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GlobalizationToday

The 2011 Outsourcing World Summit

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February 21-23 | Renaissance Esmeralda | Indian Wells, California

K *" / " / 1 ) ) *" 5 % * " $ " $ ( / * 5 "* ) In its 14th year, the International Association of Outsourcing Professionals’ (IAOPŽ) Outsourcing World Summit explores how outsourcing professionals can lead their companies to success in this # . ! " ! ! " " ! outsourcing opportunity, or simply learn from the best in the business on what you can do today to improve your outsourcing outcomes, this event is for you. Join more than 500 buyers, sellers and advisors — your colleagues and peers — from around the world for an in-depth program of learning, networking and business improvement.

* $6 8 9 WWW.IAOP.ORG

I very much enjoyed The Outsourcing World Summit! It is the best professional conference I have ever attended (and I have been to quite a few in my lifetime). #$ % ' * +$/ 2 3

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Plus...“Tough Questions Customers are Reluctant to Ask� – A provocative panel discussion featuring provider-customer teams And... “Results of IAOP’s Annual Member Survey� – With t he support of Accenture, IAOP takes the pulse of the industry and shares where companies are headed and why

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The Official Magazine of the International Association of Outsourcing Professionals

GlobalizationToday December 2010

The Rise of Tools and Technologies and the Fall of Labor Arbitrage? Roundtable of outsourcing experts debate the issue (page 20)

RECENT HEADLINES HAVE YOU NERVOUS ABOUT THE SECURITY OF YOUR DATA? WE CAN HELP.

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VISIT WWW.IAOP.ORG/ISACA FOR MORE INFORMATION AND TO REGISTER.

INSIDE December 2010

7 PUBLISHER’S NOTE 8 NEWS FEED What’s new and noteworthy in global commerce

14 BLOG BEAT Outsourcing news and commentary from the blogosphere

15 THINKING DIFFERENTLY New ideas for taking on globalization’s toughest challenges

17 DEALING WITH INFORMATION OVERLOAD How to get ahead of the information visibility/ tracking adoption curve and react to changing business expectations

28 CHECK POINT Spotting and diagnosing issues in outsourcing relationships

32 OPTIMIZING HR DELIVERY CHANNELS The trends in the adoption of self-service, its emerging channels, and how employers can drive a successful strategy toward effectivity

36 TURNING A NEW PAGE 20

THE RISE OF TOOLS AND TECHNOLOGIES AND THE FALL OF LABOR ARBITRAGE?

An overview of publishing outsourcing, plus the issues, challenges, and trends that surface with it

40 A QUEST FOR PROGRESS The IAOP encourages career development through workshops, certifications, and a newly launched chapter

Roundtable of outsourcing experts debates the issue 48 WELCOME TO THE IAOP GLOBAL COMMUNITY Snapshots from IAOP chapter meetings, COP Master Classes, and regional advisory boards around the world

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PUBLISHER’S NOTE

Self-service has also risen as a major channel in human resources, aimed at delivering better, accurate services to employees at an affordable cost. How can employers drive a successful strategy to optimize delivery channels? This and more on page 32. And while we’re on the subject of development, James S. Hill and Namami Ghosh tackle how publishing has successfully penetrated the outsourcing industry. Read Turning a New Page for the full feature.

Our holiday gift: a jam-packed issue! First off, our cover feature story. With the outsourcing industry experiencing an upsurge in the use of advanced tools and technologies, this question remains a pressing concern: is this the end for labor arbitrage? In this issue, we gather experts from provider, customer, and advisor organizations to debate on the issues that surface with these tools, such as multi-sourcing and value improvement versus cost reduction. Facilitated by the International Association of Outsourcing Professionals (IAOP), the participants were able to shed light into a hot topic today. Find out what they have to say on page 20.

Got problems with your outsourcing relationships? Turn to page 28 and learn how a health check will help address them. Our regular columns are must-reads, too. IAOP Chairman Michael Corbett gives a review of what he calls “surprises” in 2010, while Dr. Giles Nelson shares tips on how to deal with information overload. Last but certainly not the least, we are pleased to announce that we have been receiving a tremendous amount of articles written by our awesome readers. If you haven’t submitted yet, feel free to share your news, columns, analyses, interviews— basically anything and everything related to outsourcing—by visiting www.globalizationtoday.com and clicking on Become an Editorial Contributor. In true Globalization Today fashion, we end this year with a bang. Enjoy this issue and the holidays, everyone!

Founder and publisher

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NEWS FEED

NEWS Feed WHAT YOU NEED TO KNOW IN THE WORLD OF OUTSOURCING

BEYONDCORE WINS MOST INNOVATIVE www.up-con.com

BeyondCore won the Most Innovative award at UP 2010, a cloud-computing conference sponsored by Microsoft, PwC, CA, Verizon, KPMG, and Wipro. More than 100 companies competed for this award, from which nine finalists were selected. The Audience Choice version of the award was won jointly by Salesforce. com and Pareto Networks.

CAPGEMINI EXPANDS DELIVERY CAPACITY IN LATIN AMERICA www.businesswire.com

Capgemini, one of the world’s foremost providers of consulting, technology, and outsourcing services, announced that it is growing its BPO footprint in Latin America with the expansion of its delivery centers in Chile, Brazil, and Guatemala. The centers currently employ 1,500 business process outsourcing (BPO) specialists, with capacity for more than 2,000 employees and additional room for expansion. In addition, Capgemini is increasing the scope of its BPO services in the region to include a range of finance and accounting, procurement services, and customer operations management solutions. The centers currently service five prominent North American and global clients, including Unilever, Coca-Cola Enterprises, and International Paper. Capgemini’s Latin America delivery network is comprised of new centers in the Campinas region of Sao Paulo; Gaspar City in the state of Santa Catarina, Brazil; and in Guatemala City, Guatemala; as well as existing centers in Buenos Aires, Argentina;

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Today December 2010

Sao Paulo and Agua Branca, Brazil; and Santiago, Chile. All seven centers are part of Capgemini’s Rightshore delivery model, which leverages a global delivery model to place processes, services, and/or functions in the best locations around the world, tailored and coordinated to meet clients’ specific business goals.

Latin American centers are attractive to clients with operations and customers in North and South America due to the close proximity and time-zone compatibility for clients in North America, in addition to Spanish and Portuguese language fluencies for Latin America and other global clients. Specifically, Capgemini’s center

in Guatemala provides customer-service and collections capabilities, as well as a full range of Finance & Accounting (F&A) services for clients looking for Englishand Spanish-speaking language skills. In addition to providing F&A services, Capgemini’s centers in Chile and Brazil are also able to provide Tax, Audit Control, and Compliance (Sarbanes Oxley) services for English-, Portuguese-, and Spanishspeaking clients. “With the establishment of our Latin American centers, Capgemini continues to expand its global delivery capabilities, with the potential for more than 2,000 seats in the region,� said David Poole, vice president and head of Americas Business Process Outsourcing, Capgemini. “We’re leveraging Capgemini’s unique approach, which utilizes business insight methods and solutions—combined with our deep knowledge of the F&A market—to service our clients, including several multinational businesses, allowing us to drive efficiencies and yield significant cost savings for them.�

NEWS FEED

BILL BLOCKED IN US SENATE, INDIA INC. HAPPY www.caclubindia.com

In a relief to the Indian IT industry, the Republicans in the US Senate blocked an anti-outsourcing bill that would have deterred American firms from shifting jobs to competitive locations overseas. The 53-45 defeat vote blocked the bill, as it fell six votes short of passage. At least 60 votes were needed to clear the Republican procedural hurdle to the Democrat bill. It proposed a ban on government contractors from using American taxpayers’ money to move jobs offshore. A relieved India Inc., which lobbied hard against antioutsourcing campaign in the United States, hailed Republicans for blocking the bill. The setback to the anti-outsourcing campaign came a week after a NASSCOM delegation comprising representatives of top IT companies such as Infosys, Wipro, and TCS visited the United States and lobbied with the key congressmen and American corporations. FICCI Secretary General Amit Mitra said, “We believe that the majority of the US Senate has kept in mind the larger interest of the US economy, its corporations, and the global economy.” As part of efforts to boost employment in the United States, Obama was vigorously pushing to end the tax break for companies who ship

jobs overseas, saying it should go to firms who create jobs in America. India, which already holds at least 50 percent of the global outsourcing market, has become the world’s back office as Western firms set up call centers and number-crunching and software-development outlets to cut costs.

Democratic backers, who vowed to make the vote a campaign issue in the second November Congressional election, claimed that Republicans have undermined

their efforts to create jobs. On the other hand, Republicans and business groups dismissed the bill as a political stunt that would increase taxes on companies and undermine job growth. In what was seen as an electoral populist move of the Democrats, the Creating American Jobs and End Offshoring Act aims at small manufacturers and included a payroll tax exemption for firms that encourage jobs to the United States. But it also contains provisions to prevent businesses from deferring US taxes on the income they make from foreign subsidiaries. Several business groups such as the National Association of Manufacturers (NAM) were strongly opposed to the anti-outsourcing legislation. It had sent a letter to senators, arguing the measure would make US corporations less competitive and hurt job creation. Terming the bill as an election gimmick, Republican senator Orrin Hatch slammed the Democrats for their “height of irresponsibility” that would put the US economy at “greater risk.” “Desperate times call for desperate measures and the majority is showing how desperate they are with a bill that increases the tax burden on job creators and ship much-needed US jobs overseas,” he said.

