiple role types and geographies. Additional analysis further enabled the service provider to gain deeper understanding of nomenclatures and solution-related parameters, to eventually align their commercial proposition with industry standards.

Managing Demand Variation in Outsourcing Contracts | Sherpas in Blue Shirts

Given how long the outsourcing model has had to mature, the lion’s share of “traditional” (read: not including digital labor) contracts today are realizing the expected benefits for both buyers and providers. But when unplanned levels of variation in the internal demand for outsourced services enter the picture, serious quality, satisfaction, and cost issues can quickly rear their ugly heads.

Effective demand management – whatever the reason for the unplanned level – entails meeting internal customers’ demand and service level expectations while maintaining adequate control over the total outsourced spend.

Everest Group recommends buyers embrace three methods for managing demand variation in outsourcing contracts.

Periodic adjustment of baseline or band pricing
Buyers typically opt for baseline or banded pricing to manage volume changes. While both mechanisms provide for some demand flexibility, they expose service provider risk and trigger a risk premium in service pricing. And although volume baseline/band definition is standard in new or renewed contracts, high variation or significant demand shifts can render them obsolete. A solution to these challenges is establishment of a periodic pricing adjustment in which the buyer and service provider agree to review volume in specified periods and set the baseline at the six-month rolling average.

Appropriate outsourcing agreement structuring and clear resource unit definitions
In order for an outsourcing agreement to be mutually beneficial, the buyer and service provider need to share responsibility for demand management. Devising an agreement structure and resource unit definitions that increase the service provider’s stake in managing demand is a way to accomplish this goal. For example:

Comprehensive benchmarking of both per-unit prices and pricing metrics
When demand variation is high, or when volumes consistently increase and decrease, benchmarking per-unit prices alone can result in sub-optimal financial performance for the buyer. Comprehensive benchmarking, including both the per-unit price and the relevant pricing metrics as below, is a valuable solution.

Baseline pricing metrics

  • Dead-band range and dead-band price
  • ARC and RRC ranges and rates

Banded pricing metrics

  • Band ranges
  • Unit changes in each band

By employing these mechanisms to manage demand variation, buyers and suppliers can avoid issues in their relationship, achieve the full potential of the contract, and experience a win-win situation.

To learn more, please read Everest Group’s viewpoint entitled, “Demand Variation in Output-Based Pricing Contracts.”

Analyst Relations Newsletter Q3 2017 | Key Highlights from Custom Research

Case Study I: Everest Group supported the India GIC of a global top-5 technology company in its growth plans for software product engineering teams leveraging digital skills

Client overview and background: As the client was preparing for growth of its India delivery center, it was evaluating opportunities to expand the scope of services delivered in the GIC, especially in software products based on new horizon skills areas (e.g., cloud, mobility, SoA, big data and analytics, design-thinking, customer-centric engineering). The client sought support in identification and prioritization of key talent investment areas involving product engineering based on expected future business needs and market evidence of successful delivery models, capabilities, and services maturity at GICs of peer technology/internet software companies.

Our approach: Everest Group assessed the current talent model and team capabilities in product engineering skills at the client GIC and also conducted a detailed market assessment of how GICs at peer companies are leveraging the India delivery centers (scale, penetration, breadth, and complexity, and level of ownership of global service delivery for product development and digital skills). We identified gaps in the talent model and skills-sets at the client GIC across specific roles, skill-sets, and level of ownership/maturity. Everest Group presented perspectives on key thrust areas for investment and industry momentum in skills/role development by peer GICs. We also identified growth opportunities for client and provided best-in-class examples of increasing ownership and growing talent on niche skills (e.g., data scientists).

Client benefits: Everest Group identified and prioritized skill-areas for investment based on gaps in the client’s current delivery talent/skills portfolio for software product engineering and level of maturity achieved at peer GICs. Through a series of discussions with the client’s leadership in India and the U.S., Everest Group guided the client’s internal thinking on how to grow talent for niche digital skills and establish product engineering teams with higher level of global product ownership.

Case Study II: Everest Group Supported a large European engineering company in an assessment of the talent landscape in the Indian city of Bangalore. This was for a new engineering and R&D center the firm wanted to set up in the city

Client overview and background: The client was facing challenges in hiring mid-level talent in its home markets owing to reducing enrolments in STEM. It was looking to offshore high-end design, engineering, and innovation work and identified Bangalore as a location for setting up its in-house / shared services center. To be better prepared for this, the client wanted a comprehensive assessment of the talent landscape in the city across the following aspects: availability of talent across 7 functional areas, key competitors for talent (including Indian engineering companies), future outlook for talent sustainability, workforce preferences for office location within the city, employee value drivers in choosing an employer, and benchmarking of compensation and benefits.

Our approach: Everest Group conducted in-depth desk research to size talent (at both entry- and experienced-levels) across the 7 functions in focus. This was followed by primary research with engineering companies operating in Bangalore, recruiters, industry experts, and a cross-section of employees to analyze aspects such as future outlook for talent sustainability, employee value drivers, and workforce preferences. Finally, we conducted a compensation and benefits benchmarking assessment in collaboration with a recruitment firm.

Client benefits: The client leveraged this in-depth study to set design parameters for its new delivery center. The mapping of functional areas by scalability and level of possible congestion in the future helped identify possible constraints and frame appropriate mitigation mechanisms (e.g., invest in training, move talent from home market). Our research also enabled the client identify the sources for talent (universities, competitors, other adjacent industries) and the optimum level of compensation/benefits across functional areas and seniority. Finally, the assessment on employee value drivers helped the client finalize the optimum value proposition for candidates.

Analyst Relations Newsletter Q2 2017: Key Highlights from Custom Research

Key highlights from recent custom research projects by Everest Group

 

Case #1: One of the top 5 U.S. payers engaged Everest Group to benchmark its existing BPO vendor portfolio and contrast their solution offerings

Everest Group’s approach: Everest Group evaluated each of the existing vendors against the best-in-class service providers to evaluate the key offerings, price points, digital leverage, etc. We also looked at how the top payers in the market were sourcing similar pieces with these vendors and which pieces fall under lack of capability vs. negotiation arbitrage.

Client benefits: Everest Group helped the payer to look at both end-of-term and mid-term contracts from a more critical lens and restructure them to enhance value and derive better gains from the existing relationships where possible.

Case #2: Helped one of the world’s largest providers of IT services to healthcare providers identify hospital system-level business development opportunities in the target area of value-based care

Client overview and background: One of the world’s largest providers of IT services to healthcare providers engaged Everest Group to identify priority business development accounts in hospital-level systems and to prioritize these for their value-based care offering

Everest Group’s approach: Everest Group developed a sophisticated account prioritization model and leveraged its market reach to identify account level opportunities. Everest Group assessed over 4000 hospital systems and developed a scoring model to rank them on their value-based care performance and technology enablement.

Client benefits: Everest Group helped the client’s sales people develop actionable insights for their pursuit strategy in the value-based care space. This analysis further helped our client develop a definitive assessment of a key target segment and drill down to account-level insights that enhance the effectiveness of their sales efforts.

Request a briefing with our experts to discuss the 2022 key issues presented in our 12 days of insights.

Request a briefing with our experts to discuss our 2022 key issues

How can we engage?

Please let us know how we can help you on your journey.

Contact Us

  • Please review our Privacy Notice and check the box below to consent to the use of Personal Data that you provide.