Tag: benchmarking

WaterSprint or AgileFall: Implementing Packaged Apps in Contemporary Times | Sherpas in Blue Shirts

During a recent next-generation packaged application benchmarking project for one of our Tier 1 clients, one point jumped out at us: service providers and product vendors have started moving away from the traditional waterfall approach to an adaptive hybrid agile-waterfall approach while solutioning for packaged application deployments.

Is an Agile-Led Methodology Needed?

You’re probably wondering if an agile-led methodology is necessary, since packaged applications have inbuilt configurations that are aligned to industry best practices. The resounding answer is yes, as packaged apps projects have been victims of scope creep, cost overruns, missed deadlines, objective mismatches, and a host of other issues. A good share of these failures can be attributed to the customization requirements that were built using a traditional implementation approach, which encouraged a siloed and non-continuous way of working.

How is the Hybrid Approach Effective?

The effectiveness of the hybrid approach can be easily gauged through a mix of waterfall and agile-based SLAs and KPIs. We are seeing that using the hybrid waterfall-agile methodology significantly improves traditional packaged apps implementation project SLAs such as defect leakage, defect density, and schedule and cost adherence. And agile KPIs such as velocity rate, work-focus factor, and percent of story-point accuracy help keep track of team productivity, and enable the team to track deviations from standard configurations.

One major adopter of the hybrid approach is SAP, which has refurbished its implementation framework with the introduction of its agile-based Activate methodology for the SAP S/4 HANA suite. While SAP has retained the strong elements of the traditional Accelerated SAP (ASAP) waterfall methodology, it has changed its approach from a template-led long duration blueprinting exercise to a fit-gap analysis for processes configured on a cloud-based solution. Additionally, it no longer runs the realization phase in a linear fashion, wherein testing is performed only after complete configuration or customization is done. Instead, testing resources are onboarded as soon as the sprint starts, and implementation effectiveness is gauged right from the word “go.”

Many service providers and product vendors are also following this same approach in some form and fashion, particularly in the realization phase.

What’s the Value of Shifting to a Hybrid Agile Approach?

It helps enterprises streamline their journey to becoming a truly agile organization, and enables a better end-user experience, as improved SLAs underscore better service delivery. And it helps service providers enhance their brand reputation, capture more business, and shed the tag of being old school and monolithic in their implementation approach.

If you are interested in learning more about the impact of the hybrid waterfall methodology on project timelines, average daily rate, overall TCV, contractual SLAs, and risk alleviation mechanisms, please feel free to reach out to me at [email protected]. You can also visit our Benchmarking page.

NASSCOM 2017 BPM Summit — October 12-13 | Event

Chief Research Guru Michel Janssen will be a featured speaker at the NASSCOM 2017 BPM Summit event held on September 12-13 in Bangalore, India.

Michel’s will deliver a presentation titled, Benchmarking’s Role in Creating Best-in-Class Digital Enterprises.

In this session, attendees will learn the results from Everest Group’s soon-to-be-release Best-in-Class Enterprise Digital Analysis, which quantifies with real data what it takes to achieve best-in-class – in terms of outcomes, as well as the corresponding capabilities needed to deploy digital strategies and initiatives. The session will include specific metrics on how much best-in-class enterprises invest in digital initiatives; how much the spend is growing; and how best to measure success.

In addition to sharing the Top 10 capabilities that the Best-in-Class have that their peers do not, we’ll bring the data to life with case studies of enterprises that have achieved the Best-in-Class ranking. Finally, we’ll share insights on the opportunities these digital journeys are creating for the BPS industry and how the industry needs to evolve to capitalize on the need of enterprises to meet today’s digital benchmark.

When
October 12-13, 2017

Where
Hotel Leela Palace
Bangalore, India

Speaker
Michel Janssen, Chief Research Guru, Everest Group

Learn more and register to attend

ProcureCon Total Talent Management — September 20-21 | Event

Vice President of Research Julian Herbert will be a key speaker at ProcureCon’s Total Talent Management event held on September 20-21 in Amsterdam.

In Julian’s presentation, How to Ensure Your Talent Acquisition Model is Ready for the Future, he will discuss how this future-readiness can be achieved through benchmarking and how the process involves:

  • Looking beyond cost to focus on talent through assessment of solution elements, leverage of technology, SLA/KPI comparison around adequacy and stringency, future orientation, and the ability to innovate
  • Assessment of the ability to deliver total talent acquisition from a process, people, and technology perspective, both from enterprise and service provider readiness angles
  • A comprehensive, multi-dimensional assessment that looks at partnerships holistically
  • Contextualized assessment instead of a one-size-fits-all approach

Attendees will learn the importance of looking beyond the cost of services delivered by MSP and RPO providers, if they want to have a talent acquisition model which is in-tune with the latest economic, demographic, and technological changes.