BOURNEMOUTH TO BEGIN £150 MILLION OUTSOURCING DEAL IN DECEMBER www.publictechnology.net

A £150 million outsourcing deal has been passed by Bournemouth City Council, allowing private company Mouchel to take the reins of several services in the city for the next 10 years. Mouchel, which in recent months has had its contract with Middlesbrough City Council extended by an additional five years, will run Bournemouth’s revenues, benefits, ICT, and facilities management. In December 2009, the company was also awarded a place on Buying Solutions’s Software Applications Solutions framework agreement, enabling it to vie for contracts across the public sector, including customer

management, enterprise resource planning solutions, and information management applications. The agreement with Mouchel was passed by Bournemouth City Council by 34-12, with Conservative councilors arguing the deal was necessary as the city tries to manage a 40 percent budget cut over the next 10 years. Mouchel Executive Director Tony Williams moved to reassure citizens and claimed service users “won’t see any changes on December 1. It will be the same staff, doing the same jobs, for the same residents, from the same place.”

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NEWS FEED

UK MOD LAB AWARDS ÂŁ60 MILLION OUTSOURCING CONTRACT TO STERIA www.computerweekly.com

Now that CBRE has survived a near-death experience of debts by its $2.2 billion acquisition of Trammell Crow, the deal is looking smarter. By buying the realestate firm, CBRE became the world’s leading provider of services to Fortune 500 companies that own or lease property but want others to lease and manage it. To cut expenses during the downturn, a growing number of corporations are outsourcing such duties, providing CBRE with a growing business at a time when uncertainty continues to grip the commercial real-estate industry. Indeed, CBRE’s outsourcing business has accounted for 40 percent of its global revenue this year, compared with 15 percent in 2006. In the first nine months of 2010, the unit raked in a record $1.3 billion in revenue. New clients include American International Group Inc., NYSE Euronext, and United Technologies Corp. in Europe. Competitors that don’t rely heavily on

providing outsourced services haven’t fared as well. Shares of Grubb & Ellis Co. are trading at roughly $1.15 a share as its investment-management business struggles. That service accounts for roughly 50 percent of the company’s earnings before interest, taxes, depreciation, and amortization, said William Marks, an analyst at JMP Securities. CBRE’s stock, meanwhile, has soared about 40 percent since the beginning of the year, to more than $19 a share. The outlook was much more dire in March 2009, when the company was grappling with insolvency concerns. Part of the problem was the 2006 acquisition of Trammell Crow, which added roughly $1.5 billion of debt to the company’s balance sheet. In late 2007, a year after the acquisition, the company opted to borrow to finance a $635 million share repurchase, at $22 a share. That was before its stock fell to

$2.36, an all-time low, in March 2009. And last year, the company had to raise $650 million by selling equity at a low price, diluting shareholders. But CBRE survived those dark days, partly thanks to its outsourcing business. The outsourcing services provided a solid revenue stream during most of last year as the company’s traditional businesses of brokering sales and leasing transactions suffered because of the slow economy. While big corporations were avoiding making major leasing decisions, they also were cutting costs by hiring realestate companies to run their buildings and manage their space needs. AIG’s decision to hire CBRE last month will help the company “realize significant efficiencies and cost savings in our business operations worldwide,� said Joe Barile, AIG senior vice president of global corporate real estate and client services, in a written statement.

solutions that support CDC’s global public-health initiatives. Under CIMS, Accenture will compete for work in two areas—information management services and IT infrastructure services—with ceiling values of $3 billion and $1 billion, respectively, over the 10-year period.

Capgemini’s Americas Outsourcing Services business has agreed a two-year contract extension with health-science company Nordion Inc. The company said it will continue to provide Nordion with infrastructure-management support, including server, desktop, helpdesk, storage, backup, and network outsourcing services.

NEW OUTSOURCING DEALS www.outsourcing-center.com

VF Corporation—the world’s largest apparel company with leading lifestyle brands such as Wrangler, The North Face, Lee, Vans, Nautica, and 7 For All Mankind—and CSC, a global leader in providing technology-enabled solutions and services, announced the signing of a seven-year information-technology services outsourcing agreement. Under the agreement, CSC will bring new, innovative approaches to VF’s business use of IT, covering a broad spectrum of services, including service desk, end-user support, network, distributed computing, and data center management. The Centers for Disease Control and Prevention (CDC) has selected Accenture as a prime contractor on its 10-year, indefinite delivery/indefinite quantity CDC Information Management Services (CIMS) contract that will be used to acquire a full range of IT services and

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Today December 2010

The US Navy’s Space and Naval Warfare Systems Command (SPAWAR) awarded Accenture a five-year contract to provide engineering services covering hardware and software maintenance in support of the Navy’s efforts to modernize its ships with mission-critical systems. The SPAWAR Integrated Data Environment and Repository (SPIDER) contract was awarded under the Navy’s SeaPort-e contracting vehicle. Accenture will deliver engineering services necessary to maintain, modify, deploy, and sustain all of SPIDER’s systems.

NEWS FEED

HP EXPANDS BEST SHORE GLOBAL SOURCING MODEL www.outsourcing-center.com

HP Enterprise Services announced the expansion of Best Shore, its global services delivery model, by designating six countries as global delivery hubs that will grow to support increasing client demand for cost-efficient, scalable services aimed at effectively meeting business needs. This expansion is part of the $1 billion investment HP announced in June to transform and grow its Enterprise Services business. Bulgaria, China, Costa Rica, India, Malaysia, and the Philippines are the designated delivery hubs. These mature HP Best Shore locations operate in time zonerelevant countries and will offer a significant employee base that can deliver various highly scalable services to clients across the globe. These centers will also offer multiple capabilities in each location, including applications, infrastructure technology, and business process outsourcing services. Global delivery hubs are designed to improve the client experience by offering access to deep industry and technical expertise that can tailor sophisticated solutions to meet unique client requirements. They also provide more options for cost-efficient services. Additionally, the hubs will help reduce

delivery complexity by offering multiple services from a single location. All Best Shore delivery teams closely collaborate with onshore account and support staff while leveraging HP technologies, best practices, and intellectual property to deliver seamless, consistent services and lower risk for clients. In addition to providing more access to skills and scale, the hubs allow HP to address the growing domestic markets in these regions. The hub locations offer large, employee-friendly campuses with career-advancement and skill-development opportunities along with other amenities.

Last month, HP opened two new locations that serve as Best Shore hubs. In Malaysia, HP opened its state-of-the-art, multipurpose HP Global Center Cyberjaya, which is the largest facility of its kind and the single largest investment by a multinational technology leader in Malaysia. HP also opened a new Information Services Center in Suzhou, China, which will provide outsourcing and applications services to clients in China and around the world. HP has additional delivery centers worldwide that are critical to its overall sourcing model, providing specific skills, languages, and time zones that clients require.

OBAMA CHANGES HIS TUNE ON INDIA OUTSOURCING www.sourcingfocus.com

US President Barack Obama, who has been openly critical of offshoring to India, seems to have changed his tune during his state visit to the country. What seems to have changed his mind is the signing of some major trade deals worth about $15 billion as an “important step in elevating India to one of the US’s top trade partners.” The US president said that the deals with India will create 50,000 jobs back home, while the purchase of US cargo planes by India alone will create 22,000 jobs in America. According to Obama, both the United States and India were “operating on

stereotypes that have outlived their usefulness. Whenever I’m asked about Indians taking away our jobs, I want to say, you know what? They’ve just created 50,000 jobs,” he stated. “US companies are creating jobs with tech in the US and Indian businesses will take those technologies to expand growth and jobs in both countries,” he said. “We agreed to keep working to reduce trade barriers and protectionism.” “As far as India is concerned, India is not in the business of stealing jobs from the United States,” said Indian Prime Minister Manmohan Singh. “The outsourcing

industry, I believe, has helped to improve the productive capacity and productivity of American industries.”

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BLOG BEAT NEWS AND COMMENTARY FROM BLOGGERS AROUND THE WORLD CAMERON ADMITS MISTAKES OVER IMMIGRATION CAP—OR DOES HE? www.computerworlduk.com

by Martyn Hart

Sometimes there can be no greater show of strength for a man than admitting you simply got it wrong. If the Prime Minister’s recent hints that he will listen to the protests from major international firms and look to water down the planned immigration cap tell us anything, it’s that he’s not afraid to reconsider his policies. But is he really? David Cameron’s announcement that intra-company transfers “should not be included in what we are looking at [for the immigration cap]� will almost certainly be heralded as good news for the outsourcing industry. But is it a coincidence that this news comes amidst new warnings that a forthcoming European trade treaty with India will circumnavigate the proposed cap in any case by allowing multinational firms to transfer unlimited numbers of Indian employers to the UK? Perhaps—perhaps not. What’s clear is that any immigration cap as initially proposed by the coalition government would have been very bad news indeed. In a worst-case scenario, it could have played a major part in ensuring that a number of industries were short of skilled workers. For instance, both the healthcare and IT sectors are hugely dependent on the influx of highly skilled workers from abroad. So perhaps the announcement of the government’s about-turn was inevitable?

Either way, it’s clear that if the government is to find a way to make the recently announced public sector cuts work, it will have to lean heavily on suppliers of outsourcing—many of whom are dependent on the specialist skills provided by those from other countries. In this context, it makes more sense that the government would make a U-turn on its all-inclusive attitude toward the cap—the last thing they want to be seen to be doing is throwing the baby out with the bathwater, and they will understand that they need to make full use of all resources at their disposal if the cuts are to be seen as a success. Perhaps, then, it’s not impossible to speculate that the government has not, in fact, demonstrated the laissez-faire attitude toward its policies that many have credited them for. The proposed immigration cap as it stood was a big mistake for them, but let’s be honest. This about-turn perhaps has had very little to do with consulting the outsourcing industry for their views, and much more to do with the fact that they have realized that the government has backed itself into a corner. Maybe this was signaled last week when the government CIO John Suffolk said that he had told Indian companies to “Bid, bid, bid� for government business!

