журнал Iaop май июнь 2015

PULSE FAST COMPANYDigital Technologies Change the Game p28-31

ISSUE 17 | MAY/JUNE 2015 THE MAGAZINE DRIVEN BY & FOR THE OUTSOURCING PROFESSIONALPUBLISHED BY WWW.IAOP.ORG

CORPORATE SOCIAL RESPONSIBILITY ISS

UE

View from the C-Suite on Government Sourcing p46-53

FRESH FACES

U.S. Emerges for Domestic Sourcing p56-57

HOT SPOT

Plus: Impact sourcIng Is the New norm

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ISSUE 17 | MAY / JUNE 2015

PULSE ISSUE 17 | MAY / JUNE 2015

C O R P O R AT E S O C I A L R E S P O N S I B I L I T Y I S S U E

HOT SPOTSourcing in the States

p56-57Member Survey Results,

Profiles and More p32-45

Georgia’s Collaborative Chief

p46-53

C-SUITE

F U RT H E R R E A D I N G

CSR Special Report

- Results from the 2014 CSR Survey ......................p34-37

- Impact Sourcing Provider Profiles ......................p38-39

- Case Study Lessons from Liberty Source and @WalmartLabs ............................................p40-43

- Interview with the GOSRIA Award Winner ISS ...........................................................p44-45

Thought Leadership from IAOP Contributors

- Are the Robots Really Coming? ...........................p14-21

- Cloud Computing Challenges .............................p22-27

- Rewriting David vs. Goliath in Digital Tech ......................................................p28-31

- Viewpoint on Public Sector Outsourcing .........................................................p54-55

THE MAGAZINE DRIVEN BY & FOR THE OUTSOURCING PROFESSIONAL

CORPORATE SOCIALRESPONSIBILITY ISSUE

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4 PULSE May/June 2015

C O R P O R AT E S O C I A L R E S P O N S I B I L I T Y I S S U E

R E G U L A R F E AT U R E S

Message from the CEO ................................ p5

Pulse Contributors ....................................... p6

Taking the Pulse ........................................p8-9

The Beat: News & Commentary ................ p10

The Sandbox ............................................... p13

Pulse Professional ........................................p58-59

Pulse Flash: - OWS 15 Throwback ....................................p60-61

Joining IAOP: New Members & Benefits .....p62-63

Chapter Roundup: - Spotlight on the New York Chapter ................ p64

The New Industry Norm: socIally responsIble sourcIng p32-35

PULSE May/June 2015 5

IAOP has been proud to be leading this movement and bringing together customers, advisors, providers, academia and organizations who share a real interest in this area.

At OWS15, impact sourcing was a big topic of conversation in keynote and track sessions, as well as on the floor of the Global Services Mall.

In this issue, you’ll read stories about impact sourcing and domestic sourcingin action, meet some of the providers,get the results of our annual CSR survey and live audience polling, and hear an interview with our 2015 GOSRIA award-winner ISS.

This is only the tip of the iceberg. From military veterans and their spouses to native Americas and prison inmates, domestic sourcing is providing employment and significant economic and social impact in the U.S.

You’ll learn more about domestic sourc-ing in the U.S. in our Hot Spot and our

View from the C-Suite interview with Georgia’s CIO Calvin Rhodes.

Our Chapter Spotlight focuses on the growing NY chapter and you’ll find a list of U.S. chapters on how to get involved with IAOP domestically.

Impact sourcing and domestic sourcing will only become more important as the fight for the best talent in outsourcing intensifies. These highly motivated labor pools around the world can help solve some of the gaps projected in labor.

This issue also continues a trio of stories on timely digital topics – cloud, robotics and how smaller start-up Davids are fighting the giant

Goliaths with emerging technologies. Be sure to check out these thought leadership pieces from our IAOP member contributors.

In our other regular sections, The Sandbox poses a question about the GBS model; Taking the PULSE shares blog outtakes; The Beat gives IAOP’s views on recent news; PULSE Professional contains your latest training and certification news; and Flash brings you more OWS15 photo highlights from Phoenix.

We always welcome your contributions and feedback. Thanks for reading!

R E G U L A R F E AT U R E S

It’s a great feeling for me personally – which I hope you share – to see the real progress, commitment and belief among our members on the positive impacts of CSR in outsourcing and impact/domestic sourcing.

Welcome to the CSR issue!MESSAGE FROM THE CEO

DEBI HAMILLCEO IAOP

From military veterans and their spouses to native Americas and prison inmates, domestic sourcing is providing employment and significant economic and social impact in the U.S.


PULSE CONT

RIBUT

ORS

M AY / J U N E 2 0 1 5 I S S U E : 1 7

PUBLISHER

IAOPDebi Hamill, CEO EDITOR-IN-CHIEF

Sandy [email protected]

MANAGING EDITORJag Dalal, [email protected]

PULSE BLOG EDITORKate [email protected]

SENIOR MANAGING DIRECTOR, STRATEGY & PROGRAM INTEGRATIONKim [email protected]

CREATIVE DIRECTORPamela Zarrella brandingwithpam.com

EDITORIAL BOARDJan Erik Aase, COP, Principal Consultant - ISG

Robert C. D. Barclay, Vice President, Global Marketing, Genpact

Michael F. Corbett, Chairman, IAOP

John Hindle, Founding Partner, Knowledge Capital Partners

Neil Hirshman, COP, Partner, Kirkland & Ellis

Bryan Jacobs, Managing Director, Jones Lang LaSalle

Eugene Kublanov, COP, Managing Director, KPMG

Sarah A. Pfaff, Principal, Advisory, Ernst & Young LLP

Renée Preston, Managing Director, Association Development, IAOP

ADVERTISING Scott [email protected], +1.845.452.0600 ext. 103

CONTRIBUTIONSPULSE welcomes contributors! Please email: [email protected]

IAOP2600 South Rd. Suite 44-240Poughkeepsie, NY 12601+1.845.452.0600

This publication (and any part thereof) may not be reproduced, transmitted or stored in any print or electronic format (including but not limited to any online service, any database or any part of the internet) or in any other format in any media whatsoever, without the prior written permission of the publisher. IAOP accepts no liability for the accuracy of the contents or any opinions expressed herein.

SAMEER ARORA Has over two decades of consulting and management experience in busi-

ness strategy, marketing and technology in the U.S., Middle East and Asia across services and manufacturing industries. Passionately follows

the travails and triumphs of Indian cricket.

LESLIE WILLCOCKS COP – IAOP Hall of Fame member globally recognized for his work in outsourcing, global strategy, organizational change and managing digital business with

25 years of experience. Enjoys skiing, tennis and art.

MICHAEL CHERTOK Co-founder and Chief Business Development Officer of

Digital Divide Data (DDD). Previously, served as Program Officer at the Bill & Melinda Gates

Foundation. Interests include swimming and hiking with his very friendly Rottweiler, Java.

DR. MARY LACITY COP - Curators’ Professor and an International Business Fellow at the

University of Missouri-St. Louis. A member of IAOP’s Hall of Fame. Researches global

outsourcing of business and IT services. Likes walking and cooking.

AIHUA YAN A Ph.D. candidate at the University of Missouri-St. Louis and an instructor at Saint Louis University with research interests

in outsourcing. Has worked in HR and project management. Hikes in her leisure time.

#DoBizJa

CONTACT UST: +1(876) 978-7755E: [email protected]

W: www.tradeandinvestjamaica.org

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TAKING THE

PULSE

IF YOU DIDN’T HAVE A CHANCE TO READ OUR FOUR-PART BLOG ON THE GLOBAL OUTSOURCING 100, HERE ARE SOME HIGHLIGHTS:

FROM PART 1 >“Hip hip hooray...it’s not the New Year but it sure does feel like it around here with the buzz and excitement of IAOP’s 10th edition of The Global Outsourcing 100! The companies on the list are all top companies and we want you to know what makes them so special and how they got here in the first place. Each organiza-tion completed a rigorous, opt-in application (and by the way, hats off to those who applied – not everyone does and it shows your com-mitment to our industry!) based on 4 distinct areas: Delivery; Programs for Innovation; Corporate Social Responsibility (CSR); and Size & Growth. Those companies that have distinguished themselves receive half or full stars in one or more specific judging category…kudos to you!”

– from Delivery Excellence as Defined by the New Global Outsourcing 100

FROM PART 2 >

“Innovation in outsourcing can impact any outsourced process, in any business function and industry. While technology is often a key driver of innovation, innovation is certainly not limited to technology companies or technology services. Outsourcing buyers understand there are multitudes of qualified service providers and advisors out there; what they really need to understand now is what makes each exceptional. As the outsourcing industry continues to mature, customers have come to expect excellent service that meets or exceeds agreed-to service levels at an agreed-to price.” – from Programs for Innovation in Outsourcing as Demonstrated Through the New Global Outsourcing 100

In live audience polling at OWS15, we asked participants:

How many primary or major outsourcing service providers do you use in your (or see in your customers’) Global Business Services organization?

See our Sandbox question for more on GBS.

SURVEY SAYS ...

4-5 Providers

Too many to count/don’t know

None - we (they) don’t have a GBS

LIVE AUDIENCE

POLLING AT OWS15

19%18 %

51 %


F E E D BAC K A N D C O M M E N TA RY F RO M T H E P U L S E C O M M U N I T Y

IF YOU DIDN’T HAVE A CHANCE TO READ OUR FOUR-PART BLOG ON THE GLOBAL OUTSOURCING 100, HERE ARE SOME HIGHLIGHTS:

1) Changes in the future of work2) The next wave of global services3) Newer sourcing location for talent and services

TRENDING LinkedIn Topics

FROM PART 3 >

“With rising global awareness surrounding social responsibility, including Corporate Social Responsibility (CSR), it is of utmost importance to recognize service providers who have demonstrated exemplary leadership in, and ongoing commitment to, activities that foster community involvement, fair operating and labor practices, respect for human rights, attention to environmental impacts, consumer issues and good governance. An increased number of organizations considering provider CSR capability when making an outsourcing decision has led to a maturing of the outsourcing industry’s acceptance of CSR.” – from Corporate Social Responsibility as Defined by the New Global Outsourcing 100

FROM FINAL BLOG >

“This judging of Size and Growth combines three questions on the application, which include: Size being given the highest of their score for revenue or employees for the current fiscal year; Growth being given the highest score for revenue growth or employee growth over the three-year period; Global presence, scored based on the number of countries in which the company has multi-client service centers (or offices with full-time employees (FTEs) in the case of advisors).” – from Size & Growth as Defined by the New Global Outsourcing 100

We welcome guest bloggers. Join the dialogue at iaoppulseblog.blogspot.com[

NEW EDITORIAL BOARD MEMBER

PULSE WELCOMES Bryan Jacobs, Managing Director, Jones Lang LaSalle, to our editorial board.

IAOP CONTEST WINNER

CONGRATULATIONS to Babu Srinivasan, Director, RMO Operations, Thomson Reuters for being selected to win a $100 Amazon gift card for completing our online survey.

COMING NEXT ISSUE IN PULSE:The Global Outsourcing 100 Issue. 2015 European Outsourcing Summit. Benelux in our Hot Spot and More. To contribute to these stories, suggest other stories or comment, contact: [email protected]

?


At the same time technology is rearing up to connect the world, relationships and forming consensus are more important than ever in decision making, recent news articles show. IAOP Chief Advisor of Thought Leadership Jag Dalal, COP-GOV, talks about these hard and soft sides, and how they will impact outsourcing.

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THE NEWS HEADLINES THE IAOP DISH

STOP CRYING - SEEK SALES CONSENSUS One of the biggest complaints (or cry for help) from providers is that their “sales cycle” is long and mostly unpredictable of the final outcome. Most believe customers are not “ready” for outsourcing decisions or don’t have the leader who would lead the change in the organization.

Another complaint has always been that “it is difficult to identify the decision makers or approach them with THE VALUE proposition.”

This article provides a practical approach on what to do about the woes. I covered sales approaches during my Advanced COP workshop at OWS15 and much of that is supported in this article. It’s a must read for providers.

GROUP DECISION MAKING RULES

MARCH 2015 HARVARD BUSINESS REVIEW, MAKING THE CONSENSUS SALE

The biggest change in sales and marketing today is that customers now make buying decisions by creating consensus among all decision markers, according to this article.

“The new need to create consensus is turning decades of conventional sales wisdom on its head - replacing the requirement that sales focus first on connecting the customer with the supplier with a requirement to connect decision makers within a customer’s organization with one another,” the authors said. Another major requirement is for suppliers to align sales and marketing.

The Beat / NEWS & COMMENTARY AS COVERED BY JAG DALAL

A VISION FOR OUTSOURCING 4.0 Tom Davenport has always been a leading thinker and has created visions of future decades before they become everyday strategy. His thought pieces on analytics, business process innovation and knowledge management are well known and have formed a foundation for many of the business process outsourcing we do today.