When
September 20-21, 2017

Where
Novotel Amsterdam City

Speaker
Julian Herbert, Research Vice President, Everest Group

Learn more and register

How Digital is Disrupting Today’s Outsourcing Contracts: Don’t Get Distracted by the Marketing Numbers | In the News

“One is the loneliest number,” according to American rock band Three Dog Night. The number 13 strikes fear in some people, while others consider it lucky.

Everest Group believes that the number 40 is the most convoluted and questionable in the global services industry. Why? Because it’s the “un-benchmarked benchmark” percentage service providers often promise their enterprise clients and prospects for automation-led gains.

Read more in PULSE Magazine

Preparing for End of Term: Key Considerations for Today’s Dynamic Environment | Virtual Roundtable

Thursday, July 27, 2017 | 11:00 a.m. – 12:30 a.m. ET

Preparing an end-of-term strategy involves critical analysis around renew versus recompete versus re-sourcing. Current Market dynamics, including the rotation to digital and geopolitical unrest, are significantly impacting the market, making contracting even more complicated.

To help sourcing and procurement executives nearing end of term on major outsourced contracts, this session will provide an update on current market trends and practices, followed by a group discussion among participants on how they are approaching their sourcing strategies and negotiations, including key considerations and best practices, among other topics.
Who Should Attend
Global services sourcing and procurement executives in enterprises nearing end of term in their key outsourced contracts.

What You Will Learn
This session will help participants develop an understanding of the key considerations, best practices, and next-generation digital levers to manage end-of-term planning and execution.

Request to attend

ProcureCon Indirect Europe — April 4-6 | Event

Join Everest Group leaders at ProcureCon Indirect Europe, April 4-6.  Everest Group Research Vice President Julian Herbert will lead a presentation titled, Using Contextualized Benchmarking to get the Best Value from Your Supplier Relationships. The discussion will highlight the following essential need-to-knows:

  • How an understanding of Total Cost of Ownership can benefit your outsourced procurement functions
  • How to take an outsourced relationship from a tactical cost reduction exercise to strategic value proposition
  • How to avoid cutting corners, which may adversely impact your organization

When:
April 4-6, 2017

Where:
Amsterdam, Netherlands
Park Plaza, Amsterdam Airport

Everest Group speakers:
Julian Herbert
Vice President, Research, Everest Group

Learn more

Deep Discounts in IT Infrastructure Services Pricing – Is This the New Normal? | Sherpas in Blue Shirts

The IT services industry is going through a tremendous change with the onset of new technologies, geo-political uncertainty, and disruption of traditional business models.

Deal renewals have fallen significantly, leading to intense price competition among service providers trying to meet their top-line revenue expectations. As expected, the pricing pressure is higher in some of the more commoditized services such as IT Infrastructure operations. Indeed, recent Engagement Reviews for numerous North American clients suggests that pricing for some mature services within the IT infrastructure domain, such as storage and backup management, server management, and database management, has fallen significantly. Our analysis suggests that the Indian service providers have upped their ante, and have become even more competitive in terms of pricing.

As a case in point, the per instance pricing for virtual server management has fallen by 25-35 percent over the last 12 months. The fall in pricing for some other resource units has been even steeper.

Services Pricing 2017

What’s driving these deeply reduced prices? Numerous solution-related changes have impacted pricing dynamics in this market.

  • Maturity of internal automation/autonomics capabilities of service providers
    While these have largely been buzzwords in the last 12-18 months, we believe that the impact of some of these investments has finally started to show up in deals.
  • Further improvement of internal productivity
    Just when we thought that the solution effort ratios such as servers managed per FTE, databases managed per FTE, etc., had reached their true, optimum levels, we have seen instances of further changes in some of these solution metrics. Some of these can potentially be attributed to the above point.
  • Complete offshore operations
    We are seeing more and more deals where 100 percent offshore delivery is the norm. This enables service providers to quote very competitive per unit pricing. It will be interesting to observe how this metric changes going forward if new regulations come into play by the new U.S. president’s administration.
  • Increased competition, smaller deal sizes, and deal durations
    The past 12 months have been difficult for most IT service providers, with increasing competitive intensity and delayed enterprise decision making due to geo-political uncertainty. As a result, they are going all guns blazing to win new accounts.

Most of this low pricing has been observed in new deal situations. We have seen very few occurrences of providers proactively reducing prices in existing deals, unless faced with the threat of the deal going into a competitive situation. Of course, it would be unfair to expect service providers to reduce unit prices significantly in all deals, since each deal level pricing scenario is very contextual and a deeper analysis of the underlying environment is warranted.

Have you had discussions with your infrastructure provider about recalibrating prices?

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

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