APOTHEKER SIGNALS POST-HURD ATMOSPHERE AT HP BY UPPING R&D www.cbronline.com

by Gary Flood

Recently signed HP CEO Leo Apotheker has told Wall Street he plans to up research and development (R&D) spend at the organization. The move signposts a clear break from the Mark Hurd era, as the firm released strong end-of-year numbers last month. He’s even gone so far as to say he’ll work on a new “secret sauce� that will make its consumer technology better serve business buyers as well as provide more “compelling� software. Transferring consumer innovations to business products will provide “an enormous competitive advantage,� he said. It must at this point be stressed that Apotheker can’t claim that much credit for the strong year, as he’s only been in post three weeks—apparently in business class for most of it, anyhoo. So let’s take a moment here to congratulate the tough cost-cutting regime of Hurd, who was leading the firm for the overwhelming bulk of this time. In any case, the new guy told financial analysts he won’t end anytime soon his predecessor’s cost containment moves even if he does end up spending more money to develop and sell the firm’s technology. Spending increases in R&D and sales will be funded by cutting other operational costs, Apotheker announced, confirming that, “We will never stop driving for efficiency,� he said. Indeed, spend more he clearly will, as he also said on the con-call that HP will continue to make acquisitions, especially in the software market, and he wants to work on upping sales in emerging markets, too. (The market and

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Today December 2010

shareholders are waiting for more details on how and when HP’s investments will turn into viable products, it has to be said.) Apotheker made the remarks in the context of end-of-year profits that were bigger than analysts’ estimates. As a result of that and his remarks, its stock, which had dropped 16 percent since January and 7 percent since its last CEO Mark Hwwwurd was ousted in August, has started climbing again. Hurd had cut R&D from the pre-2005 average of 4.1 percent to more like 2.4 percent before he quit. But in its fourth quarter, HP’s R&D had already been up, again by 16 percent to $814 million from a year earlier. Apotheker seems determined to re-motivate HP staff, as he will bring back in at least some salary raises in the current fiscal year. HP expects fiscal 2011 sales will hit between $32 billion to $33.5 billion. Its 2010 figures, meanwhile, show a strengthening corporate market balancing— more or less—a softening consumer one, on yearly revenue of $33.3 billion, up from $30.8 billion. All in all, Apotheker has been very busy since he was appointed trying to connect with HP employees, customers, and industry partners as another sign of his new broom attempt, and there was the inevitable joke in the call about setting world travel records as a result. We’ll have to see if all those frequent flyer miles translate into a truly reenergized Hewlett Packard. And if Apotheker can bring it back to Inventing again, good—we think—for the ICT market as a whole, too.

THOUGHT LEADER

THINKING DIFFERENTLY By Michael F. Corbett

New Ideas for Taking on Globalization’s Toughest Challenges News flash: outsourcing is no longer an evil business plot! After becoming the proverbial whipping boy for much of the recent mid-term election season (negative ads painting one candidate or another as an “outsourcer” filled the airwaves), I must say that I was simply amazed to hear President Obama’s comments in India on November 6—a mere four days after the polls closed. On that date, the US President told a gathering of government and business leaders from both countries that the notion of outsourcing as a net drain on the US economy was part of a “caricature of India as a land of call centers and back offices that cost American jobs.” He went on to say that “these old stereotypes, these old concerns ignore today’s realities. In 2010, trade between our countries is not just a one-way street of American jobs and companies moving to India. It is a dynamic, two-way relationship that is creating jobs, growth, and higher living standards in both our countries.” Go figure! In four short days, outsourcing went from an evil business plot to enrich shareholders and executives at the expense of workers and their families, to an “old concern” that fails to recognize the importance of the global economy in creating wealth in both developed and developing countries alike. I must admit that when the International Association of Outsourcing Professionals (IAOP) included “political shifts” as one of the 10 trends to watch for in 2010, not even we could have imagined a shift of this magnitude. Although we’ll have to see how much backtracking takes place when the President next addresses the topic on US soil, there’s no denying the simple fact that the stake has been set. Everyone who is part of the outsourcing industry can now point to these comments from a sitting Democratic President as a proof point for what we’ve been saying all along—that outsourcing is one of the most powerful tools available today for building better companies and better economies.

the industry performed in 2010. One surprise: revenue among this year’s applicants grew at twice the pace of the year before—10 percent. Although there may have been a dearth of mega-deals, make no mistake about it; more companies are outsourcing more of their operations than ever before and the industry is enjoying amazing growth. Jobs—not quite so hot. Sound familiar? Well, it appears that outsourcing companies are no different than most others when it comes to hiring. They’re pushing for greater efficiency and, perhaps, deferring hiring just like everyone else. Jobs at these top outsourcing companies grew by only 4.5 percent last year compared to 6 percent the year before. The IAOP had also predicted that companies would be “tooling up with technology” and certainly the movement toward cloud computing (maybe better called Internet computing) and software as a service has to be a contributing factor as well. Call it allshoring. As discussed in an earlier column, the IAOP’s prediction that new destinations would emerge and become part of the global outsourcing landscape has certainly come to pass. What we probably didn’t put enough emphasis on was rural sourcing, which really got a lot of press coverage this year—and deservedly so. The bottom line: outsourcing is a global phenomenon and companies are working on their own and with their network of providers to leverage the best talent wherever and whenever they need it. They’re looking for solutions, not shores. Uncertain about consolidation. Industry consolidation is certainly taking place—Accenture-Ariba, Thomson Reuters-Pangea3, CapgeminiIBX, and others—but the size and pace was less than we expected, particularly given the mega deals (HP-EDS and Xerox-ACS) the year before. Looks like uncertainty won out in 2010 with a lot of shopping but not as much buying. We’ll see what happens in 2011.

OTHER SURPRISES IN 2010

Revenue growth powers back. Although judging for the 2011 Global Outsourcing 100 has just begun, the data provided by the companies participating this year is already yielding important insights about how

Michael F. Corbett is the founder, chairman, and chief strategy officer at IAOP. He believes it’s time think differently about the world we live and work in.

Finally, as 2010 comes to a close, a quick thank you to everyone who has made Globalization Today’s inaugural year a huge success. Launching a new publication is a daunting task at anytime and even more so against gale force economic headwinds. But perhaps that’s what makes Globalization Today so special—it’s truly a new publication for a new era. What do you think? E-mail me at michael.corbett@iaop.org with your thoughts about the most interesting outsourcing developments in 2010. Or let me know about examples of thinking differently on any aspect of globalization and business that you’d like to see explored in a future column. Happy holidays!

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THOUGHT LEADER

DEALING WITH INFORMATION OVERLOAD By Dr. Giles Nelson

How to get ahead of the information visibility/tracking adoption curve and react to changing business expectations As consumers, we now take for granted that we can obtain instant access to information. One example is online retailing. We expect to be able to go online, search a store for a particular good (perhaps after using a price-comparison site), and find out whether any inventory currently exists. That’s a remarkable change from the days where an order might be submitted blindly and it would take up to 28 days for delivery. Think of the way consumers access airline information: passengers can view up-to-theminute changes in ticket pricing, view and change seats, and check in as well as obtain live information on expected arrival times. Tracking a parcel is another example—again something we now take for granted. Socialmedia status updates are very real-time oriented. And it’s become so only quite recently. It was in May 2009 that Facebook launched streaming status updates. This ability for us to see and change such information ourselves, instantly, is now pervasive.

market and to trade automatically. This has led to higher trading volumes and faster moving markets. Advantages of this, such as higher productivity for traders and more liquidity in the market, are widely acknowledged. In a fast moving market, however, there are dangers when unexpected things occur. On May 6, 2010, the Dow Jones index suffered a very sudden and sharp fall. One of the reasons cited for this occurring was that a trader entered a “fat finger” trade where the wrong price or amount was entered—a simple case of human error. The wider point here is that key organizations in the trading process such as banks, exchanges, and regulators don’t have the right real-time information available to be able to not only understand what exactly is going on, but to prevent situations such as this occurring in the first place. Too often, information is available to these organizations afterwards, when actually it’s too late to do very much about it. Analogous situations in other industries are also evident. Take mobile telecommunications firms for example. There is a continual battle for customer retention and to provide good customer service in a largely commoditized industry. Telecom companies want to be able to more responsively interact with their customers to, for example, be able to offer more personalized tariffs. They typically do analysis on how someone has used their phone retrospectively and send a letter with a suggestion, perhaps to change to a tariff more suitable for international calls. What these companies would like to do is to be more responsive. If a sequence of international calls is seen within a relatively short amount of time, then text the end-user offering them the upgrade. The user will be far more likely to take the offer up. REAL TIME IN REAL LIFE

THE ISSUE OF KEEPING UP

We are used to the kind of information visibility described above. It can therefore be surprising that so many businesses appear to be behind the adoption curve and have difficulty in obtaining the continuous business visibility they need. Progress Software commissioned some research by Vanson Bourne toward the end of 2009, asking 400 business and IT leaders in large US and European companies in many different sectors about their attitudes to a whole range of IT-related issues. The results on the topic of real-time information were particularly revealing. Ninety-four percent of respondents stated that access to real-time information was critical to their businesses. However, when asked whether they were currently able to access information in this way, only 8% said they could. This shows an enormous disparity between aspirations and reality. THE IMPORTANCE OF REAL-TIME INFORMATION