This article created for me a new vision of what outsourcing 4.0 may look like. It will consist of providing services that are embedded in products and services. Providers will manage the distribution and control of them.

It’s quite a different model for customers and providers from where we are today. How will we get ready for it?

AN INTERCONNECTED WORLD LIES AHEAD

APRIL 1, 2105 CIO JOURNAL, ERA 4.0: THE SCARY AGE OF AUTOMATED NETWORKS

Leading thinker and visionary Tom Davenport offers an eerie look at automation and analytics 4.0.

“If the 3.0 version of analytics and automation involves widespread use of them within orga-nizations, 4.0 is about their application across pervasive, automated networks,” the article says. “Every business and organization in this world will be tied together with ubiquitous communications, apps, sensor networks, and APIs.”

Davenport provides examples of the interconnectedness in financial trading, the airlines industry and utilities that show the concept isn’t science fiction.

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Focusing on a piece of the function only fixesa piece of the function.You’re under increasing pressure to meet competitive demands. Cutting costs alone won’t cut it. By taking a more holistic approach to functional improvement, EY’s outsourcing advisors can help you optimize efficiencies and achieve the sustainable performance you seek from your outsourcing intiatives.

What makes us different is that we see things differently. You will, too.

Find out more at ey.com/advisory.

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Managing Director Shared Services and Outsourcing Advisory KPMG

Sandboxthe

COP-GOV, Senior Leader, ITI Strategy and Sourcing Boeing

C U S T O M E RA DV I S O R

Global Vice PresidentTeleperformance

K I M H U D D L E L AW R E N C E K A N EM AT T H E W B O W M A N

P R O V I D E R

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Global Business Services was a recurring theme discussed by C-level executives at The 2015 Outsourcing World Summit. We asked a customer, advisor and provider to weigh in on this question: In a GBS model, what key considerations should guide clients when deciding what processes should be outsourced and what processes should be performed in-house?

“Consider outsourcing when: The process is rules based, easily docu-mented and standardized across the organization. The process isn’t part of your core business and doesn’t offer a marketplace differentiator. Your internal cost and performance is at or below external benchmarks and there are proven provider capabilities.Consider retaining when: Stakeholders are not aligned and the political fallout cannot be effectively managed. The process requires significant customer interaction that will likely impact relationships. The process is a source of competitive advantage and builds long-term business value.”

“This question used to be about core competence. Keep your core business processes in-house and outsource the commoditized functions. But that old core competency theory was designed over two decades ago – before the Internet and an almost free global supply chain revolutionized how every industry operates. Now that most companies are choosing to compete on the basis of customer experience, many are selecting the outsourcing model to affordably deliver a cross-channel experience that will engage the highly demanding omni-channel consumer.”

“No matter what you outsource it’s imperative to retain enough knowledge and skill to govern the relationship and ensure continual alignment with business objectives as your environment matures and grows. Typically that includes things like architecture, vendor management, information security and the like. Ask yourself if it’s something that requires core process knowledge or you if you could ‘buy it off the street’ and achieve the same outcome. For best results, especially in a multisupplier environment, be sure process interfaces are managed and measured by knowledgeable retained staff. This aligns everyone’s interests with yours.”


FINDINGS FROM THE 2015 IAOP OUTSOURCING WORLD SUMMIT

SERVICE AUTOMATION SURVEY

BY - MARY LACITY, COP, LESLIE WILLCOCKS, COP, AND AIHUA YAN

PULSE K N OW L E D G E C E N T E R

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Using software to automate tasks is not a new idea, but recent interest in service automation has certainly escalated. The popular press is filled with articles with provocative titles like “I am Robot: Will Robotic Process Automation (RPA) Revolutionize the BPO industry?”2 Although the term “Robotic Process Automation” connotes visions of physical robots wandering around offices performing human tasks, the term really means automation of service tasks that were previously performed by humans.

In customer care settings RPA almost always means a software solution, such as voice recognition software (software that understands speech) or “chatbots” (software that produces speech). For business processes, the term RPA most commonly refers to configuring software to do the work previously done by people, such as transferring data from multiple input sources like email and spreadsheets to systems of record like ERP and CRM systems.

To be clear -- we are not talking about technology enablement where technologies like desktop scripts assist human agents but actual software automation that replaces some or all of the work previously performed by people. The phenomenon is also called service automation, digital services and software robotics. We use the term service automation.

Service automation will certainly affect the economics of service delivery. One source estimates that the salary of a BPO worker may be $60,000 onshore and $23,000 offshore, but software performing the work of one full time equivalent (FTE) may cost as little as $7,500!3 Consequently, we believe service automation will have a profound effect on sourcing decisions.

To test these views, we surveyed the attendees of The 2015 Outsourcing World Summit (OWS) during the client-only and provider/advisor-only networking sessions. The sample of 143 completed surveys comprises 63 clients, 64 providers, 15 advisors, and 1 provider/advisor. We summarized the results and asked three service automation experts to reflect on the findings: Alastair Bathgate, CEO and Co-Founder of Blue Prism; Rob Brindley, Director at ISG; and Sarah Burnett, Vice President of Research at the Everest Group.

“ ROBOTIC PROCESS AUTOMATION IS THE NEXT WAVE OF

INNOVATION AND WILL DRAMATICALLY CHANGE THE WAY

BUSINESS AND BPO SERVICE PROVIDERS DEAL WITH

THEIR CUSTOMERS.” – MARTIN CONBOY 1

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24%

14%

5%9%

clients strongly agreed that services will be increasingly

automated in the future.

48%


ORGANIZATIONAL APPETITE FOR SERVICE AUTOMATION

Survey respondents were asked to comment on the state of service automation in their own organizations. Specifically, respondents were asked the degree to which they agreed with a statement using a seven point scale, with a “1” indicating strongly disagree and a “7” indicating “strongly agree.” The mean responses are found in Table 1.

Overall, clients slightly agreed that client organizations place a great priority on service automation and strongly agreed that services will be increasingly automated in the future. Additionally, nearly half of clients indicated that between 26 and 50 percent of their existing services are suitable for some automation (see Figure 1). An additional quarter of the clients thought that between 51 and 75 percent could be automated.

1. My organization places a great priority on automation of services.

2. My organization increasingly expects services to be more automated.

Survey Question:Client Version

AverageClient

Response(n = 63)

Survey Question:Provider Version

Average Provider/Advisor

Response(n = 80)

1. My organization places a great priority on automation of services.

2. My clients increasingly expect services to be more automated.

4.5

6.0

4.5

5.3

Table 1: Perceived Importance of Service Automation(1 = strongly disagree; 7 = strongly agree)

0-25% of services

26-50% of services

51-75% of services

>75% of services

Do not know

% OF SERVICES SUITABLE FOR AUTOMATION

Figure 1: Percentage of client services suitable for automation

(n = 63 client responses)

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Bathgate of Blue Prism commented about service automation opportunities: “It’s really interesting to see the range of processes that are suitable for automation in back offices. The RPA programs clients are rolling out grow over time, with more mature clients having 25 to 50 percent of their back office workforce now manned by software robots, representing several hundred FTEs.”

Provider and advisor survey respondents slightly agreed that their organizations place a great priority on service automation. They also slightly agreed that their clients’ services will be increasingly auto-mated in the future. We asked Brindley of

“ BPO PROVIDERS ARE CLEARLY PRIORITIZING AUTOMATION VERY

HIGHLY AND WE ARE SEEING RAPID INCREASES IN THE OFFERINGS

OF AUTOMATION TECHNOLOGIES. WITHIN IT, AUTOMATION IS AN

OLDER STORY AND NOT CHANGING AS RAPIDLY.“

– SARAH BURNETT, VICE PRESIDENT OF RESEARCH AT THE EVEREST GROUP

ISG and Burnett of Everest Group to discuss what they see as far as providers prioritizing automation as a service delivery capability.

Brindley increasingly has seen providers incorporate automation into the technical solutions of their service proposal. “This is particularly evident with top tier providers who have developed or incorporated third-party automation enablement technology to improve the value proposition of their proposals in a highly competitive market, and to drive out cost of their services,” he said. Burnett agreed that service providers have rapidly accelerated their focus on automation.

AUTOMATION AND SOURCING DECISIONS

Clients can automate services using several sourcing options – they can do it all themselves, seek the help of an advisory firm, or rely on their service providers to automate for them. Burnett told us: “If clients want providers to bundle their tools into the pricing for services, we will see a move to greater output-based pricing. However, if fears of technology lock-in dominate, they will opt for breaking technology apart from services and utilize providers for the skills and expertise, not their proprietary tools and configuration libraries.”

In the survey, we asked clients, providers, and advisors about the effects of service automation on clients’ sourcing decisions (see Table 2). On average, clients are NOT taking the lead on service

automation. Most clients agreed that they rely on providers to automate client services. However, clients indicated that in their sourcing decisions, costs and quality of a provider’s staff are more important than a provider’s automation capabilities. Talent still trumps technology when choosing among providers.

Brindley corroborated the survey finding that clients still care more about the provider’s people than technology. But he added: “However, clients are continuously looking for providers to demonstrate how they will be more efficient and productive. Initially, this was through process discipline and

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efficiency, and then labor arbitrage. Providers are now differentiating themselves through the use of technology and automation to create value for the client. Additionally, where clients have sourced, we are seeing providers utilize automation as a method to satisfy their committed innovation requirements.”

Provider and advisor survey respondents shared the same perceptions as clients on these sourcing

questions, except for their perceptions regarding client-led automation. Whereas clients reported they were NOT taking the lead on services automation, providers and advisors neither agreed nor disagreed that clients were taking the lead. Our survey showed that, while the average client is not leading the automation charge, clearly some pioneering clients are forging ahead.

Survey Question:Client Version

AverageClient

Response(n = 63)

Survey Question:Provider Version


Response(n = 80)

3.0

4.5

5.0

4.0

5.5

4.1

5.0

4.7

4.4

4.3

3. My clients are taking the lead on automating business services – they are not waiting for providers to help them.

4. My clients need help in assessing how automation could affect their business and IT services.

5. My clients primarily rely on service providersto automate business services.

6. My organization places heavy weight upon our automation capabilities when selling services to clients.

7. My organization is more concerned about the cost and quality of our staff than with automation when selling services to clients.

3. My organization is tak-ing the lead on automating business services – we are not waiting for providers to help us.

4. My organization needs help in assessing how automation could affect our business and IT services.

5. My organization primarily relies on service providers to automate business services.

6. My organization places heavy weight upon providers’ automation capabilities when choosing among different providers.

7. My organization is more concerned about the cost and quality of staff than with automation when making sourcing decisions.

Table 2: Automation and Sourcing Decisions(1 = strongly disagree; 7 = strongly agree)


“ THE CLIENTS ARE NORMALLY LARGE/FORTUNE 500 COMPANIES BUT SME

ORGANIZATIONS ARE ALSO REALIZING

THE BENEFITS OF THE LOW COSTS OF

ENTRY TO ROBOTIC AUTOMATION

PROGRAMS. THE TYPICAL BUYER IS

THE SENIOR BUSINESS MANAGEMENT

THAT OWNS THE HEADCOUNT FOR

THESE ADMINISTRATION ROLES AND

IS LOOKING FOR IMPROVEMENTS IN

THE EFFICIENCY AND EFFECTIVENESS

OF THEIR OPERATIONS.“– ALASTAIR BATHGATE, CEO AND CO-FOUNDER OF BLUE PRISM

PERCEIVED EFFECTS OF SERVICE AUTOMATION

“In the continuing search for business process cost efficiency, automation is truly the next big thing. It not only promises cost savings, but other benefits such as reduced errors, faster operations, and 24X7 coverage.”– Everest Group Report4

We asked clients, providers, and advisors to step outside their own organizations to reflect more broadly on the effects of service automation (see Table 3). Overall, respondents strongly agreed that automation can reduce costs and improve service quality. Bathgate said, “The benefits of automation go well beyond the commercial savings which are very tangible and quickly realized. Clients see dramatic cost savings depending on the types of processes automated and the existing costs of the operation. Most automations pay back in six to 12 months. The other key benefits are increases in accuracy and right first-time processing (with all the downstream benefits as up to 60 percent of work is re-work because of errors), improvements in regulatory compliance, business insight and analytics from automated processes, speed of delivery and operational agility in business operations.”