Nowhere is this disparity more obvious and more important than in financial services. Organizations, such as investment banks and hedge funds, have in fact embraced real-time technology. They are using complex event processing (CEP) to respond to events that are occurring in the

I recently spent a day at one of the top five European banks. On a daily basis, they are dealing with mortgage and loan applications through multiple channels—branches, the Internet, phone, etc.—and want to ensure that these are prioritized appropriately and also are processed in a timeframe that meets the expectation of the customer. This bank is currently going through deployment of real-time event processing technology to give them a continuous view of this process, so exceptions can be dealt with immediately and work prioritized. Remarkably, prior to this, management relied upon end-of-day faxes to keep them appraised—hardly effective when financial and quality objectives are set on a weekly basis. Having a “rear-view mirror” approach to information is becoming unacceptable. It means that customers are poorly interacted with and that faults in processes are not identified quickly, therefore leading to extra costs to fix them and in some cases failure of product competitiveness, as firms can’t respond adequately to what is happening around them. This seems to be recognized, at least in part, as illustrated by those 94% of survey respondents mentioned earlier. There’s lots of work to do to bridge that gap between the reality and the vision. RESOURCE BOX

Dr. Giles Nelson Deputy chief technology officer, Progress Software

As deputy chief technology officer, Dr. Giles Nelson is responsible for product and corporate development at Progress Software. This encompasses setting the vision for the product through organic growth and shaping the company’s acquisition strategy. A significant part of his role is evangelizing this activity to Progress customers, partners, and key industry watchers. He holds a PhD in computer science from the University of Cambridge.

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Anthony Wa An W tson is gl g ob bal a head of technolog gy opti timizaati t on and tran ansf sfor orma m tion and nd d is CI CIO fo for gllo ob bal a ope op eratiions ns aatt Barclayss, a ma m jorr gl glob oball financial service ce es provid der e engag ged d in banking and finan a cial maan nagem ment serv rvic ices es.

Joiining Genpac actt in n eaarlyy 2005, Sh han a tanu u Ghosh hass been insstru ume ental in building g its Finaanc nce e & Accco ountting Business for Glo loba b l Cu C stomerss outsside GE and makk ing in Ge enp n act an indusstr y leader in the F&A F& & spaace.

Matt Shocklee e iss the e pre eside dent and CEO O of Global Sou urcin ng Optim imizaation n Servvice es (GSOS), the glo obal ambasssado or forr th he IAOP, chairm IA rman man of the IAOP P Ou utssou urcin ng To ool o s and d Te Technolo ogy Innovvatio on Ch hap pter, and d is also co-c -ch hairman n off the IA AOP Midwest Chapte ter.

20

Today December 2010

The Rise of Tools and Te and the Fall of Labor Ar Roundtable of outsourcing experts debates the Matt Shocklee: Given the outsourcing industry is still rapidly growing, a basic question that a lot of organizations are going to have is this: why should we be focused on tools and technologies as we move ahead versus what outsourcing has really been known for—cost-reduction through things like labor arbitrage? Shantanu Ghosh: The use of advanced tools and technologies has really three different dimensions to it. The first is that more and more companies are outsourcing higher value added work, and as we go up the value chain, the ability for a provider to create value comes from both the knowledge of the process and the use of specialized tools. The second aspect of this is that more and more customers are taking outsourcing to a global scale. Now there are very few companies globally spread, which have end-to-end common systems, common infrastructure platforms, so many of them require tools and technologies that create some form of uniformity. That therefore becomes a driver for efficiency toward global standardization. The third aspect is the fact that expectation from service providers are changing and some are obviously initializing the whole concept that it’s not just about cost but value. Tools and technologies can be very productively used to drive advanced analytics, to drive changes in the process and strategies which then create different value.

Matt Shocklee: Let me move on to the customer in the audience here. Can you give us an example where you’ve been able to deploy advanced tools and technologies and what it’s meant as far as adding additional value to what you do in your business? Anthony Watson: I think there’s two parts to the question. The first thing is that most organizations are looking at how they look at their entire operational platform and how they move up the value chain. But, unfortunately, a lot of people are moving away from outsourcing because a lot of outsourcers don’t have the advanced analytics tool set. As a major corporation, a lot of data we have is not very robust in terms of understanding our technology platform. The end-to-end view is not there, so we’ve had to go out and build that with partners like Blazent to get an end-toend view of our IT infrastructure so we can make the strategic decisions around our virtualization and datacenter consolidation strategies, support platforms, etc. Matt Shocklee: Anthony, I think what you just told us is that if the service providers aren’t going to begin to use these advanced tools and technologies to create value, the customers are going to do it themselves, right?

ADVANCED TOOLS AND TECHNOLOGIES

echnologies rbitrage?

issue Anthony Watson: From a Barclays perspective, that’s what we’ve done. We have, in fact, consolidated because they couldn’t move as quickly as we need to move. It’s not simply about providing IT at a cheaper price point but also in a more intelligent approach. We’re finding that the outsourcers who service us don’t have an advanced strategy around the analytics and specifically around data, which is king for us. The outsourcers haven’t got that detailed view, so we decide to select them and move them out of our value chain inside and either deploy this ourselves or go to companies that can bring us up the value chain, which is an interesting dynamic. Mike Beals: The other aspect of this is tools and technologies for governing and environment. I think that’s one of the things that Anthony is highlighting, that clients no longer just want to have a service provider having tools. The client ultimately owns the data, and the client, in many cases these days, really wants to have direct access to that data rather than getting it from a service provider. Anthony Watson: I suspect a lot of companies outsource their mess for less. Over the last few years, major corporations, and Barclays in particular, have realized that that model probably isn’t the smartest moving forward anymore, especially with

the highly regulated environment we operate in. We needed to get real visibility into the processes, the data, and the tools that our service providers are using in our environment, where we probably never had that end-to-end view before. I think if we’re honest as an industry, we probably were lagging behind that. The one positive ICO of the recession—if you can call it that—is people have taken, and especially in Barclays, a long hard view of what we’re doing really well with our outsource partners, and also what we’re doing really badly, and how we bridge that gap. Dan Chow: It’s almost trite to say that all tools and technologies deployed need to provide very tangible business value to organizations. Otherwise, there’s no real reason to deploy them. Tangible to us is about bottom-line results, cost improvement, revenue enhancement that can be tied to better decisions through these analytics. At BeyondCore, we’ve done this a number of times in healthcare, in invoice processes where we can, in a matter of weeks, not only improve first-time quality but also dramatically decrease the cost of delivery to clients—millions of dollars in weeks. And I think that’s where the bar is— providing those tangible benefits. Matt Shocklee: At the end of the day, these things all cost money. Is the cloud a major change agent in our ability to be able to deliver these more affordably? Give me some sense to how we actually implement these solutions today. Gary Oliver: Our experience across the 70-plus engagements we’ve done with the service providers and customers plays to the point that we found, on average, and, again, this is in the infrastructure outsourcing space, 15 percent of the data within the environment is inaccurate. It’s not because the outsourcers aren’t trying to do a good job for their customers. It’s because there just haven’t been tools available to get a comprehensive view

across the entire infrastructure. In the past, you’d have to deploy software and additional agents or very heavy technology to help in this regard. But today, with the advent of the cloud, companies like Blazent and others are able to deliver this in a very straightforward, cost-effective way. What the customer or the service provider gives is simply a cut of the data from each of those various systems that exist, and all that can be processed and served back in a set of Webbased analytics. So I think that the bar for all the new tools providers in this space are: one, to realize that margins in outsourcing are very, very thin; and that even though you may have a very interesting tool set or capability, you’ve got to be able to deploy it in a very fast time to ROI, and in a way where you don’t require the customer to have to put up an entire team of folks to manage and run the project. Anthony Watson: For us, that was critical when we looked at a lot of providers. It’s one of the reasons why we pulled back from hundreds of million-dollar outsourcing agreements because the vendors couldn’t move at the speed we needed and we had to put an army of people up. If I looked at the five major deals we have terminated, we can do that work cheaper now with tools like Blazent because we have a full end-to-end view of our infrastructure. But, also, it gives us some big regulatory power. We can go to the regulators and say we understand our environment, the infrastructure end-to-end, the servers, where they’re located, what’s sitting on and running on those servers. If some of the major players were on this call, like IBM and HP, they would probably argue differently but, in my experience, they haven’t been able to bring that vision or value to the table. If a vendor can’t do that, we’ll just go off and build it ourselves. Shantanu Ghosh: The use, the application, and the need of what these tools can do— visibility, governance, process, efficiency,

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BPO: The Analytics Advantage By Mike Salvino and Barbara Duganier It was a textbook problem in the volatile world of retail. In the summer of 2009, a major US music distributor experienced a sudden spike in demand for the CDs of one of the artists in its back catalog. How could it ramp up production to meet immediate needs without creating excess inventory in the future? This company had an edge, however—a longstanding outsourcing arrangement in place that, over a period of several years, had turned its supply chain into a finely tuned, industrialized engine. Moreover, the engine came equipped with a predictive analytics capability that could do more than just tell the company that manufacturing could not meet supply. The analytics could also identify how to solve the problem, leveraging insights across multiple domains beyond the supply chain, including finance and CRM. In short order, the music distributor had pinpointed the source of greatest demand. The company was able to make informed and timely decisions vabout where to boost production and where the most costeffective and profitable locations were to locate inventory. Net result: Instead of the costly alternative of increasing production everywhere in the world—which would have resulted in excess inventory and expensive shipping to redistribute products later—the company had an accurate, just-in-time, precisely targeted delivery approach that met customers’ needs for a dramatically lower cost.

Sophisticated tools This is one of a growing list of examples where the intelligent use of analytics in business process outsourcing environments is making a significant impact. As with all applications of analytics, it leverages sophisticated tools and techniques for statistical surveying, root-cause analysis and optimization. Unlike many advanced analytics applications at some companies, however, BPO analytics begins on what is already a strong foundation of comprehensive data about a business process and how it’s performing. Where does such a foundation of highquality data come from? From outsourcing relationships in which providers are already highly motivated to produce timely data that helps them know, nearly in real time, how

efficiently a supply chain, a procurement function, a global finance organization or other business processes are performing.

Three ways analytics drives business advantage The analytics capabilities built on the existing foundation of data from a BPO relationship help companies realize significant benefits in at least three ways. 1. Improving the operational engine The first advantage in building an analytics capability on the back of a BPO relationship is that companies can go to a single source for high-quality data about the performance of a process or function—data that is measured and recorded consistently. An outsourcing provider that is helping to deliver essential business processes such as finance and HR is well placed to analyze the performance of a process end to end, across both client and provider, discovering where inefficiencies and risks exist, then working to drive time and waste out of the process and standardize wherever possible. 2. Discovering hidden insights A second critical area where analytics can deliver greater value as part of a business process outsourcing arrangement is in generating additional insights by tracking data across different parts of the organization. Such a capability can optimize results or help balance apparently competing or contradictory objectives. A common example is the balancing act companies face in reconciling the needs of the procurement and finance organizations. A procurement professional will want to push for early payments to get discounts from suppliers. But a finance professional will look instead to hang on to cash as long as possible. How can both sides of that equation win? The answer is that they cannot—not exactly. But with an analytics capability in place as part of an outsourcing arrangement that bundles procurement and finance, a company can be assured of finding the precise point at which the benefits on both sides of the equation are balanced, helping to generate as much business value as possible by improving cash management.

3. Innovations to drive revenue The third area where BPO analytics offers distinctive value is in helping companies manage data—from the front office, the back office or both—in such a way as to generate innovations or improve time to market to increase revenue. For example, one major company in the health and life sciences industry has established an outsourced center for the testing and assessment processes known as pharmacovigilance. This approach has helped the company to increase productivity by as much as 40 percent. The outsourced analytics capability has enabled the company to collect and analyze data faster, shaving significant time off the approval cycle, more readily identifying drugs with no marketplace potential and getting approved drugs to market faster.

Hard to duplicate Is an outsourcing arrangement the only way to make business process analytics effective? Certainly not. But the foundation of data and process industrialization upon which an outsourcing provider works, using highly sophisticated tools and talent, is hard to duplicate using internal resources alone. Companies that effectively use an outsourcing relationship to embed analytics into their business processes have an opportunity not only to reduce costs and improve process efficiency but also to generate the insights that can lead to market breakthroughs faster and with greater assurance. Outsourcing providers gain enormous insight into the way a client company works, at extremely detailed levels. It would be a missed opportunity if organizations failed to use those insights for competitive advantage. This article is based on ‘The analytics advantage,’ which originally appeared in the October, 2010 issue of Outlook, an Accenture publication. Used with permission.

You can read the full article at: accenture.com/analyticsadvantage

©2010 Accenture. All rights reserved.

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Mike Beals, viice e p preside dent for o soffttw war ae at Equ quaS aSiis, has asssis iste ted cl clie ientss in all fou ur stag st ages of the th he ou o tsourccin i g lilifecycl c e, with h primary emph hasses e on the th he Source ce and Manage stages. He e is i respo pons nsib ble for or the e over eral alll di d rection of Eq qu quaSiis En ntte erprise e.

Dan n Ch how iss a se eni n orr vice e pressid dentt att Beyon ndCore, a lead ding tecchno olog o y solu so l tionss provider in analyytic i s and cloud-comp puting in ndust s ries. He has 25 years of ex experrien nce in helpiing companies im mprovve th he perfo orman n ce of their innov ovvation n an nd ope eration nal processes acro osss vario ous u bussinessse s s.

CEO Gary Olive er brring gs an im mport rtan nt combination of man nage emen nt exxperie encce to Blazent bo oth h as a su uccesssfull so oftwaare e l ader and le d as a se eniior or-levvel ITT exxeccutiive by und derstandiing an nd de elivveriing soluti tions that meet the e ne eed ds of the industry.

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Today December 2010

control—is pretty obvious and I think there is convergence on that idea. I’d like to point out the conclusions drawn as to who can best deliver that. Obviously, different global corporations are reaching different conclusions, and each of them will have good reason to do that. So, Barclays has reached the conclusion that unless they do it themselves, they can’t get an end-to-end view. Equally global corporations have reached a very different conclusion where they use a suite of providers to do the same thing. If you really look at the IT outsourcing market post-recession, after a one-year dip, the major players in that market this year will go about 30, 35, 40 percent on the back of global corporation. So I think the moot point is that tools and technologies enable customers to get value—whether they do it themselves or they get other specialists do it—and that view is independent from the efficacy of the tools. Matt Shocklee: We’re moving from a purecost plate, and I’ve heard all of you talk about value, which is maybe a little bit more complex. And now, the driver is not labor but technology arbitrage. Whereas labor arbitrage really may have been more suitable for service providers alone to implement because of the sheer size and scale required, technology arbitrage maybe, with tools like the cloud, more implementable by all of the communities involved. Therefore, it may change some of the rules of the game. I think the customers and maybe the first generation of outsourcing viewed the responsibility of tools and technologies to be in the hands of the provider because it was really a cost play. Are we moving to more of a value play, where, if it’s not labor but technology arbitrage, it’s more of a collaborative process? Anthony Watson: I think it’s all those points. In our experience, most of the major outsource players we’ve partnered with in the past don’t have the advanced tool sets or know-how in the space. Again, it goes back to the wrong assumption that

there are many companies using the path where we just outsource our mess for less, and that’s not going to operate or work in the current climate. We have to remodel our approach. We’re selecting partners to help us do that. Certainly, if I had an end-to-end provider who had the analytics, the tool set that I needed to get an end-to-end view, that would be my first port of call because I’m sure I could do it cheaper. But because they don’t have the view that I need, I have to go out and build it. This is being driven by a need rather than simply the fact that it was a choice. Mike Beals: From an EquaTerra business perspective, I think a lot of our work was really driven several years back to be more transformational—how we reevaluate the way we do these services, how we deliver them, and how we reengineer or redo and potentially automate them. During the recession, things have gone more transactional, so everybody was a little more focused on the cost aspect rather than the value. I think we’re coming out of that. The other thing we should probably touch on that we haven’t hit very hard so far is the aspect of the reality that most major corporations are using multiple providers for the delivery of their services. It’s not just one big service provider giving all of the services for any of these back-office areas. We’re talking about two, three, four, half a dozen, maybe a dozen different service providers all working in this environment with the client to deliver these services. As a result, there’s a very different need for those end-to-end tools that Anthony was talking about. A single service provider in that environment could not provide your end-to-end view, and that’s why I think a lot of organizations are looking for the ability to do data aggregation, how we can house a lot of the key data elements for managing and governing this entire environment. Gary Oliver: I think that previously there was an expectation from the customer to the provider that they would bring in best practices and all the appropriate tools

ADVANCED TOOLS AND TECHNOLOGIES

and technologies. Certainly from our experience, what we’ve found is that the relationship starts out on a very positive footing, but as it moves forward, many of the service providers can’t provide that comprehensive single view. They can’t prove that they’re actually meeting the service levels that were set forth in the contract. They can’t rationalize, justify, validate the bill they’re providing to the customer. Therefore, the trust starts to break down. Mike, to your point, until recently there weren’t the kind of tools available to the end-customer in a cloud-based way where they could get a visibility not only to the performance of a single provider but also across multiple providers. That, I think, is a real game-changer. Matt, I think the pendulum seems to have sort of swung back to the middle where there’s now this sort of layer of truth and transparency between the customer and their providers, which now can be delivered in a very cost-effective, quick, time divisibility way. And the ROI case is usually staggering once you start to get into the data and look at that. It’s good for all parties because I’m sure service providers are frustrated when they go from strategic discussions with a customer to dispute resolution meetings. They’d rather focus on the positive. And I think that the earlier in the process this visibility can be engaged, the more the odds are that it’s going to be a positive outcome both for the service provider meeting the kind of margins they need to get and for the objectives that the customer sought out to get in the first place. Dan Chow: I agree totally with Gary’s point. The good news is that value and innovation can come from a variety of different places. I know that—from working with providers—their issue is around differentiation and strategy convergence, trying to break out of that and making sure that they’re differentiated from their competitors by providing those new innovations to their customers. Anthony Watson: I actually know Genpact from my legacy of working at Wachovia.