Table 3: Perceived Effects of Service Automation

(1 = strongly disagree; 7 = strongly agree)

8. I think service automation can significantly reduce or avoid costs.

9. I think service automation can improve service quality.

10. I think service automation is an evolving model that is years away from business reality.

11. I think service automation will affect sourcing location decisions by making labor arbitrage less important.

12. I think service automation is already altering the underlying economics of service delivery

AverageClient

Response(n = 63)


Response(n = 80)

6.5

6.0

3.5

5.0

Not asked

5.9

5.9

4.2

5.0

5.2

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Client survey respondents ‘slightly disagreed’ that service automation is an evolving model that is years away from a business reality whereas pro-viders and advisors ‘slightly agreed’ it was years away. The differences are statistically significant. We asked Burnett of Everest Group to ruminate on this difference. “The rate of adoption of automation is one of the most interesting dynamics facing this market,” she said. “On the one hand, client organizations that learn about automation are generally eager to embrace it quickly. On the other hand, organizations that have actually implemented extensive automation programs report that it is a multi-year journey. Although some deployments are actually quite easy and require only a matter of a few weeks or months, most programs report that there are many barriers to rapidly scaling an automation program across the myriad of potential processes – lack of skills, other priorities, concerns from corporate IT groups, and the normal resistance to change. This suggests that automation will have a meaningful impact over roughly a five year period – some will see it more quickly, but at an aggregate level across the market it will take some time.”

All survey respondents ‘slightly agreed’ that service automation makes labor arbitrage less important when making sourcing location decisions. Providers and advisors also agreed with the statement, “I think service automation is already altering the underlying economics of service delivery.”

Think about this: if 50 percent or more of tasks can be automated, then labor arbitrage becomes a less important factor when selecting between onshore and offshore locations. The onshore team can be highly skilled knowledge workers that deal with complex transactions, handle the exceptions the software cannot execute, and design and onboard new services. Yes, the onshore team is expensive, but the overall cost per transaction remains low when automation is a significant part of service delivery.

FUTURE IMPLICATIONS

So what have learned? Overall, clients, providers and advisors agreed that services will increasingly become more automated; that service automation offers a variety of benefits; and that automation is and will continue to affect sourcing decisions. Today, most clients expect providers to take the lead in service automation, but they still focus more on costs and quality of staff when choosing among providers.

“ AUTOMATION IS CERTAINLY HERE TO

STAY, AND WILL CONTINUE TO EVOLVE

TO BECOME TRULY COGNITIVE, WITH

EFFECTIVE APPLICATION, COST, AND

RELIABILITY TO SIGNIFICANTLY

BENEFIT THE CLIENT.“

– ROB BRINDLEY, ISG

© Can Stock Photo Inc. / kirstypargeter


and improved pricing. This is resulting in a rapid transformation in the marketplace, as more providers are incorporating automation into their services offerings. However, with the relative newness of automation, there are several challenges for both clients and providers. This includes the net savings clients can expect, intellectual property rights to automated processes, and automation technology stewardship within the client environment.”-- Brindley of ISG

“Automation appears to hold the promise of being a catalyst for moving to more output-based pricing for which the service provider is accountable for determining the mix of people, technology, and process changes required to deliver the service. When clear outputs can be defined, this approach is the natural end state. The open question is whether the service providers will be asked to provide the tool sets for automation or if their clients will prefer to license commercial tools themselves and just utilize the service providers’ expertise to implement and optimize automation. There is also the rise of the new breed of service providers to consider. These are entirely focused on automated service delivery and could drive growth in consumption-based contract models.” -- Burnett of the Everest Group

Considering both the survey results and expert commentaries, clients seem to be in various stages of adoption. In the forthcoming year, we aim to help educate potential adopters by objectively researching mature adopters, by assessing what the software can and cannot yet do, and by extracting lessons on realizing service automation’s value. We hope to report our findings at next year’s Outsourcing World Summit.

IMPACT ON CONTRACTING MODELS

The one question we didn’t ask but wish we had had is, “How does automation change contractual governance?” Imagine this scenario: A client has 500 employees performing a service in-house. The client finds a service provider that can deliver a better service using automation and only 250 FTEs. From a client perspective, the client will likely want to pay the provider about half the in-house cost because headcount will be reduced by half. But the provider needs to benefit as well. Why would a provider automate if it reduces their revenues by half? In a highly automated environment, it seems reasonable to assume that FTE-based pricing becomes obsolete. Will outsourcing service contracts increasingly be priced based on outputs? We asked our experts to comment on what they are seeing as far as new contracting models and other future implications of service automation. Here’s what they said:

“We have seen a range of innovative offerings from the existing BPO service providers, as well as some new start up organizations looking to disrupt the traditional model, across the spectrum of the service cycle. For example: transactional based pricing models, Robots as a Service, continual service innovation and gainsharing. Also since the robots can operate anywhere, the work can be performed geographically wherever it is best suited, which means local control, and issues with regulation and offshoring of data can be avoided.” – Bathgate of Blue Prism “We are seeing those providers who have incorporated automation into their services have a competitive advantage over their competitors through commitments to higher service levels

1Conboy, M. (2014), “I am Robot: Will RPA Revolutionise the BPO Industry?” http://outsourcemagazine.co.uk/ i-am-robot-will-rpa-revolutionise-the-bpo-industry/2http://outsourcemagazine.co.uk/i-am-robot-will-rpa-revolutionise-the-bpo-industry/3http://www.operationalagility.com4http://www.everestgrp.com/2015-02-service-delivery-automation-the-next-big-thing-webinar-16554.html

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Cloud & Outsourcing:

Challenging Times Need Effective Policies



In this article we turn to the more pressing challenges cloud computing presents to organizations. Our 2011 and 2013 surveys revealed that business executives saw cloud computing as transformational and looked to their own IT executives to guide them.

In our 2014/15 work we found an even greater aspiration, indeed impatience amongst a majority of senior business executives to harness the touted benefits of cloud computing (1).

In all three surveys IT executives have been more circumspect, if positive, on moves to cloud computing, because, we suspect, they tend to be better informed about the challenges. There is still a lot of insecurity amongst all parties about data – its security, portability, location and what happens in the event of systems failure – even though these are not the main real challenges as revealed by our case research.

This is the third and final part of a series. Leslie Willcocks, COP, IAOP Hall of Famer and Director of the Outsourcing Unit, London School of Economics and Political Science, together with Associates Drs. Daniel Schlagwein and Alan Thorogood of the UNSW Australia Business School complete their report on their latest research results. Parts 1 and 2 appeared in PULSE magazine as Cloud and Outsourcing: What’s The Real Story? and SMAC Outsourcing and Innovation in early 2015.

Editor’s Note:

The Real Challenges of Cloud Computing

Cloud & Outsourcing:

Challenging Times Need Effective Policies

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1. Adoption of any major new technology is necessarily an arduous process banging up against culture, existing structures and governance modes. Organizational change capability is key.

2. With cloud computing there are still genuine security and privacy challenges that have to be worked through for the particular organization, though service provider capability tends to be much better here than often imagined/feared.

3. If governance and sourcing were a challenge in the past, cloud computing introduces new and more rapid risk.

4. Integration with legacy technologies, and defining and executing the migration path to cloud computing can become major obstacles. Many legacy systems are not immediately suitable for migration to cloud. So service integration becomes

Surveys Show Seven Challenges to Cloud:much more critical to achieving the true benefits from cloud computing – something our research found in place at Common-wealth Bank of Australia and several other major corporations.

5. Governance and interoperability in the larger cloud computing ‘ecosystem’ become key.

6. The human resource implications of cloud computing are considerable, and, as we saw above, we are finding digital skills shortages in-house a major drag on making progress on cloud computing.

7. Finally, with all these issues, very often the challenge of getting business innovation from cloud computing is being postponed, except in a small minority of large corporations, though small- and medium-sized enterprises (SMEs) have a better record on this.

7



Effective Policies for Moving To the Cloud

All that said, we have encountered in our research many examples of effective progress with cloud computing.

What do the success cases share?

One is getting the in-house team right by evolving skills and capability. Whether SMEs or large corporations, these teams establish the necessary technical service competence, consisting of a technically capable CIO and architecture planning, making IT/cloud work, and facilitating contracts with suppliers.

Such an IT function is then able to deliver on the immediate business imperatives, which according to our 2014 research are: cost reduction, flexible scaling in the face of variable business demand, and rapid deployment of cloud computing platforms and apps in a secure environment with business continuity.

Today, many corporations have been doing cloud computing seriously for several years. For example, Proctor & Gamble, Johnson & Johnson, Allergan and Sears Roebuck & Company, already have moved to the next stage and beyond.

Seeing the IT function as a strategic partner, senior business executives, together with the CIO, business systems thinkers and relationship builders have identified how cloud computing deployment can align with dynamic business strategy over time and how it can be operational-ized, including with external service providers, for strategic business advantage.

In the most advanced corporations we have studied, especially Commonwealth Bank of Australia and Proctor & Gamble, a third stage sees the CIO more as

cloud ready

a business innovator in constant dialogue with the board, while IT and cloud computing sees large-scale and disciplined multi-supplier outsourcing .

The organizations that have advanced the most so far in their cloud computing use first establish cloud fitness criteria. These will include whether data sensitivity is low/medium; whether loading is low, unpredictable or highly variable; and whether cloud is easily integrated.

Also critical in examples we have seen is the ability of cloud computing deployment to spread loading, and achieve speed to market and cost transparency. The move to cloud computing almost invariably also is expected to reduce costs.

The organizations that have advanced the most so far in cloud computing use first establish cloud fitness criteria.

Cloud computing requires clear policies. The leading corporations avoid creating their IT and business silos in the Cloud – cloud computing is seen as an opportunity to re-engineer. Internal applications are developed to be cloud ready. In addition, as we indicated, internal IT skills are being converted from ‘build, plan and run’ to ‘source, architect/integrate and (business) exploit.’

For cloud computing, leading corporations are prepared to run distributed applications components, build in tolerance for failure, move to service-oriented architec-ture, enable third-party services, and at the same time, have a written and approved exit strategy for each and every cloud computing solution, to get data back in a usable form.


Commonwealth Bank of Australia Case If leaders in corporate cloud computing adoption share many practices, it is also true that in our research we found each leader being innovative and distinctive in aspects of its move to the cloud. Let us take one example from our research, the Commonwealth Bank of Australia (CBA) (2). In 2014, CBA employed 50,000 people, of which 6,000 were in IT and Operations. CBA managed total assets of Aus$ 800 billion (approximately US$ 750 billion), according to CBA’s 2014 Half-Year Profit Announcement.

Considered to be among the top 20 IT consumers worldwide, CBA has acquired an excellent reputation for the strategic use of IT. By 2010, CBA saw a number of drivers and inhibitors when moving to Cloud. The main drivers were:

4Variable costs through IT-as-a-service/ pay-as-you-go instead of fixed costs and guaranteed volumes 4Competitive costs from many providers in the market instead of upfront agreement with one or a few providers 4Rapid provision of new environments and hence reduced time to market 4High total volume of IT and variable workloads 4IT leadership commitment to cloud 4Successful prototype (Oracle platform) as proof-of-concept implementation 4Multi-provider cloud promised increased flexibility and scalability

At the same time, CBA identified a number of barriers:

4Existing contracts with large providers that had substantial knowledge about CBA and on which the bank had long relied 4Internal cultural barriers to cloud computing 4Security and availability concerns 4Regulatory framework prohibited certain options for data storage in the cloud 4Perception that existing in-house virtualization already provided some scalability 4Perception that existing conventional multi- provider sourcing already provided some flexibility

In the event, the drivers won out and the barriers were dealt with. CBA arrived at a distinctive and innovatory approach. This leading financial institution, between 2010 and 2014, implemented a cloud computing market for their IT sourcing needs by using technical standards and flexible short-term contracts. This market is open for many cloud infrastructure providers as sellers, yet CBA is the only buyer – see Figure 1.

cloud culture

CBA arrived at a distinctive and innovatory approach.

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Through this market, CBA gained the flexibility to move workloads dynamically between providers, and the ability to take advantage of competitive pricing at all times. In this way, CBA moved towards pay-as-you-go IT. Through cloud computing, IT infrastructure and maintenance costs in regard to software development and provision, for example, fell by around 40 percent. We also found that the time to market for new applications and services had been reduced by up to four to six weeks. cloud costs

Figure 1CBA’s Multi-Provider Model of Cloud Computing

ability to move apps and their workloads between different providers

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1. Willcocks, L., Schlagwein, D. and Thorogood, A. (2015) Cloud Computing Research: Trends, Challenges, Lessons. LSE Outsourcing Unit Working Paper 15/1/, LSE, London. See also Willcocks et al., (2014) Moving To The Cloud Corporation. Palgrave, London.

2. Schlagwein, D. Thorogood, A, and Willcocks, L. (2014). How Commonwealth Bank of Australia Gained Benefits Using A Standards Based, Multi-Provider Cloud Model. MISQ Executive, 13. 4. 209-22.

1. Define and enforce technical cloud standards across providers to allow switching between providers.

2. Negotiate flexible, short-term contracts with sets of cloud providers to allow for market pricing at any point in time.

3. Retain internal capabilities in the IT function to allow it to become a competent IT broker able to integrate external and

Five Lessons for IT Executives

internal IT resources and to design state-of-the-art overall IT solutions.

4. Prioritize cloud transformation and keep “non-cloud-able” applications off the cloud until life-cycle events allow for an economically viable move to a cloud.