From a vendor perspective, what are you guys going through to bring the innovation to the table in terms of how you approach a customer? The other side is there’s a protectionist view—we can’t lose the contracts and accounts we have and keep a steady state. But the reality is, if you go down that road toward that approach, you’re going to lose the contract anyway. So I’m seeing a lot of those conversations on the table but it’d be good to get a view from vendors on how they’re approaching the innovation cycle. Shantanu Ghosh: I think one of the things which all of us have agreed on is that the expectation has gone to value beyond cost arbitrage. But let’s not make any mistake. The cost piece is a very important piece. I actually don’t think it’s a technology arbitrage. It’s like broadband and WiFi. Everyone has access to it, so it’s not a question whether a provider has better access to it versus a customer or vice versa. It’s a question of who uses it and who couples it with that particular process or value chain knowledge, and customers will be very, very good in their own process in some unique niche areas. Whereas providers depend on some processes—for example, accounts payable. If a provider does accounts payable for 200 companies and knows all the tools that can be used to drive effectiveness on that, it’s unlikely that any single customer doing accounts payable for just themselves should have a better view and should be able to leverage the tools better. So it’s a question of process insight driving the tool’s leverage. From a contracting perspective, Anthony, what you mentioned is extremely important, and that is what I think most providers have to differentiate themselves. Do I hold on to today’s revenue or do I really focus on growing with customers and delivering for customers, which allows me to grow? That really separates the global front-end providers from the people who are in the file of just making ends meet. Matt Shocklee: We see multi-sourcing as a major strategy in the industry. Is this going to drive a greater degree of

required collaboration and cooperation between service providers that we haven’t seen before? Is cooperation going to be required more and more for this to occur, given the need for managing these portfolios or relationships? Mike Beals: I think we really do. Now it’s more on how we manage a portfolio of outsourcing relationships—how we get not only a good relationship between us and supplier A, to make sure that suppliers B, C, and D also play nice with each other, and all are working toward the common good or the objectives that we define for a particular business process. So that’s a different mentality, level of governance capability, skill set, and a type of interaction that you’re going to have between your governance organization and multiple service providers. Shantanu Ghosh: Sometimes we don’t realize actually how prevalent this already is. It’s not rare that service providers work together, but I think the difference and success or failure happens to be how robust a governance mechanism is from the customer side. With more and more governance tools in visibility, that’s becoming better and provides more confidence to customers. Gary Oliver: What we’ve seen primarily has been where the customer has led that interaction between the various providers. One of our customers is a Fortune 20 company and the providers didn’t have a choice, the way they struck their contracts. In this case they would parse out pieces of the infrastructure to different providers and then they actually chose a separate provider to be the governance—the manager of managers, they called it. They actually brought us to the table with all the providers and said, you know, you will use Blazent as the centerpiece for visibility because we want to see how all of you are providing the service; we need that end-to-end view and it’s our way to be able to do that. And, by the way, this is an advantage for you to share information and optimize your processes and performance. It will be interesting to see over time

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w w w . I A O P. o r g

ADVANCED TOOLS AND TECHNOLOGIES

those providers that come to the table because the customer’s dragging them to the table versus those where they actually see optimization of things they do well and how they can couple that with other providers who happen to have a different focus but together, they can win more business and grow. Dan Chow: For BeyondCore, our experience is that about 60 percent of our customers are providers and they use our technology to help improve their first-time quality and the processes that they’re managing for their customers. But a good chunk, 40 percent, of our clients are customers of the providers looking to improve the end-to-end quality of that process, parts of which are outsourced. It sounds like we’re all in agreement that the black-box relationships that occur between customers and providers is over, that there is more and more visibility with tools and techniques between providers and customers among all the vendors to improve what, to me, is bottom-line value here, which is a total and end-to-end execution of that process. Ultimately, we all have to be working together to help improve the ultimate customer’s delivery of value to their customers. End-to-end execution is, I think, going to be, or if not already, the basis of competition. Matt Shocklee: As we look to the future of the use of advanced tools and technologies in our industry, how do all of us see this new marketplace for tools developing? If we look at other industries, there are very large corporations building these tools and technologies. Do we see the same things happening with outsourcing? Gary Oliver: One of the things that we’re interested to see is how fast the enterprise governance models and organizations start to come together to the point where there is a body within the enterprise that’s actually looking across all of these, if you will, back-office functions writing

governance models and, ultimately, tools and technologies that allow them to have a view to all of the services they’re procuring in a multi-source way. Mike Beals: I think the providers have taken notice that it’s about investing in tools and capabilities to automate and enable these business processes. More investment will continue to occur on the provider side. On the buyer side, our observation has been that the multi-sourcing environment has been very prevalent. However, managing a portfolio of service providers as part of your overall delivery capability, in a center of expertise type environment, has not been as prevalent. We have seen that our largest clients, the ones more mature and have gone to outsourcing a number of their back-office areas, are saying we have to develop this capability much more strongly than we’ve done in the past. We can’t look at this as a bunch of individual relationships and rely on the skills and capabilities of those individuals in different areas to give us our overall capability. We have to do this in a consistent and consolidated way to figure out what gets decentralized, stays decentralized, and what really needs to get centralized. That’s going to drive a significant amount of interest in tools and capabilities that help on the data-aggregation front and help the collaboration front between internal constituents, the governance team, external service providers, legal counsel, any number of different folks. So I definitely think it’s going to go that direction. Shantanu Ghosh: I think two things are really obvious. One is that for each type of requirement or functionality, both customers and providers are going to have more choices in terms of tools. Two is that the costs of application, implementation, execution are obviously going to keep coming down. From a corporation’s perspective, it is

not really about having the latest or the best tool, but fitting that tool into your process and using it to drive value, which is where process, insight, and knowledge of leveraging those tools come in. Cost and deployment effort keeps them coming down and choices increase. It depends on who has the best insight to optimize on those tools—from a tool provider, service provider, or the customer. Anthony Watson: I’ve noticed in my experience that a number of banks are very reluctant to change their processes to suit an outsource vendor. That’s why I actually disagree with the comment in terms of the tools driving companies like Barclays to go to vendors to get the ability to have the end-to-end insight in analytics that traditional outsourcers haven’t to this point provided. I think the banking industry is going through a radical change. Companies who have outsourced for a number of years are getting more educated and skilled in the areas of their organization. My personal observation is that the outsourcing industry is struggling at how to adapt to that model. It will be interesting to see how the industry adapts to this because I think it’s much broader than the process. It’s about being innovative with your customers, looking at what tool sets change the game. Matt Shocklee: Thank you all for your insights. We’ve heard a lot today about value improvement and differentiation, not just cost reduction. Through the use of tools and technologies, the more competitive you’ll be as a customer and the more successful you’ll be as a service provider in meeting your client’s needs. Also, it appears that as multi-sourcing continues to grow, collaboration and cooperation between service providers is going to need to increase as customers begin to take the reigns a little bit more in implementing these tools and technologies or at least the standards by which the data will be shared.

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VALUE HEALTH CHECK

CHECK POINT By Joseph Bubman and Sara Enlow

Spotting and diagnosing issues in outsourcing relationships You can’t fix a problem in your outsourcing engagement before you know a problem exists. Missed milestones, a red dashboard, and significant turnover might be good indicators that something is wrong, but must you endure those costly consequences of underperformance? Not if you’re able to proactively determine early on whether there are areas of dissatisfaction that need to be addressed. Effective remediation, therefore, requires the ability to spot potential problems on the horizon. Assessing the health of your relationship helps you do just that. A MECHANISM FOR SPOTTING ISSUES

Make a systematic effort to assess the health of your engagement regularly. In addition to looking at price for services (as in a traditional benchmark) and delivery to contract terms, consider undertaking a “health check� approach to evaluate the performance, direction, and overall effectiveness of the engagement in areas such as communication, decision-making, metrics, and stakeholder alignment. Taking a broad view will help you get a sense of the extent to which the engagement is on track and meeting the expectations of both parties. The decision to assess the engagement should not, in itself, be an indication of underperformance. In fact, your healthiest outsourcing relationship can benefit from regularly occurring health checks in which your organization and your partner evaluate the arrangement and make appropriate adjustments based on the results. Recurring assessments enable you and your partner to conduct trend analyses and determine how the parties are doing over time in ensuring key success factors are in place—before something is obviously wrong. Consider making health-check data accessible to stakeholders through executive dashboards, from which users can view the relationship status.

Reviewing data on your outsourcing relationship avoids a can of worms

THE EARLIER, THE BETTER

If you’re about to launch a new engagement, consider putting in place a process at the outset that will enable you to spot issues quickly. At the outset of any new deal, be sure to: t Discuss what a healthy relationship would look like—what are the behaviors you would need to see to believe both parties are doing what is needed to make the relationship a success? t Develop a list of factors that are critical for the success of the engagement, such as things like managing scope effectively, making joint decisions efficiently, measuring what matters to the two organizations given their business objectives t Decide when and how to assess the extent to which these success factors are in place, such as how you will go about conducting your health checks) t Agree on a structure for discussing findings and deciding what changes to make as a result

GATHER DATA TO SPOT PROBLEMS

Whatever you call the process you undertake—relationship audit, health check, engagement assessment—dig for data that will help you spot potential problems and then diagnose what’s happening. A health check doesn’t have to be a lengthy, expensive endeavor—there are many ways to collect data on the relationship: interviews, survey, joint working sessions, and review of contracts, performance reports, and governance data. The intensity of the data-collection process should take into account the scope and complexity of the engagement (see the following table).

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Even when adopting a “light touch� approach, be sure to 1) collect input from stakeholders involved in different aspects of the arrangement, and 2) move beyond individuals’ perspectives by reviewing contracts, performance reports, and governance data to better understand service delivery objectives and execution. As part of the data collection and analysis effort, it may be useful to enlist the help of an independent party to avoid the appearance that one party is collecting data that supports only its view.

VALUE HEALTH CHECK

Medium Strength

Heavy Duty

(most appropriate for relationships of little complexity and/or small annual contract value)

(most appropriate for relationships of moderate complexity with medium-sized annual contract value)

(most appropriate for highly complex relationships with contract value)

Survey: to validate interview findings or independently assess what is working well and what needs improvement

+

+

+

Review of contracts, performance reports, and governance data: to understand objectives, expectations, and perceived commitments around service delivery

+

+

+

+

+

Health Checks Can be Conducted More or Less Intensely, with Implications for How the Data is Collected

Light Touch

Interviews: to assess strengths and weaknesses and help diagnose key challenges Joint working session: to diagnose key challenges

+

DIAGNOSE: DIG UNDERNEATH SYMPTOMS TO FIND CAUSES

Whatever you call the process you undertake—relationship audit, health check, engagement assessment—dig for data that will help you spot potential problems and then diagnose

Buyer Perspective

what’s happening. A health check doesn’t have to be a lengthy, expensive endeavor—there are many ways to collect data on the relationship: interviews, survey, joint working sessions, and

The Facts

Provider Perspective

“The provider’s delivery team denies Despite a lengthy selection process, contracting “The buyer did not provide accurate baselines knowledge of commitments made by the was hurried and then a new set of players or clear requirements.” negotiation team.” rushed in. “They are nickel and diming us on everything In the first three months of the deal, the buyer is “The buyer’s PMO team is inexperienced, and and our savings are evaporating.” paying additional charges it did not anticipate. they do not know how to properly interpret the contract.” “The contract is too long and confusing—it is There is disagreement between buyer and “Transition is being delayed because the difficult to tell what is actually in scope.” provider over interpretation of contract terms. buyer wants to reopen the smallest details of the contract that were already agreed on in negotiations.”

review of contracts, performance reports, and governance data. The intensity of the data-collection process should take into account the scope and complexity of the engagement (see the table on rigth). Rather than arguing about these conclusions, share your reasoning path by explaining the data you see and how you interpret it to reach your conclusions. Inquire into their reasoning path by asking what data they see and how they interpret it to reach their conclusions. It is likely that, somewhere along the way, you and your partner can begin to build a shared picture of what is happening. Getting to the bottom of these challenges requires a focus on joint contribution—setting aside who is to blame and focusing on building an understanding of how each side has contributed. That’s not to say that the question of who is at fault should never be addressed. Although both parties may have contributed to a problem, it may be that only one party has legal responsibility or contractual accountability for it. But those are separate questions from “How do we fix it?” and “How do we avoid repeating it?”

RESOURCE BOX

Joseph Bubman, a senior consultant at Vantage Partners, LLC and a member of the firm’s Outsourcing practice, has helped leading companies across a range of industries to negotiate and manage their strategic relationships more effectively. Contact him thru jbubman@vantagepartners.com. Sara Enlow is a principal with Vantage Partners and co-lead of the firm’s Outsourcing practice. She works with buyers and providers across a range of industries to help them get greater value from their relationships. She can be reached at senlow@vantagepartners.com.

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ONE SOURCE FOR ALL OF YOUR POSSIBILITIES CONSIDER THE POSSIBILITIES THAT CAN BE ACHIEVED WITH A WORLD-CLASS OUTSOURCING PARTNER Improve efficiencies by reducing capital costs associated with daily operations Achieve growth by deploying advanced technology and services to enhance the customer experience and strengthen overall brand image Implement latest technology and monitoring capabilities to mitigate security risks and meet compliance regulations

Turn to Diebold as a single point of contact for technology upgrades, risk mitigation, regulatory compliance and more to help streamline processes, improve efficiencies and strengthen your bottom line. For more information, including a new white paper that addresses the operational efficiencies that can be achieved by outsourcing, visit: www.diebold.com/outsourcingefficiency

SELF-SERVICE DELIVERY

Optimizing HR Delivery Channels The trends in the adoption of self-service, its emerging channels, and how employers can drive a successful strategy toward effectivity By Debora Card Especially in today’s economic climate, every HR executive faces the competing challenges of delivering better service to employees while reducing costs. One path frequently taken to achieve these rival goals is the use of self-service delivery. Self-service offers increased access (24/7) to employees and managers and has the potential to reduce costs and increase accuracy. However, some early adopters of self-service technology struggled to build adoption and realize the promised quality improvements and savings. As with many technologies, functionality and ease of use have improved with each successive version, and many HR and benefits outsourcing providers have invested significant amounts in improving the experience with this important “face to the employee.� Today, self-service is a primary delivery channel for many HR and benefits services. WEB SELF-SERVICE ADOPTION TRENDS

The introduction of self-service Web channels for conducting HR and benefits inquiries and transactions is one of the greatest contributors to cost reduction and quality improvement in these services over the past 10 years. Adoption of self-service has steadily increased, year over year, and is beginning to plateau for some of the more mature benefits areas. Web access has become the preferred delivery channel and has nearly replaced IVR for all but call routing. Overall, nearly 90 percent of HR, payroll, and benefits transactions are conducted via self-service on the Web. AGE HAS SIGNIFICANT IMPACT ON ADOPTION, BUT ISN’T THE ONLY FACTOR

Various factors can impact the likelihood of self-service adoption. Among the factors tracked by Aon Hewitt, age has the largest impact. Web usage for HR/benefits transactions is highest among those under 40 years of age and decreases as age increases, although at different rates by type of service. Employees under 40 years of age are highly and equally likely to use the Web for HW and DC needs. However, in older cohorts, Web usage for HW declines far more steeply than for DC. For employees aged 60 to 69, 87% continue to

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use the Web for DC, but only 33% for HW. This difference may relate to the nature of the transactions in DC being less complex than HW. As discussed below, for more complex transactions, participants are more likely to want to talk with someone before executing the decision. In addition to age, the industry in which an employee works also has an influence on whether transactions are performed through the Web. There is a 12% point difference in adoption rates between the top five industries (averaging 94%) and the bottom five industries (averaging 82%). Access to computers at work and the education level of the workforce are key contributors to higher adoption. Finally, the nature of the transaction has a significant impact on self-service adoption. Transactions that are repeated regularly (such as new hire requisitions, annual enrollments, personal information updates, or investment changes) or that are

informational (such as pension estimates or viewing online pay slips) are more likely to be completed solely through self-service than those that involve critical, one-time decisions [such as retirement initiation, 401(k) withdrawals or terminations]. For example, in 2009, 97 percent of pension estimates were performed online, 70 percent of recently surveyed participants indicated that they felt comfortable with the idea of accessing their retirement kit information from the Web, and 58 percent stated they would prefer to print their confirmation forms and authorization statements online. However, a much lower percent (21 percent) initiated their retirement through self-service. While those considering retirement may have done much of their decision-planning online, many still want the ability to talk with someone before “pulling the trigger� on this critical decision. SELF-SERVICE FULLY EMBRACED FOR TALENT MANAGEMENT

One area where nearly all companies can take advantage of self-service channels is talent management. The talent areas have demonstrated a clear trend toward high self-service usage regardless of client industry or culture. For recruiting

SELF-SERVICE DELIVERY

administration, we see nearly 100% manager and employee/candidate selfservice for their scope of responsibilities within the delivery model. Specifically, managers create requisitions and approve requisitions and offers, while candidates apply for openings and employees submit referrals, all through self-service. It has become standard procedure for managers, employees, and candidates to perform these functions using a self-service channel supported by a Service Center to answer questions related to the technology and process. Similarly, performance management and succession planning activities are conducted almost entirely through self-service. These activities include employees and their managers creating performance plans and goals and reviewing actual performance against those plans. IF SELF-SERVICE IS INCREASING, WHY HAVEN’T MY CALL VOLUMES DECREASED?

Providing alternative access channels to employees has been shown to increase overall satisfaction, and Web-based channels are also lower cost; however, one puzzling statistic clouds this otherwise bright picture. Although on average, Web self-service adoption has increased several percentage points over the past five years, the number of calls per employee or participant has not dropped noticeably.

One reason may be that there is still some discomfort on the part of employees and participants in conducting pay-related and/ or benefits-related transactions without verification that they “did it right.” Employers and providers are reacting by increasing “how-to” information on the site and delivering confirmation messages to assure employees that their transactions were successful. Hopefully, over time these actions will result in reduced call volumes. Over this

period, the type of contact has shifted away from supporting transaction processing and toward more complex problem resolution and education of how to access self-service. Another more positive reason is that the increased reliance on self-service for routine transactions has enabled some employers to invest more heavily in advocacy and advice solutions, increasing the overall level of service. Additionally, conducting HR and benefits transactions through self-service generally reduces administrative processing time and increases accuracy since data validation and approval paths are built into each transaction. Moreover, reflective of the changes in call type, there has been an overall decrease in call length. Over the past six years, the average length of a benefits call has decreased 12.5 percent. In HRO, call length has decreased 21.8 percent during the same period. So, the evidence does point to selfservice contributing to an overall reduction in call minutes per employee or participant, after all. EMERGING DELIVERY CHANNELS: THERE’S AN APP FOR THAT

Chat and mobile devices are two variations of self-service that are gaining momentum in the marketplace. These alternatives are particularly aimed at today’s tech-savvy employees, providing a user experience more aligned to what they experience from

Amazon.com or Google. Many providers have introduced online chat as a delivery option. Chat enables a real-time “dialog” via instant messaging. Experience, to date, has shown that chat actually takes much longer than a typical phone call as the CSR often needs to probe to fully understand the context of the employee question before responding; however, a CSR can handle multiple chat sessions at once and chat can often be provided offshore, reducing costs through labor arbitrage. Further, by making some or all HR/benefits Web functions available through mobile devices, service providers and employers hope to increase access, engagement, and adoption even further, particularly for those populations that do not have computer access at work. Whether the value and cost-savings of these solutions will prove to offset the cost of providing them, is yet to be determined for these emerging channels. WHAT EMPLOYERS CAN DO TO INCREASE SELF-SERVICE UTILIZATION

Employers can significantly influence selfservice adoption by their employees through proactive change management strategies. Both carrots and sticks can be effective to encourage self-service adoption. Some of the tactics used include: Carrots t Proactively collecting e mail addresses to “push” information out to participants via electronic channels t Ensuring that all employee communications prominently display the website address and de-emphasize the service center phone number t Instructing participants how to use the website to perform their transactions or answer their questions next time instead of calling t Providing and promoting self-service tool guides that promote online features, tools, and calculators t Promoting the website address in giveaways such as mouse pads, magnets, mugs, calendars, etc.