5. Engage in industry-level cloud standard setting efforts and adopt the resulting standards early.

5For IT executives of other large companies considering cloud computing, our analysis of CBA strategy provides five major lessons:

These lessons from leading organizations were hard won from early adoption of cloud computing, and suggest how the challenges being experienced today can be addressed. But executives need to act now if they are going to harness the possibilities presenting themselves over the next five years. Because cloud computing is only the beginning.

In the face of accelerating, combinatorial technology, retaining technical in-house capability continues to be critical, not least as a basis for harnessing the ever developing external IT and cloud computing services market.

beyond cloud

Our research suggests that cloud computing technologies form the platform for six other technologies that in combination will achieve massive impacts on the future enterprise. These are:

mobile internet accessautomation of knowledge workroboticsBig Datathe Internet of Things digital fabrication}

Cloud is Only the Beginning

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In 2008, management guru C.K. Prahalad championed two groundbreaking concepts in his book “The New Age of Innovation: Driving Co-Created Value through Global Networks.”

The first concept was a market segment size of one (N=1) where every customer is treated as a unique entity. Today, customer personalization using real-time analytics makes it possible for companies to define a market segment size of one.

The second concept was leveraging a global network of specialized resources (R=G), rather than doing everything in-house. The peer-to-peer “sharing economy” is the ultimate manifestation of the global interconnected network of the digital age.

Digital technologies like mobility, social, big data analytics and cloud are reaching critical mass across the world. Ubiquitous Internet access, smartphones, affordable computing power and the increasing penetration of social media are driving the growth of digital technologies.

Global market leaders in almost every industry are facing competition from start-ups that leverage the power of digital technologies to create new sources of competitive advantage, different business models and threaten to fundamentally alter the economic structure of their industries.

D I G I T A L T E C H N O L O G I E S

THE DIGITAL AGE: REWRITING THE DAVID VERSUS GOLIATH STORY

BY: SAMEER ARORA, VICE PRESIDENT & HEAD – DIGITAL ONE, SYNTEL

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1. Break Down Entry BarriersA classic entry barrier for retail is the high up-front capital investment on a supply chain, including stores, warehouses, transportation and suppliers. Online retailers overcome this hurdle by eliminating physical stores and managing a virtual supply chain through a network of product and logistics providers. Lower fixed cost structures translate into lower prices for consumers and increased market share.

2. Leverage Global NetworksAirbnb, which rents apartments, second homes or even spare rooms to travelers, has created a global network of 800,000 home listings in 34,000 cities. This model enables homeowners to monetize idle real estate and offers travelers cheaper, flexible and unique accommodation options. Now, global hotel chains must deal with this new competitive threat in every town and city across the world.

Uber is driving a similar revolution in urban transportation, enabling individuals to compete with taxis and limousines and forcing the traditional businesses to resort to lobbying and legislation to combat the competitive threat.

3. Disaggregate the Value Chain Traditional companies focus on delivering end-to-end services, but digital technologies allow companies to focus on a few specific processes in the value chain to build a business. In banking, full service banks are being challenged by payment specialists like PayPal and Xoom.

4. Eliminate Middlemen through Information Transparency In the past, travel agencies enabled airlines and hotels to reach a wider set of consumers while benefiting from preferred rates and discounts. Online travel sites now connect service providers and consumers digitally, eliminating middleman commissions to drive lower prices.

5. Change the Basis for Competition through TechnologyThe eBook transformed the publishing industry by delivering content electronically at near zero cost, providing price advantages to consumers, margin advantage to publishers, and disrupting brick and mortar booksellers. Video streaming technology changed the movie rental industry, enabling online content providers to unsettle incumbents like Blockbuster.

How can Goliath Compete with the Digital David?Industry leaders face a paradox unique to the digital age. They are threatened by technology disruption in the short term, but have an unprecedented growth opportunity if they can successfully adapt to the new normal.

While every technology change creates a new set of hot “innovator companies,” market leaders who become early adopters can protect or even increase their market share.

Strengths of Market Leaders Market leaders have three powerful assets that can help them stave off the threat of from disruptive competitors:

• BRAND: Established, powerful brands with deep marketing budgets

• CASH RESERVES: Can be used to support offensive and defensive strategies

• CUSTOMER INFORMATION: Access to customer information and insight is perhaps the most powerful, least understood asset for established companies

Strategic Options for Industry Leaders

1. Buy Industry leaders can use their financial strength to buy their way into the digital market. In 2011, Allstate bought Esurance to establish a strong foothold in the fast-growing online market.

2. CollaborateThe digital era is all about ecosystems. Companies partner with customers, vendors and even competitors to succeed in the digital marketplace. For example, several banks and credit card companies partnered with Apple for ApplePay, even though it competes with their own digital payment initiatives.

How does Digital David Change the Rules of the Game?


ABOUT THE AUTHOR: Sameer Arora leads the Digital Services business at Syntel, a $4.3 B market cap provider of digital transformation, information technology and knowledge process services. He joined Syntel in 2006 and was Global Head – Marketing & Strategic Initiatives prior to his current role. Arora is a Member of the Program Committee at Enactus India, whose mission is to bring together top leaders of today and tomorrow to create a better, more sustainable world through the positive power of business.

3. Capitalize on Your Brand to Expand the Market

Digital channels reduce the cost of servicing customers and allow companies to reach market segments that may have been too expensive.

American Express and Walmart collaborated to develop Bluebird, a prepaid digital alternative to checking accounts.The target market is very different from the typical AMEX consumer, but the prestige of these two brands makes it a credible proposition in the marketplace.

4. Customer Data is the New Oil!

The ability to analyze huge volumes of data to derive actionable insights is driving the success of digital companies. Industry leaders are sitting on immense stores of information about customer likes, dislikes and behavior. Applying Big Data analytics and predictive modeling techniques can yield tremendous gains. Targeted cross-selling campaigns, predictive intelligence and social sentiment are great examples of ways customer insight can drive growth.

5. Become a David to Succeed - Learn from Innovators and Leverage Your Assets

The fastest growing online retailer in 2013 was Walmart, which grew its online business to $10 billion. While this may seem relatively small compared to market leader Amazon at $68 billion, it’s worth noting that the online business represents only 2 percent of Walmart’s $476 billion in revenue.

Walmart created a start-up environment for their digital business by establishing @walmartlabs as a separate division (see related story). Its employees are organized into mini startups, with small teams working on projects to transform the digital and in-store shopping experience. This approach enables Walmart to leverage its vast store network to create a differentiated multi-channel value proposition — something that pure online retailers cannot match.

Is There a Quick Fix Solution?Digital transformation is an ongoing journey that will fundamentally change the operating ethos of businesses, but cultural transformation is just as important.

Industry leaders need to leverage power of technology with their existing strengths - brand, market reach, loyal customers and supply chain network to reposition themselves for the digital age. Digital technologies can enable them to access new market segments, reduce the cost of service delivery, develop more customer-tailored products, and provide a richer customer experience.

‘War of the Worlds’ Will Produce Winners In the 1950s, it took 20 years for one-third of the Fortune 500 to be replaced, something that now happens about every five years. This fast-changing era is propelled by technology-driven transformation, and the impact is felt by individuals, corporations, industries and society itself. There is a tremendous impetus to adapt to the changes or risk getting left behind.

The next few years will see an exciting “war of the worlds” as new digital companies scale up to pose a competitive threat, while incumbents adapt to changing realities and deploy counter strategies to beat the upstarts at their own game.

Business will be forced to rethink their business model and build the capabilities required to succeed in the digital era.

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The New Industry Norm:

socIally responsIble sourcIng

ClIeNts Care

abouT soCIal

responsIbIlITy!


Increasingly, buyers of outsourced services expect suppliers to manage their operations in a socially responsible way and suppliers are changing their business practices to meet these expectations.

Nowhere was this new norm more evident than at The 2015 Outsourcing World Summit where CSR was discussed in numerous keynote presentations and sessions throughout the event. CSR is growing as a consumer expectation and business capability across all sectors.

Dr. Ron Babin, COP, Ryerson University and Dr. Bill Hefley, COP, University of Pittsburgh and ITSqc, shared highlights from IAOP’s biannual CSR survey. Among the remarkable findings is the fact that the number of outsourcing clients who consider CSR to be a crucial component of business strategy has doubled in the past four years to over 30 percent.

Similarly, the percentage of buyers who prefer outsourcing providers with a demonstrated CSR capability also doubled. Eighty percent of outsourcing professionals say CSR is at least sometimes a factor in their sourcing decisions. Clients are especially focused on labor practices as well as fair operating practices and human rights, and will audit to verify providers’ CSR capabilities.

Other key takeaways: Even large, well run organizations can be blind-sided by the social responsibility issues of outsourcing; some are now taking steps to validate CSR during the outsourcing RFP and provider selection process.

On the buyer side, Scott Singer, COP, Head of Global Business Services at Rio Tinto, talked about the strong obligations to create local employment that led his company to establish a delivery center in Oyu Tolgoi, Mongolia. Rio Tinto partnered with a supplier in India to train staff in Mongolia and made a long-term commitment to including this new center in its supply chain.

The New Industry Norm:

socIally responsIble sourcIng

by: mIchael chertoK , chIeF busINess DeVeloPMent oFFIcer, DIgITal DIVIDe Data

“IgnorINg csr IN ouTsourcIng caN

Damage your organIzaTIon’s

rePuTatIoN,” saID babIN anD heFley who authoreD the Newly releaseD ouTsourcIng ProFessIoNals’ guIDe to corPoraTe responsIbIlIty e-booK.


Impact sourcing continues to grow within the outsourcing industry. This practice focuses hiring opportunities on qualified workers who would be considered disadvantaged in their local context -- economically, socially, physically, or otherwise.

Impact Sourcing offers a unique proposition relative to traditional BPO anchored on attractive costs, comparable performance, access to an untapped talent, and opportunity to create social impact, according to a panel on the Business Case for Outsourcing.

Mamadou Biteye, Managing Director of The Rockefeller Foundation, said the Foundation is acting as a catalyst for impact sourcing by providing grants for research, investment in firms, and supporting work on metrics and a common framework to report on impact.

“Impact Sourcing is a global opportunity that could completely transform the outsourcing sector,” according to Biteye.

Tim Hopper, Responsible Sourcing Manager at Microsoft, and Curt Swaggart, Senior Offshore Vendor Manager at Ancestry.com, discussed why their firms are increasingly contracting with Impact Sourcing vendors as part of the panel.

In that same presentation, Eric Simonson, Managing Partner at the Everest Group, made the point that Impact Sourcing

methoDs PlaNneD to INcrease csr coMmITMent

Increasing emphasis on CSR activities of outsource providers

50% 57% 46% 43% 46% 38% 30% 41% 48%

38% 33% 42%

31% 25% 25% 19% 20% 31%

Increase resources and/or personnel

in the CSR area

Reporting publicly on CSR activities

Increase audits of outsourcing provider(s)

Conduct more outsourcing provider training on social and/or

environmental standards

Make CSR a board responsibility

Hire external expertise to advise CSR program

2009 2011 2013

Impact sourcIng gaIns strengTh

“we see the besT Value when buyers aND ProVIDers agree aND see eye to eye. collaboraTIVe csr caN haVe great shareD Value.”

– Ron Babin, COP, DBA, Associate Professor, Ted Rogers School of IT Management, Ryerson University in Toronto.

Iaop 2014 csr surVey resulTs


FuTure expectaTIons oF the Importance oF corPoraTe socIal responsIbIlIty

represents 12 percent of the BPO market today, employing 240,000 workers – and is growing faster than the overall market. The report also found impact sourcing has 15 to 40 percent lower attrition than traditional BPO workers.

Panelist Mark Pfeiffer, Executive Vice President, Teleperformance, said his company, like many traditional BPOs, unintentionally started hiring impact sourcing workers and rapidly expanded the practice when they found enthusiastic, motivated andqualified labor pools who pass literacy and competency testing requirements and have far lower attrition.

Pfeiffer suggested that buyers reconsider contract requirements for providers’ workforce to have two years of college because it can eliminate potential qualified applicants – and quipped that this rule would have taken Bill Gates out of the running for a job.

2009 2011 2013

22%

14% 14%

49%

56% 52%

26% 24% 23%

3% 4% 7%

1% 2% 5%

Much less important Less important Stay the same More important Much more important

Recognitions by the Global Sourcing Council, plus research by Accenture, Avasant, Monitor and others have contributed to the awareness of – and demand for – outsourcing with social impact.

csr motIVaTes toP TaleNTIt is also becoming apparent that social responsibility makes sense to conduct business more effectively. Peter Ankerstjerne, aCOP, Chief Marketing Officer at ISS, delivered a keynote on CSR & Employee Motivation. In it, he argued that CSR is one of the keys for companies to win “The War for Talent.”

Some companies are even using impact sourcing examples to reposition their own organizations as being innovative firms using social impact and to recruit employees with like-minded goals. Fossil, for example, in efforts to recruit millennials sent a team to Kenya to demonstrate first-hand the work it is doing with impact sourcing provider Digital Divide Data (DDD).

“buyers wIll expect To auDIt The csr actIVITIes oF ProVIDers who wIll NeeD to DeMonsTraTe theIr caPabIlITIes.”

– Bill Hefley, COP, Ph.D., Clinical Associate Professor, Katz Graduate School of Business & College of Business Administration, University of Pittsburgh

Iaop 2014 csr surVey resulTs


resultsFroM lIVe auDIence

PollINg at The 2015

ouTsourcIng

worlD suMmIT

Customers, advisors and providers at the keynote presentation on IAOP’s 2014 CSR Committee Survey on Feb. 18 weighed in on these live audience polling questions, reinforcing the importance of CSR, fair operating practices and impact/rural sourcing to the industry.

47% Frequently/ Sometimes

35% Rarely

10% Never

8% Always

Is CSR a factor in your (in your customers’) outsourcing decisions?


What are you doing about impact/rural sourcing?

Not currently using impact sourcing and no plans to consider

22%

Currently utilizing internationally

4% Currently utilizing domestically

18%

Currently utilizing both internationally and domestically

16% 40% Likely to consider within the next two years

13% Community involvement

Labor

30%

11% Human rights

8%Environment

37%Fair operating practices

Consumer issues

2%Which CSR issue is most important in your (in your customers’) outsourcing decisions?


Impact sourcIng FIrms DelIVer to global braNDs

DIGITAL DIVIDE DATA (DDD): Established in 2001, DDD pioneered this movement. With more than 1200 employees in Asia, Africa and North America, DDD was included among IAOP’s 2015 Global Outsourcing 100 as the first exclusive Impact Sourcing Service Provider. This recognition was possible because increasingly clients such as AOL, Ancestry.com, Fossil and Intuit – as well as business partners like Cisco and Microsoft – recognize that DDD delivers quality BPO services and significant social impact. This past year, DDD extended their platform onshore to offer back office services from an operation in Virginia, powered by workers from the U.S. military community. (See case study.)

INVINCIBLE OUTSOURCING: This provider operates in South Africa, where many youth have little or no opportunity to study further after high school. Those fortunate enough to start college find even after they have completed their qualification, they are unable to find jobs because employers generally don’t seem them as work-ready. Invincible Outsourcing partners with organizations such as Genpact, Microsoft, Accenture and SAP to develop skills critical for their business. For example, Genpact set up infrastructure for up to 500 seats for back office outsourcing work. Invincible Outsourcing employees study part-time for Business Administration degrees, while working at the Genpact delivery center based at the university.

CLOUDFACTORY: This firm recently received venture funding to expand its video and audio transcription service with the help of workers in Kenya. CloudFactory is a for-profit company with a strong social mission that evaluated more than 70 countries before settling on Kenya as the best location to build its transcription service. The company uses its Kenyan workforce to transcribe videos for a variety of companies including ESPN.

Disadvantaged workers are finding new jobs and new hope for the future through employment at emerging Impact Sourcing Service Providers (ISSPs), as well as traditional BPO firms who often unintentionally hire impact workers and customer organizations who are putting these engaged individuals to work in various positions – from back office to digital services.

The trend has continued to grow over the past year since we saw four ISSPs share their different approaches to outsourcing in an entertaining game show style panel at The 2014 Outsourcing World Summit in Orlando. The Shark Tank meets American Idol presentation drew a large crowd. Intrigued, slightly amused and very impressed, the industry took note. (See PULSE issue #11).

Here is a look at several ISSPs whose strategies and achievements have helped make social responsibility a new norm.

ProVIDers maKIng Impact sourcIng the sTaNDarD

sTory by: mIchael chertoK Photos courtesy oF DIgITal DIVIDe Data & saMasource


DAPROIM AFRICA: Also in Kenya, Daproim Africa serves clients from different continents. The firm has employed and impacted over 3,000 disadvantaged youth by improving their and their communities’ living standards. Their Digital Campus Connect (DCC) Initiative aims to increase long-term employment of underserved youth, primarily from rural parts of Kenya, through soft skills training. DCC prepares them for future employment opportunities through hands-on work experience and enabling them to earn an income to support the pursuit of higher education.

TRANSCEND: Based in Palestine, Transcend offers bi-lingual English/Arabic - and other language - services to companies in the Levant, Gulf states and beyond. Clients include telesales to the Gulf States; inbound customer service for a leading U.S. language tuition company; customer feedback, Net Promoter Score and other services for a regional mobile phone company; and medical science graduates providing on-call telephone interpretation to facilitate patient/doctor com-munications in U.S. hospitals. Most recently, the American Psychological Association has started a software development project with Transcend.

SAMASOURCE: Samasource acts as an intermediary to source work from clients and partners with a set of delivery centers to get the work done using their own proprietary platform. Among other clients, the firm is delivering product classification work to Walmart. (See case study.)

The Rockefeller Foundation has been a key driver enabling the growth of an Impact Sourcing sector with the BPO industry. This is especially the case in Africa, as part of a seven-year, $100 million Digital Jobs Africa program. The foundation’s specific goal is to improve a million lives by connecting high-potential but disadvantaged youth in Africa to sustainable digital employment opportunities and skills training. For more, see: www.rockefellerfoundation.org/blog/impact-sourcing-opportunity-ahead.

the rocKeFeller FouNDaTIon acts as catalysT

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Socially targeted outsourcing can work anywhere. Although Digital Divide Data (DDD) was founded in Cambodia and expanded its operations to Laos and Kenya, its most recent operations office actually is located in Virginia.

“How can DDD help people in the U.S.?’ was a frequent question posed to me over the years,” said CEO Jeremy Hockenstein. “It’s a question that’s been on my mind too. I’ve been constantly on the lookout for an opportunity to apply our model to help Americans.”

The need undoubtedly exists. While the U.S. unemployment rate is at its lowest since 2008, more than 750,000 spouses of the men and women serving in the U.S. military face significant obstacles pursuing their careers. Frequent changes of station of their active duty partners contribute to patchy resumes. In addition, they cannot simply pick up and move to locations with more or better jobs.

Higher than average unemployment among military spouses is not due to less education. According to a survey conducted by Syracuse University, 96 percent of military spouses possess at least some college credit, yet they are three times more likely to be unemployed. Among female military spouses who were employed, 90 percent are underemployed.

The main reason behind such high unemployment and underemployment rates is that most employers cannot structure a work environment to meet their needs when their spouses are deployed. Managers often prefer to hire civilian candidates, with the belief that these hires are more likely to stay.

“We learned that American corporations are eager to make a difference for veterans and military spouses in a way that meets business objectives,” said Hockenstein. “They just need a vehicle to tap into the talents of the military community.”

So when the opportunity arose to expand operations into the U.S. in 2014, DDD created a BPO company that har-nesses military spouses’ talents: Liberty Source, a public benefit corporation, based in historic Fort Monroe, Virginia.

Case Study: Impact Sourcing In Action

Liberty Source delivers processes such as finance and accounting services to clients seeking a flexible, cost-effective solution that not only creates social impact, but also gives corporations the opportunity to retain delivery of some of their key businesses processes onshore. Currently with 100 employees, Liberty Source aims to eventually employ 600 military spouses and members of the military communities.

“Military spouses understand the importance of selfless service,” said Stephen Hosley, Liberty Source’s CEO. “Our staff are not only committed team members with a ‘whatever it takes’ attitude; they are also quick learners, eager to put their educations to work.”

An additional benefit of Liberty Source’s American work-force includes a cultural awareness that is often necessary for BPO work. To mitigate high attrition rates due to relo-cation or redeployment of the spouses of their employees, Liberty Source plans to create a virtual delivery model that will allow staff to take their work to their spouse’s next post.

Liberty Source has signed into a multi-year BPO relationship with AOL to handle finance and accounting processes. These services include Order to Cash, Procure to Pay, Credit and Collections, Expense Management and Record to Report processes.

“AOL is an ideal founding client for Liberty Source,” said Deborah Kops, Chair of Liberty Source and a DDD board member. “AOL shares our vision about the importance of both the quality of delivery and the quality of the customer experience when outsourcing business processes. What’s more, they share our passion to tap into the abundantly skilled community of military spouses that make our onshore model a competitive alternative to offshore outsourcing.”

DDD’s experience with Liberty Source mirrors their experience abroad—people flourish when they have a line of sight to better prospects through employment and training. Whether putting high school graduates to work in Africa or Asia or employing military spouses at home, creating impact is a global business.

aol’s bacK oFFIce IN VIrgINIa


“We learned that American corporations are eager to make a difference for veterans and military spouses in a way that meets business objectives. They just need a vehicle to tap into the talents of the military community.”– Jeremy Hockenstein CEO Digital Divide Data


Case Study: Impact Sourcing In Action

Walmart’s hub for e-commerce innovation for the company, @WalmartLabs, is utilizing the power of impact sourcing. Partnering with Samasource, the business has assembled a high-performing dedicated team to fulfill its business need while also providing sustained long-term employment opportunities for workers located in Kenya who were coming from marginalized backgrounds.

“We knew we weren’t going to get the level of specialization that we needed straight out of the gate, so we focused on getting folks who are intrinsically driven to learn and to contribute to the success of the project and allowing them to enrich their personal portfolio for career development,” explains Ram Rampalli, Director of Product Management for Walmart Labs.

Samasource recruited a team of workers to serve as an extension of the Walmart Labs team, a group it could communicate with directly and manage as if the team members were in house. Samasource established a dedicated team that met the company’s desired criteria and assisted in the on-boarding process to ensure a smooth transition. Though the team was based in Nairobi, Kenya, it was managed from San Francisco, Calif.

Next, @WalmartLabs worked with Samasource to develop an in-depth training program that provided an overview of the e-commerce sector as well as a deep dive into the classification and cataloging aspects of e-commerce. Although the workers had the basic computer skills needed to perform the tasks, the custom curriculum included in the program made them subject matter experts in the e-commerce space, Regex, and client-specific content.

Though the additional training required an upfront time commitment from @WalmartLabs, it proved to be a valuable investment for the company in the long run, as the quality of the work and dedication from the team far exceeded Walmart’s expectations. Completed tasks received a 92 percent quality rate across all projects, and there was very little turnover in the team, as for many of the workers, this was a valued opportunity that would only come once in a lifetime.

“It’s what this team brought to the table that made the experience of working with Samasource so different from the experience of using other vendors,” says Rampalli. “We were working with people who really cared about what they were doing, and it showed in the quality of the tasks they delivered back to us.”

Given the hands-on demand and fast-paced nature of the project, Samasource and @WalmartLabs determined that a project manager onsite at @WalmartLabs would help keep the team organized and efficient. This was a unique role that proved to be incredibly beneficial, as the project manager provided a direct line of communication between both Samasource and @WalmartLabs’ teams. Also, having the project manager deeply integrated into day-to-day processes made the Samasource teams more familiar with the project and adaptable to its ever- changing needs and priorities.

“When we first started the project, we didn’t know the exact scope of what we would be giving to the workers. We had an idea but needed to see it in action,” notes Rampalli. “Samasource let us be flexible and experiment until we found the perfect solution.”

In collaboration with Samasource, @WalmartLabs achieved high-quality output and the ability to turn projects around much more quickly than other vendors could (be it crowdsourcing or traditional BPOs) all while giving work to people who may not have otherwise had the opportunity.

“It’s often hard to match the right opportunity with the right initiative. We had this project and knew we needed help but wanted to try something innovative and untraditional,” says Rampalli. “We could’ve easily worked with another vendor that could provide us with a trained team that was ready to go, but we chose to go with Samasource because we wanted to invest in impact sourcing and to provide long-term employment opportunities for people. What we found in the end is, I hope, a partnership that will continue to benefit the organization for many years to come.”

walMarT e-coMmerce hub uses Impact sourcIng to reach goals


“When we first started the project, we didn’t know the exact scope of what we would be giving to the workers. We had an idea but needed to see it in action. Samasource let us be flexible and experiment until we found the perfect solution.”

– Ram Rampalli, Director of

Product Management for Walmart Lab


CSR INTERVIEW

Why should companies care about CSR? Who would know better than the winners of this year’s Global Outsourcing Social Responsibility Impact (GOSRIA) Award: ISS. The Denmark-based facility management company has made a solid commitment to corporate responsibility as part of its vision of being the world’s greatest service organization.

“Corporate Responsibility is central in accelerating the ISS Way,” said Joseph Nazareth, Group Vice President and Head of Health, Safety & Environment and Corporate Responsibility.

Nazareth accepted the third annual GOSRIA award from IAOP and ISG at a gala luncheon during The 2015 Outsourcing World Summit held in Phoenix, Arizona. ISS selected FedCap, a New York-based nonprofit, to receive the monetary award from ISG, which will also be matched by ISS.

In addition to the group award, ISS also has won CSR awards for its commitment and initiatives in various countries last year, including Estonia, Greece, U.K., India and France.

PULSE talked with Nazareth about the importance of CSR to their stakeholders, how it gets employee buy-in and the GOSRIA honor.

P: Why is CSR so important?

J: CSR is extremely important to our major stakeholders: our employees, customers and investors. CSR includes health and safety, labor practices, human rights, environment and anticorruption.

Our employees deliver our services. They are our business. It’s important we look after them and make sure they go home safely to their families every day – that’s our number one priority. In our industry, it is also important that we pay on time, we pay the right wages, and they work the right hours. That’s something that sets us apart from our competitors.

CSR is part of the value proposition we provide to our customers. It’s important we protect their brand and reputation, and that we provide them with credible and effective risk management in terms of labor law, and health safety and the environment.

The last thing our customers want to find out is that one of their suppliers has been injured or hasn’t been paid or there’s child labor on their workplace because at the end of the day, it’s them that gets into the press.

We ensure our customers that we have the right processes in place so we don’t have child labor, that we pay on time and our wage slips are transparent, and we allow our employees to join unions. We provide environmentally-friendly products that reduce the impact on the environment and do not have negative health effects on their employees.

Another aspect that is very big right now in CSR is anticorruption. It’s getting extremely high government focus in the European Union and U.S. We ensure customers that our employees, particularly management, understand the red flags in terms of corruption and competition laws, and what to avoid.

Pulse talKs csr wIth awarD-wINner Iss

“Corporate Responsibility is central in accelerating the ISS Way.” – Joseph Nazareth, Group Vice President and Head of Health, Safety & Environment and Corporate Responsibility.

by sanDy FrINTon


In terms of investors, Socially Responsible Investors (SRI) are growing by the minute. They represent 11 percent or greater of the huge investment community. When they look at a company to invest in, they don’t just look at the bottom line, they also look at a company’s performance in terms of the environment, anti-corruption, labor practices and human rights. They also are an important stakeholder in our business.

P: How do you get employees to buy into CSR?

J: It’s a continuous process. To achieve our company vision, we need to create a sense of purpose and meaning for our employees to their work. For example, if someone is working in an airplane factory, they are not just cleaning, they are helping to build a plane.

We do that through meeting their basic needs, like getting paid on time, and recognition, such as our Apple awards, where employees are recognized for their efforts with anything from Apple iPads to a trip to the Big Apple. We want to get into the hearts and souls of our employees. In 2015, we hope to come up with new and innovative ways to create purpose for our employees and get them excited to come to work every day for ISS.

P: What does winning the GOSRIA award mean to ISS?

J: It’s a great honor and we are humbled to receive it. The competition is extremely tough. We were extremely proud to win this award. It’s a recognition of what we are doing from a group level and in every country we operate in. We are succeeding in trying to create this purpose and making our employees proud to work for ISS.

about The gosrIa awarD The IAOP/ISG Global Outsourcing Social Responsibility Impact Award (GOSRIA)

was established in 2012 to recognize service provider excellence in CSR activities.

IAOP’s CSR Committee and ISG specifically seek to acknowledge the achievements

of outsourcing service providers committed to a CSR program that fosters

community, workplace training, communication, environment and giving.

Past winners include: CBRE in 2012 and Accenture in 2013. For information on

applying for the award, contact [email protected].

Joseph Nazareth, ISS, (center) accepts the GOSRIA award from Todd Lavieri, ISG Americas President and Debi Hamill, IAOP CEO.


VIEW FROM THE

C-SUITE


Appointed in 2011 as Executive Director of the Georgia Technology Authority and State Chief Information Officer, Rhodes immediately was thrust into leading a massive IT infrastructure and telecommunications outsourcing initiative already well underway.

I N T E RV I E W B Y S A N DY F R I N TO N

CALVIN RHODES COLLABORATIVE INFORMATION OFFICER The “C” in Calvin

Rhode’s CIO title could stand for “Collaborative.”


P GTA delivers network, voice and infrastructure services for state agencies. (see box on page 53). In the delivery of services, we follow our own policy that we set for the state. We make sure we have modern, well designed, standard-ized systems to deliver services securely. Of course, that gets more complicated as technology changes and we begin to embrace cloud solutions.

“It takes people to get things done. It’s giving people the freedom to make decisions and get the work done, and making sure your teams escalate issues outside their sphere of influence to make change. ”P: How is working in the private and public sector different?

C: Much is the same: It takes people to get things done. It’s giving people the freedom to make decisions and get the work done, and making sure your teams escalate issues outside their sphere of influence to make change. What’s a bit different is the ability to make quick decisions. If I wanted to make a purchasing decision on the private sector side, I could do that very quickly. On the govern-ment side, there are strict processes to follow. We’ve been entrusted with taxpayer dollars and we want to make sure we don’t violate that trust. The systems I worked with in my past were on a smaller scale. We’re the eighth largest state; there are 10 million Georgians. A decision can have an impact on people’s lives and we want to make sure that impact is positive.

The scope is very different. We have more than 80 agencies with many varied missions. We focus much of our attention on the 15 agencies that account for 70-plus percent of the state spend in IT. We also deliver our services statewide to all 159 counties, including rural areas without a lot of broadband capacity.

P: Tell me about the Georgia Enterprise Technology Services (GETS) program?

C: In 2009, GTA transitioned IT infrastructure services to IBM and managed network services to AT&T as part of an initiative begun in 2007 to move the state’s IT operations

rogress was slow and frustration high for the major privatization initiative. The complexity was substantially more than was anticipated. The two large service provider contracts totaled more than a combined $1.3 billion. As complexities grew beyond expectations, timelines fell behind and the culture struggled to embrace an outsourcing model.

Enters Rhodes from the private sector with nearly three decades of business and technology experience, including bringing a new set of eyes and a desire to get all parties working together to achieve something significant for the state. His team was well equipped and equally dedicated to the mission and years of hard work in front of them.

Under Rhode’s leadership, Georgia’s IT environment has been transformed with improved IT service delivery, increased infrastructure reliability, improved data security, financial transparency, improved operational reporting and maturing technology management. He has taken a collaborative approach to engaging state agencies in the effort, leading with flexibility without compromising the mission.

The state of Georgia has been recognized as a technology leader, ranking among the top five states in the nation in the 2014 Digital States Survey with a grade of A minus. PULSE talked with Rhodes, also a member of IAOP’s strategic advisory board, about the lessons he’s learned over the past four years, how he entered this role in the government sector and his latest read that has him think-ing big thoughts about what governments can accomplish.

P: Tell me about your roles as Executive Director of the Georgia Technology Authority and State Chief Information Officer.

C: I was appointed by Governor Nathan Deal in January 2011, and I was reappointed after he won a second term last fall. Currently, there are only three state CIOs across the nation who have served as long as I have. State CIOs tend not to last very long.

In my CIO role, there are two primary focus areas: policy and oversight. The state of Georgia is a federated model when it comes to IT, so state agencies have a lot of respon-sibility and authority in their application space. We have responsibility for implementing good policy that supports protecting citizens and their information and privacy.


I N T E RV I E W: CA LV I N R H O D E S

out of its ‘horse and buggy days’ and into the 21st Century by turning to private-sector leaders in technology service delivery. This privatization initiative, known as Georgia Enterprise Technology Services (GETS), has continued to evolve, enabling us to more easily incorporate new services and additional providers.

P: What were the initial drivers for outsourcing?

C: We had legacy systems and were dealing with frequent outages. We needed to ensure the security of our systems. We needed standardization and the ability to respond quickly to incidents. We needed a modern environment capable of leveraging current technology. We had a large percentage of our IT workforce, about 20 percent, that was eligible for retirement, so staffing was still another factor we needed to address.

P: Tell me about the challenges of outsourcing in your environment.

C: When we look across the states and territories, there are not many states that have embraced outsourcing to the extent Georgia has. For some states, the decision may be politically driven; others have simply chosen to operate under a different model.

The cultural change an outsourcing environment brings has probably been our biggest challenge. Not only were we trying to adopt a business model that was very complex, we were trying to use it in a culture completely unaccustomed to outsourcing.

P: What was the environment like when you started?

C: On my first day, I wanted to review the contracts. Four enormous binders were brought in and I still didn’t have all the documents. To sum it up, ours are probably two of the largest, most complex contracts that I’ve dealt with. And the relationships with service providers and customer agencies quickly become just as complex.

P: What are the key things you learned from outsourcing?

C: Your relationship with your service provider is critical. It’s making sure service providers are in lock step with you as you’re trying to bring new things to the table – such as making a change in security or incorporating innovation in a way that wasn’t even contemplated when the contract was signed.

CALVIN RHODES AT A GLANCE

CURRENT ROLE: Executive Director of the Georgia Technology Authority and State Chief Information Officer

OVERVIEW: His team of 165 IT professionals (plus another 1000 IT members from its two primary service providers) deliver information technology solutions and services

PRIOR ROLES: Managing partner and founder of Paladin Investments, a private investment company, from 2009-2011. Worked for Fulton Paper Company for 27 years, serving as executive vice president and CIO/Vice president for information technology

EDUCATION: Graduate of Darton State College and Georgia Southwestern University and holds a degree in computer information systems. Earned an MBA from the University of Phoenix


protective services, health services and many others, are up and working as one would expect.

We went into the outsourcing deal with agencies running their own IT shops. We consolidated many of those into a single environment. We have real disaster recovery, another area where we had deficiencies. We’ve consoli-dated about 23 different agency service desks into one 24-7 service desk.

“We have real disaster recovery, another area where we had deficiencies. We’ve consolidated about 23 different agency service desks into one 24-7 service desk. ”

Both of us have to be healthy to be in a long-term relationship. Communication becomes extremely important, especially if you’re trying to change direction, so we can all understand why the change is important. The criticality of keeping all agencies informed and in alignment so we can accomplish that new goal is a task unto itself.

P: What have the results from outsourcing been?

C: We’re very excited to be nearing completion of our transformation (consolidation and modernization) work with IBM. All our servers and desktops will be 60 months old or newer. Laptops are on a 36-month refresh schedule. We have seen a notable reduction in outages in our transformed environment, and when an incident does happen, the standardization within our new environment makes managing the issue more straightforward. More importantly, services that citizens rely on, including the many services from public safety,

Calvin Rhodes with Georgia Governor Nathan Deal


I N T E RV I E W: CA LV I N R H O D E S

P: Tell me about the voice and network services being done by AT&T?

C: We have a redundant network with two security nodes. If there’s a problem with our network out of the Atlanta node, it can roll over to Tennessee. It literally takes longer to make the decision to roll to the other node than for it to actually happen. The focus is on security and standardization.

We’ve refreshed phone systems across the state. We have many agencies that need call centers for the citizens they serve, and we have more modern platforms they can leverage to meet their business needs.

P: Has the culture changed where it comes to outsourcing?

C: There are many different stories spread across the enterprise, many positive and some negative. It’s hard-won ground; getting to this point has been painful because there was so much to be done in a short time period.I think our service providers would tell you they expected

synergy as they started moving through some of these areas, but we had so many truly unique business functions that were managed separately for so long, there was little in common. It was really going into an agency and finding out they had three to four businesses within that agency and trying to work through that.

As we have matured in our environment, it’s my belief the culture has started embracing the outsourcing. Together, we are seeing that the pain of implementing large-scale change has payoff in terms of a more modern, secure IT enterprise. More importantly, the model ensures that the environment stays current.

P: What is the next stage of maturation in your outsourcing journey?

C: In March, we awarded a contract to Capgemini America Inc. as the Multisourcing Service Integrator (MSI) for the GETS program. They will be responsible for coordinating and overseeing the integration of technology


services by multiple service providers. Part of our desire to add an MSI into the equation was to more easily introduce innovation. We’ve designed this as a ‘plug and play model’ and we want the ability to turn down solutions without having to renegotiate contracts. Technology changes quickly, and we need to have the ability to move technology in and out quickly, and it may or may not be with the same service provider. Capgemini brings proven capabilities to our service delivery model, enabling us to accommodate multiple service providers and respond more nimbly to agency needs and IT marketplace changes.

P: Are you moving technology to the cloud?

C: We spend a good deal of time on cloud discussions. With the many federal regulations we operate under, we make decisions on a case-by-case basis. Critical applications still reside in the state data center. A good example of our use of cloud technology is the state portal, www.georgia.gov, which is running in the Amazon cloud and we’re seeing a lot of benefits. The website provides information and services from more than 115 state agencies and links to city and county government websites. Through GTA, about 75 state agency websites use Drupal, an open-source web publishing platform hosted in the cloud.

P: How do the economy and budget cycles impact you?

C: Government funding cycles are always a challenge for IT. Once budgets are approved, it’s difficult to make adjustments until the following fiscal year. During the economic downturn, there were a lot of states who did not have the ability to invest in IT or chose not to do it. Because of our outsourcing model, we had moved from a capital expenditure model to an operational expenditure

model and were able to at least do the things we needed to do to keep the lights on, and keep our modernization effort moving forward. We were able to consume only what we needed, keeping costs in check as we adhered to our mission.

P: Who are your role models?

C: I was fortunate early on to have had a boss who taught me the importance of getting the right people in a room to make a decision and being 100 percent in alignment when you walk out of the room. I learned the importance of supporting a decision that benefits the entire organization, even if it isn’t in my unit’s best interest. Those lessons continue to influence my actions. In my current role, having the right people on the team is critical – this includes those working for the state as well as our service providers.

P: Has public service been rewarding?

C: Absolutely! You quickly see firsthand how our role impacts people’s lives through the each agency’s mission. It’s been enlightening and gratifying to see a team of individuals get behind an effort that wasn’t going as well as anyone wanted it to and getting everyone aligned and making the impossible, possible.

P: What are your favorite reading materials?

C: I’ve just started reading “If We Can Put a Man on the Moon - Getting Big Things Done in Government” by William Eggers. The author draws parallels between the hurdles NASA had to overcome and the challenges government faces every day. Doing things that haven’t been done before is always difficult. You have to under-stand outside influences and know what is mission critical.

“ It’s been enlightening and gratifying to see a team of individuals get behind an effort that wasn’t going as well as anyone wanted it to and getting every-one aligned and making the impossible, possible. ”


The Georgia Technology Authority (GTA) currently manages the delivery of IT infrastructure services to 85 Executive Branch agencies and managed network services to 1,300 state and local government entities. IT infrastructure services encompass mainframes, servers, service desk, end user computing, disaster recovery and security; 15 agencies receive all of these services through GTA, while the remaining agencies may receive two or three of these services. Managed network services include the state’s wide area network and voice.

OUTSOURCING LESSONS LEARNED BY THE STATE OF GEORGIA• Foster a culture of partnership for all stakeholders (including agencies and service providers)

• Collaborative communication is critical; always look to improve how stakeholders can participate in a meaningful way

• Implement the right Service Level Agreements to motivate the right behavior

• Identify clear roles and responsibilities for integration

• Incorporate innovation into your contract

• Balance service provider’s ability to deliver and customer’s ability to receive service (maturity)

• Hold stakeholders accountable

• Accept and address your organizational deficiencies

ABOUT THE GEORGIA TECHNOLOGY AUTHORITY

Global facility services group ISS says service providers have a unique opportunity to grow business by demonstrating to governments and taxpayers how they can provide better value for money. Current social, economic and demographic trends underline the need for fresh thinking and new practices in the public sector, says global facility services provider ISS.

The company’s conclusion is based on thorough research by Copenhagen Institute for Future Studies, which has carried out in-depth interviews with key leaders, administrators, users and researchers in the area of public services and welfare. It has been published in the white book ‘2020 Vision – Future of Public Sector Outsourcing.’

“We believe that ISS and the rest of the service industry need to play an active role to promote and facilitate outsourcing in the public sector. We can do this by demonstrating how we can provide services of better, smarter and higher quality by offering innovation, economies of scale and flexibility. Welfare societies are certainly in need of it.”– Peter Ankerstjerne, aCOP, Head of Group Marketing at ISS

Historic High Pressure on WelfareIn several developed countries, the public sector is now responsible for up to half of all domestic economic activity; but the global financial crisis and following economic downturn have put an enormous pressure on public sector spending.

For instance, in the United Kingdom, researchers estimate that by 2017, the share of public sector workforce will decrease significantly. Continued low economic growth in mature markets and the fiscal reality of various demographic bulges mean that this pressure is likely to remain across developed economies in the coming years.

At the same time, citizens will continue to place high demands on the public sector. This demand and budget restraints put policy makers under pressure to find solutions as to how they can provide increasingly better and more individual public services but with less money to spend.

Underdeveloped Outsourcing in Public SectorThis is both a challenge and an opportunity, according to Ankerstjerne.

“Service providers can play a central role in society in terms of helping governments to secure the provision of high quality services; but we need to step up and prove ourselves as partners in value creation rather than just service providers,” he says.

While the public sector has increased in size as well as significance, it has had less focus on securing efficiency and effectiveness - value for money - compared to how focused the private sector is on constantly improving.

Public Sector Outsourcing

Presents Opportunities

for Service Providers

Global facility services group

ISS says:

service providers have a unique opportunity to grow business by

demonstrating to governments and

taxpayers how they can provide better value for money.

CONTRIBUTED BY ISS

NVIEWPOINT


“We know this from experience. In public sector processes, we need to move from input specifications to output - and ideally outcome - specifications in order to deliver services at the right quality levels and price. We do believe that by working closer together, we can do this much more effectively than today,” Ankerstjerne says.

Outsourcing in the public sector remains at a much less developed stage than in the private sector. And according to ISS, there are several obstacles that the industry as a whole must work together to remove before the public sector will be more open to outsourcing to private sector companies.

Myths and Prejudice Concerning Private ProvidersFirst, there are myths and prejudice that outsourcing means poorer quality and lay-offs.

“You would think that a better service at lower cost would be welcomed, but that is not always the case. This is often due to some bias concerning private business providers. We just have to acknowledge this and overcome it through documentation and dialogue,” says Ankerstjerne.

ISS has made it part of its business strategy to engage actively and openly with the media and unions as well as local and national decision-makers to discuss the pros and cons in relation to outsourcing in the public sector.

“We should not shy away from being open about how we operate and engage in dialogue. This must also be the case, when outsourcing of a public service means that people will have to change jobs, if there is a disruption in service, or if we fail to meet expectations temporarily,” he says.

“We should see the open dialogue and increased trans-parency as a way to build trust, learn from our customers, actively engage our employees, as well as the citizens we are there to serve. It will allow us to constantly improve our services and demonstrate the added value.”

Dialogue and transparency are key to partnerships and to building and shaping lasting relationships between service providers and the public sector. Ankerstjerne stresses that dialogue per definition goes both ways. Public sector officials need to address several issues to ensure the best possible outcome when engaging in outsourcing.

Fresh Approach NeededA central challenge is the public sector’s assumption that outsourcing contracts should be static, one-directional and time-limited. The public sector needs to revise its

expectations towards “smart contracts” that are flexible and can be developed based on successes and failures.

The issue is directly linked to the input-output dominant measurement practices that are the standard in contracts today. According to the white book, this seriously limits the scope for service providers to innovate and create better and cheaper services.

“We really need to convey the understanding that outcome matters much more than input, for example, the value we create for our customers compared with the time we spend on delivering our services,” says Ankerstjerne.

Start the Debate NowAccording to the white book, improvements also can be found in terms of framework.

“We believe that we, as an industry, should push for an evaluation of the European Union’s public procurement rules. They, together with other factors, sometimes act as a barrier for the innovative value-adding solutions we can offer, because they do not allow governments to buy a service if the input is not tightly defined,” adds Ankerstjerne.

“Some of the challenges we face cannot be addressed overnight. In some cases, there are no easy or simple solutions, but we sincerely hope that we, together, can stir an open, constructive public debate. It needs to start now, and present solutions to current and future challenges to the welfare of the societies where we operate.”

• founded in Copenhagen in 1901

• one of the world’s leading facility services companies

• ISS offers a wide range of services such as: Cleaning, Catering, Security, Property and Support Services as well as Facility Management

• Global revenue amounted to DKK $74.1 billion in 2014

• ISS has more than 510,000 employees and activities in more than 75 countries across Europe, Asia, North America, Latin America and Pacific

The white book is available for download on the ISS Group website: http://tinyurl.com/nq8zdn7

ABOUT THE ISS GROUP


PULSE interviewed four industry leaders in domestic/rural outsourcing throughout the United States for this edition of Hot Spot. They include: Rich Etzkorn, Executive Managing Director, DTZ; Monty Hamilton, CEO, Rural Sourcing; Deborah Price, Esq., V.P. of Business Recruitment, Missouri Partnership; and Laura Willard, Project Manager, North Dakota Department of Commerce.

Outsourcing is no longer just about cost savings. The days when it was viewed as a mere business tactic also are long gone. Outsourcing is a strategic tool that is essential to remain competitive on the world stage…and sometimes that stage is right in your back yard.

“From a delivery point of view, we have three software development centers in Arkansas, Alabama and Georgia, but overall our marketplace is anywhere in the U.S.,” said Monty Hamilton. “The marketplace is white hot in terms of demand for our skill set. A lot of what we’re seeing right now is companies looking to fill gaps in their own internal skill sets with new technologies. We’re able to help them close those gaps.”

In recent years the United States has become one of the most desirable regions for organizations looking to expand their IT and business-services delivery centers. According to Laura Willard, domestic sourcing has grown tremendously, with organizations opting for smaller, rural locations, keeping costs much lower and allowing these companies to be competitive on a global basis.

“Technology is changing faster than ever and it is really

impacting businesses,” said Willard. “We think North Dakota is well-positioned to take advantage of the opportunities, addressing the challenges of these trends due to the cooperation that we have among our industry, our government and our educational entities.”

Added Rich Etzkorn, “There is a push for the revitalization of rural areas that haven’t seen the economic boom a lot of the rest of the U.S. has seen. What used to be considered very remote, rural areas are now connected. It’s not about major cities anymore; it’s about anywhere. As long as the talent, desire and ability are there, services can be provided.”

According to Etzkorn, who works in St. Louis, the Midwest has a great lifestyle, great cost of living and a wealth of talent that is available because they’re surrounded by high-quality universities.

Deborah Price added there has been extensive growth in rural onshoring with business support service estab-lishments, of which there were 950 in Missouri in 2013, employing close to 23,000 people. In the past three years Missouri has ranked in the top 10 fastest growing states for

HOTSPOT

THE UNITED STATES:DOMESTIC/RURAL SOURCING

OPPORTUNITIES ABOUND


“YOU DON’T HAVE TO BE ANYWHERE TO BE EVERYWHERE

TODAY.”

– RICH ETZKORN, DTZ

Location: North America, south of Canada and north of Mexico – bordering both the North Atlantic Ocean and the North Pacific Ocean.

Population and Language: 319 Million people. No official language but 79 percent speak English and 13 percent speak Spanish.

Economy: The largest and most technologically powerful, market-oriented economy in the world and the second-largest industrial output, globally.

USA A Domestic Sourcing Hub©

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tech jobs and continues to expand. Back office operations and call centers for the biosciences, health sciences and services, financial services and IT industries also are big in Missouri.

“We’re seeing projects with jobs that traditionally were outsourced offshore now looking onshore,” said Price. “Missouri’s BroadbandNow (MoBroadbandNow) initiative that was launched in 2009 brought rural communities from across the state, online. This was a huge initiative and priority for the state.”

SPEED, TOTAL COSTS AND RISKS ARE DRIVERS

Hamilton adds there are three primary drivers clients are looking at when choosing domestic sourcing as an alternative for where they do business:

• The Need For Speed – Companies want things done in months now, not in years.

• Total Cost of Ownership – Hamilton says: “It’s not as simple as $8 per hour and I’ll get this much productivity. It’s what will that cost me when I have to manage it and put my own staff on it, deal with the time zone struggles, cultural barriers, lack of business domain expertise. All of those things begin to add up into produc-tivity, which has real costs associated with them. With rural/domestic sourcing there are less gaps to fill, getting people on site, getting up to speed with business process, less learning curve, etc.”

• Regulatory Risks in Working with Heavily Regulated Industries – In industries like pharmaceuticals and health-care, there is a real concern in making sure who has access to data, where the data sits and making sure all regulations are followed.

“We’re encouraged by what we’re seeing in the market-place,” said Hamilton. “It’s an exciting time to be in this space and be a bit of a disruptor. I love disruptive business models. In the past, the knee-jerk reaction if you had a shortage of IT skills was to outsource that to India; a shortage of customer service skills, you outsourced it to the Philippines. Now we’re finding a real cost-competitive alternative to that model. Many companies are seeing that instead of offshore outsourcing, they can outsource here inthe U.S. and get a quality product for a very comparable cost.”

Another trend worthy of mentioning, according to Willard, is that in recent years and going forward, more foreign companies are looking for U.S. locations to better serve their U.S. customers.

IN SUMMARYThe most diverse country in the world, the United States of America is a melting pot of cultures; a place that can’t easily be summed up in agreement because it truly is a country of personal experience. One thing is

for sure – in the land of opportunity, the American Dream is alive and kicking.

THE LAND OF OPPORTUNITY

Story by: Kate Tulloch-Hammond, IAOP

Interested in getting involved with IAOP’s recently launched Domestic Sourcing chapter? Please contact Julie Huson, IAOP’s Director of Global Chapter Operations, at [email protected].


Dear Colleagues:

IAOP hosted a class of about 20 for the year’s first public North American Certified Outsourcing Professional (COP) Master Class and Governance Workshop, in Atlanta, Ga, from March 30 to April 2.

Catherine Giles, COP, from Liberty Mutual, reported back to us that she was pleasantly surprised to see so much real-world application and expertise embedded in the course, as opposed to other certifications that she said speak only to ideal and often unrealistic tools and methodologies.“It was clear the COP certification is as much based on real lessons learned from the application of the standards as it is on best in class, or proven, approaches to the work,” she says. “I also recommend the training for the project management and cross functional, holistic view of the outsourcing lifecycle. It reminds me - and others I work with - of the high expectations on anyone practicing this profession at this level.”

Catherine’s comment about the relevance of project management to the IAOP standards on which the training and certification are based is highlighted in the article about adding PMI professional coursework to our course catalog for certification points.

She also cites the cross functional holistic view of the outsourcing lifecycle, which is apparent when looking at the Atlanta class training roster that included practitioners from financial services, pharmaceutical, retail, manufactur-ing and R&D, Information Technology (providers), and various advisory and legal firms.

Being able to create standards, or common denominators if you will, that are relevant to a broad range of outsourc-ing practitioners, on all ends of the outsourcing deal, give the IAOP training and certification its wide appeal in the industry. Another hallmark of the COP training is being able to use tools such as the IAOP templates to make the broader processes applicable to your specific, every day needs.

Please contact us if you feel that you or your organization would benefit from IAOP training - whether it’s at a public class or in house to fit your scheduling needs.

Best regards, Pamela O’Dell

PROFESSIONALPULSE

PAMELA O’DELL is the Director of Corporate & Professional Development at IAOP and can be reached at +1.845.452.0600 ext. 121 or at [email protected].

LETTER FROM THE D IRECTOR

IAOP KICKS OFF 2015 RIGHT WITH A FOUR-DAY COP MASTER CLASS AND GOVERNANCE WORK-SHOP IN ATLANTA. ONE COP PARTICIPANT PRAISES ITS REAL-WORLD PRACTICAL APPROACH.

IT REMINDS ME – AND OTHERS I WORK WITH – OF THE HIGH EXPECTATIONS ON ANYONE PRACTICING THIS PROFESSION AT THIS LEVEL

“”- CATHERINE GILES, COP, FROM LIBERTY MUTUAL


Congratulations

New COPs

MOHAMMED AHMED, COP – Service Delivery Manager, Walgreens

TAMBRA CIBOCH, COP – Vendor Management Specialist, Blue Shield of California

MICHAEL DOBBERTIN, COP – Vice President STEM Operations, KellyOCG

MICHAEL KOPER, COP - Solutions Architect - Mfg. & SCM, KellyOCG

RALF LORENZEN, COP – Vice President and Global Solutions Architect, KellyOCG

Mark Your

CalendarsCOP Master Classes

with Outsourcing Governance Workshops:

JUNE 18: Toronto, Ontario

SEPT. 21-24: Denver, Colorado

SEPT. 22-25: The Netherlands

COP Master Classes Only: NOV. 25-27:

The NetherlandsGovernance Workshop Only:

OCT. 21: Frankfurt, Germany

Webinars: MAY 20, JUNE 10, JULY 1, JULY 22

COPs Can Earn

PMI Points

Project Management Institute (PMI) Professional Development courses are now pre-accredited within IAOP’s Outsourcing Professional Course Catalog to earn designation points for COP certification.

These include successfully completed face-to-face, e-Learning and On-Demand sessions. Current COP designation holders also can use PMI courses towards their continuing education credits.

The IAOP Outsourcing Professional Standards (OPS) include project management skills covered by PMI professional development courses, which are integral for the successful design, implementation and management of outsourcing projects.

Of the 10 high level OPS, these three specifically cover key skills that intersect with good project management:

• Ability to manage an organization’s end-to-end outsourcing planning, design and implementation

• Ability to create, lead and sustain high end performance project teams

• Governance, which includes the ability to design and implement an interdependent Project Management Office for managing across multiple organizations and addressing project portfolio management, project execution, and project tracking and reporting

Candidates in the process of completing their COP application and documenting knowledge and experience now may earn pre-accredited points for any PMI Professional Development course completed that touches on these skills.

Points earned are detailed in the IAOP Outsourcing Professional Course Catalog (OPCC) available at www.iaop.org. Many COP designation holders also hold and maintain various designations from PMI.

For additional details, please contact [email protected].

TORONTO, ONTARIO: JUNE 15-18

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PULSEFLASH

S

O W S 1 5 T H R O W B A C KThere were so many great highlights at The 2015 Outsourcing World Summit in Phoenix, it was hard to capture in one issue. Here are some more of the memorable moments from networking in the Global Services Mall and IAOP/PULSE Publisher’s Cup Golf Tournament to the Hall of Fame and Food for Thought luncheons.



Abbott Labs; AbbVie; Accenture; Ahilia; Allstate; API Outsourcing; Avenue Management;

Baker & McKenzie; Ben Gurion University of the Negev; Bleum; Bristol-Myers Squibb; Cargill; CBE

Companies; Chain IQ; Cigna; Cisco; Citibank; Connections Consult; Datrose; Deloitte; Deluxe

Corporation; Diebold; Discover Financial Services; DTZ; Equifax; Ernst & Young; E-Smart Systems

d.o.o; Fannie Mae; Firstsource Solutions USA, Inc.; Foley & Lardner; Freescale Semiconductor;

GE; Global Outsourcing Group; Grupo Contax; HCL; HP; Infosys; Integrated Corporate Services;

Intel; ISG; ISS; JAMPRO; JSS Academy of Technical Education; Kambu; Kelly OCG; Kelly Services;

KelTrust Systems Inc.; Kilpatrick Townsend LLP; Kirkland & Ellis LLP; KPMG; Lirea International;

LivIT; Lucide bv; Mallinckrodt; Manulife; Merck & Co.; Metlife; Minacs; Missouri Partnership;

MUFG Union Bank; National Bank of Canada; NCR; Neo Group; NNIT A/S; OMV AG; Orange Business

Services; Otsuka Pharmaceuticals; Plato Technologies Inc; pliXos; PNC; RBC; Rio Tinto; Saudi

Mechanical Industries; Serco; ServiceEngine; Singtel; Spansion; Sprint Nextel Corp; State Street;

Steelcase; Supportlane LLC; Syntel; Tech Mahindra; Telecom Ecole de Manament Evry France;

The Goodyear Tire & Rubber Company; The Guardian Life Insurance Co; The University of

Nottingham; Tilburg University; UCB; University of Capella; US University; Vantage Partners; Vee

Technologies; Voya; Waverly Software; WDS, a Xerox Company; Wells Fargo; Xerox; ZF Towers;

and Zurich Insurance.

For information on IAOP membership, click here or email [email protected]

THANKS FOR

JOINING! IAOP is pleased to welcome new and renewing corporate and professional members from:


MEMBER BENEFITS & SERVICES JOIN WITH THE INDUSTRY LEADERS Membership in IAOP provides access to an extensive array of services, and just as importantly distinguishes organizations and professionals as leaders in the field of outsourcing.

•Customer Corporate Membership– Organizations that are currently outsourcing or are considering one or more outsourcing initiatives should become Customer Corporate Members of IAOP. This membership provides organization-wide access to the association’s research, training, certification, and networking programs - all designed to help companies achieve better business results through outsourcing.

•Provider/Advisor Corporate Membership – Outsourcing service providers and advisory firms should join IAOP as Provider/Advisor Cor-porate Members. This membership provides the same organization-wide access to IAOP’s research, train-ing, certification, and networking programs as Customer Corporate Membership, but also includes member-only sponsorship opportu-nities that serve the marketing and business development needs of these companies.

•Professional Membership – Professional Membership is available to individuals either as part of their company’s corporate membership or on an individual basis. This member-ship serves the needs of practitioners working in the field of outsourcing whether as customers, providers, or advisors. In addition, it provides these professionals with direct, personal access to association services.

MEMBER SERVICES Many of these services are included as part of IAOP’s Professional or Cor-porate Membership, with discounts available for use beyond the level provided. Some services are also available individually at non-member rates. These include:

•PULSE Magazine – Available bi-monthly online, our e-zine features in-depth coverage of the industry, issues, trends, geographies and vertical sec-tors and functions; thought leadership and case studies, probing Q&As, C-level interviews and profiles; as well

as exclusive and insider coverage of IAOP events, programs, awards, re-search, training and certifications and surveys. Members get a free subscrip-tion, advertising discounts as well as the opportunity to submit content.

•IAOP’s Knowledge Center, Firmbuilder.com – IAOP’s online repository houses more than 1,000 articles, includ-ing chapter meeting presentations, conference proceedings, industry whitepapers, research articles and more. Members have full access.

•Global Chapter Network – Through its active and expansive chapter network, IAOP members can share their expertise and find knowledge on best practices for specific industry segments, topics and geographic areas

within outsourcing. Access to any and all chapter meetings is included in IAOP membership.

•Conferences & Events – IAOP hosts the world’s best-known and most highly-respected executive confer-ences on the topic of outsourcing, including The Outsourcing World Summit.® Become a member and attend at a discount.

•Outsourcing Professional Certification Frameworks (OPCF) – IAOP’s trainings and certifications are the industry’s de facto. Whether you are inter-ested in getting educated through the COP Master Class or becoming a Certified Outsourcing Professional (COP), there is a path that suits your needs. Members receive substantial discounts.

•Global Supply Risk Monitor (now Supply Wisdom) – A unique Web-based product that enables clients to moni-tor, predict and manage the various risks in their services supply chain across countries, cities and suppliers, in real-time. Corporate Members receive one free monitoring service.

•Outsourcing Professional Body of Knowledge (OPBOK) – A cohesive and comprehensive outline of the commonly accepted practices and skills required to ensure outsourcing success. IAOP members receive a 25 percent discount on the Outsourcing Professionals’ Guide to Corporate Responsibility eBOOK.

For more detailed information on membership and member services, visit www.IAOP.org/MemberServices

Readers of PULSE can receive 10 percent off of standard membership rate of $345. Go to: www.IAOP.org/PMregistration and enter offer code IAOP-PM25.

Special Professional Membership Offer[

[

PULSE March/April 2015 63

CHAPTER

ROUND UPPULSE ZSpotlight on NY Chapter

Deloitte Consulting provided an overview on trends and developments into outsourcing location strategy, followed by a lively panel debate that discussed different locations around the globe for buyers to consider as premier outsourcing destinations.

Participating on the panel were: Simon Tarsh, Director of Global Business Services, Deloitte; Michael Serghiou, Director External-ization, Merck; Patrick Corcoran, Director Analyst and Advisor Relations, Luxoft; Hongfei Huang, CEO, Insigma U.S. Inc. and Jose A. Diaz Infante Casar, Managing Director, Financial Services & Insurance, SoftTek.

Infante of Softtek presented three strengths of Mexico: proximity and right placing; quality of resources; and competitive pricing. Luxoft’s Corcoran said buyers should consider Europe for its talent pool, scalability and cultural affinity. Huang of Insigma added that China offers customers a scalable talent pool, infrastructure and geopolitical stability.

Serghiou of Merck said buyers look for: a low-cost labor force so the company can invest in new technologies, a steady supply of labor that is capable of delivering services without interruption and available skill sets.

The venue was sponsored by Infinity Consulting Solutions (ICS). Networking refreshments were sponsored by Softtek.

Past Events: Feb. 4, meeting themed “Outsourcing Things you Never Thoughts you Could,” featuring speakers from Wipro, Nexient (Formally Systems in Motion), Expand the Room and HP who inspired interactions among the various buyers, providers and advisors in the audience.

UPCOMING NOT TO MISS: Save the dates for Sept. 2 and Dec. 2

MAY 19 – Nordic Chapter MeetingJUNE 4 – Contact Call Center Chapter WebinarJUNE 9 – DACH Chapter MeetingJUNE 25 – Chicago Chapter MeetingJUNE 25 – Rocky Mountain Chapter Meeting

CHAPTER CALENDAR

A LOOK AT IAOP CHAPTERS IN THE U.S. IAOP has geographic chapters in: Atlanta, Charlotte, Chicago, Midwest, Minnesota, New England, NY, NorCal, Rocky Mountain, Southern California and Texas.


CHAIRS: Deloitte, Morgan Stanley, Hess Corporation, Wipro Technologies and Softtek

RECENT EVENTS The “Battle of the Service Delivery Destination” and networking at the New York Chapter meeting on May 6 at Juniper Bar got high marks from members.

“This event marks a milestone with the NY Chapter in terms of the value of networking with colleagues in the outsourcing industry, and achieving the highest attendance for any previous NY Chapter event,” said Chapter Co-Chairs Donald Mones, COP, Operational Risk Management, Morgan Stanley and Morgan Davis, Principal, Business Model Transformation, Deloitte Consulting LLP.“We can’t wait to begin planning for the next event.”

Photos provided by Softtek. From left to right Morgan Davis, Deloitte; Michael Serghiou, Merck; Patrick Corcoran, Luxoft; Simon Tarsh, Deloitte; Donald Mones, Morgan Stanley; Jose A. Diaz Infante, Softtek; and Hongfei Huang, Insigma.


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