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SELF-SERVICE DELIVERY

SUCCESS STORIES THROUGH UNDERSTANDING PREFERENCES

EMPLOYEE

One HRO early adopter has actively encouraged its associates to utilize self-service for years and currently has utilization above 90 percent. This company has taken proactive steps to optimize HR delivery channels, including provision of onestop shopping through a single Web portal and toll-free number for all HR/benefits interactions, such as global talent management, the introduction of chat as a new delivery channel, and a proactive change management strategy that includes surveying user preferences and directed communications. In preparation for implementing a new delivery model, the company surveyed 500 USbased associates and 100 international associates to determine their channel preferences and predicted behaviors. The survey pool included both exempt and non-exempt associates, including those in HR. The initial survey results confirmed the company’s HR strategy of delivering a “one-stop shopping� experience for their employees. Eighty-nine percent of employees had a preference for a single portal and 76% indicated a preference for having a single phone number to call for all of their needs. The survey also revealed a surprising interest in using chat, particularly for questions not related to pay or benefits. More than 50% of respondents indicated that they would be most likely to use chat or e-mail versus phone for these types of questions, whereas less than 25% would use these channels for pay or benefit questions. Finally, 81% indicated they would likely use chat to supplement call center service during off hours or busy periods. THROUGH INCENTIVES

A large retailer had 67 percent Web usage for Annual Enrollment for the fall of 2007. In fall 2008, this retailer initiated a campaign to encourage employees to use the Web for enrollment. The campaign included a drawing for a free year of benefits; all employees who enrolled on the Web were entered. For fall of 2008, Web usage increased to 85 percent and, upon repeating the campaign in fall 2009, the retailer achieved an 88 percent Web enrollment rate.

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Sticks t Eliminating paper annual enrollment kits in favor of sending postcards with information on how to access the website to enroll t Eliminating paper paychecks and requiring direct deposit, so that employees are driven to self-service channels to view their online pay slips t Increasing the standard average wait time at the Service Center to discourage employees from calling t Charging participants more for certain transactions when not conducted via self-service (e.g., new loans, QDROs, stock transfers) ENSURING THE EXPERIENCE

OPTIMAL

USER

When designing a service delivery channel strategy, you must balance user experience and cost of delivery. Fortunately, with some of the latest delivery enhancements, both sides can benefit. Chat may be a lower cost delivery channel and can extend access beyond call center hours. For many people who are comfortable with the Internet, seeing things on the Web is preferable to hearing them over the phone. Ensuring optimal experience requires a combination of enabling different channels to suit differing preferences and making sure that each channel is designed to be: 1) easy to use, 2) timely, 3) accurate, and 4) cost-efficient. While some differences exist between what makes a good website and what makes a good call-center experience, these four items are universally important. SIX STEPS TO DESIGNING A SELFSERVICE ADOPTION STRATEGY

Employers and providers who report successful initiatives in driving self-service adoption have followed a process similar to the steps below: 1. Consider surveying a representative sample of employees regarding their delivery channel preferences and analyzing the responses to understand any differences by segmentation (age, hourly/salary, type of transaction, etc.). 2. Determine what your objectives are for self-service adoption and evaluate the potential business value of the change

(how will you measure success?). 3. Evaluate what carrots and/or sticks you will deploy to drive usage to the desired channels. 4. Establish a communications strategy to support your program changes and incentives. 5. Measure and evaluate results against your goals. 6. Reset your goals and strategies to reinforce successful behavior change. Over the past five or so years, the HR and benefits delivery market has seen increased adoption of self-service, particularly through Web channels. This has been driven by improved functionality and easeof-use of these applications, intentional change strategies deployed by employers, and certainly the overall increases in Web utilization across society. While self-service has relieved HR delivery personnel from low-value data entry and routine queries, it has also afforded employees greater access to information, as well as new modeling and decision-support functionality that improve the employee experience with HR delivery. RESOURCE BOX

Debora Card draws upon extensive outsourcing and HR management experience to help clients clearly define appropriate outsourcing service delivery strategy, implement their outsourcing decisions, and develop effective relationships with their service providers. Her expertise ranges from strategic assessments, service provider selection, to contract negotiations, benchmarking, and renegotiations. Card holds a Bachelor in Business Administration in Marketing and an MBA in Human Resource Management and Corporate Strategy, both from the University of Michigan.

PUBLISHING OUTSOURCING

Turning a New Page Publishing is making a mark in the world of outsourcing. Here’s an overview of the issues, challenges, and trends that surface with it By James S. Hill and Namami Ghosh With written content being created in a global landscape more than ever, the world of publishing has been turned flat. Like software development and other industries, it is now a highly outsourced industry that has rapidly developed a strong offshore component. At present, publishing outsourcing is more than a $1 billion industry primarily in India, the Philippines, and other Asian countries since its onset in the mid-1970s.

LOOKING BACK

Traditional “paperbound� publishing has always been a relatively low-margin industry historically slow to adopt technical innovations until very recently. As labor costs rose in the United States and Europe in the 1990s, publishers sought lower-cost alternatives offshore, particularly in India, where many of the standardized, repetitive tasks of typesetting and illustration can be processed quite easily. Content turned dramatically digital

in recent years, and as more technical publishing skills are needed, especially with Extensible Markup Language (XML) and e-book conversions, skills were often found much less expensive offshore. Much of the content development process in publishing is simply a business process not unlike accounting, software development, or other IT functions that are very standardized and easily automated at lower costs.

MARKET SIZE, GROWTH, GEOGRAPHY

Of the $1 billion and more in annual sales, the vast majority of the market is concentrated in India at approximately $650 million. Historically, India has always had a very strong affinity for publishing skills and was well positioned to take advantage of outsourcing especially from the United States and Western Europe. Another 10 to 15 percent of the market is in the Philippines, the second largest revenue share next to India, while a much smaller, but rapidly growing percentage is divided among China, Vietnam, Malaysia, Sri Lanka, and other destinations in Asia. The Philippines has remarkably become a legitimate alternative outside of India

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in the last five years due to its highly westernized culture, unusually strong command of written and spoken English, and an outstanding propensity for creative content development suitable for advertising, graphic arts, and illustration,

particularly in its two major metropolitan areas—Manila and Cebu. A comparison with the outsourced call-center industry, an also English language-centric one, strikingly shows that the Philippines just recently surpassed India in callcenter growth. Annual market growth of publishing outsourcing has been about 15 percent per year for the last five years and is projected to be around $1.2 billion by 2012. China, because of its sheer size and educational system, has seen a significant amount of growth in this outsourcing field as well. However, customers face issues concerning English-language proficiency, while challenges about quality also arise.

PUBLISHING OUTSOURCING

OFFSHORE PUBLISHING VERTICALS

The major publishing services outsourced usually include content generation services such as copyediting; design and illustration; technology services; and a mix of other programming services, including XML or HTML. Content services is the largest category, comprising about 70 percent of the total revenue, followed by design services, which amounts to around 12 percent. Many often refer to these as pre-media services—what content undergoes through before it becomes ready for distribution in a format such as print, electronic, or Web. The 60 percent lion’s share of the market is STM (scientific, technical, and medical) publishing, which includes scientific, engineering, and medical books, journals, and other printed material. Most STM content is not dependent on the design or layout to convey the message, unlike consumer fashion magazines such as Vogue and Gentleman’s Quarterly that bear nonstandardized designs, discounting the need for work to be outsourced. STM content is therefore often highly standardized, easily automated, and offshored, not to mention with very costeffective results. The second largest segment is educational-textbook publishing, composed of K-12 (primary education) to higher education (college) content. Despite being not as mature as the STM market, this segment has been experiencing strong growth as well. However, many textbook publishers are still under increasing pricing and cost pressure especially in the United States. Students and parents are buckling for obvious reasons, paying $150 for a general-chemistry textbook. While public education and books are provided to students for free in the United States, these publishers find cost reduction a challenge due to a dramatic decline in state property taxes—the primary source of funding for public education. The newest segment to tentatively embrace offshore outsourcing is the

magazine market at about 9 percent of the total revenue. This is increasingly faced with cost and pricing difficulties, as more magazine publishers are competing with websites for similar content, as well as declining print advertising revenues. Unlike technical publishing, however, magazines are generally illustrationdriven to support their branding. Most magazine publishers are reticent to offshore the design work since the service is so integral to how their content is branded for their target audience. Newspaper outsourcing is also about the same size as magazines, which faces even more pressure with content relevance and dramatic declines in advertising revenues. A daunting challenge with newspaper outsourcing is the daily turn-around times. Meanwhile, legal outsourcing comprises about 6 percent of the total revenue—a rapidly growing segment highly standardized and easily automated, bearing no design issues whatsoever.

THE NEW STANDARD

An equally important technical development during the late 1990s and throughout this decade is the use of Extensible Markup Language (XML)— an innovative way to capitalize on the advantages of single-source publishing for outputs other than print. Single-source publishing is the powerful catalyst for using XML, where a publisher can create content once and use that same content for other non-print channels. XML is very “agnostic” in that it is design- and format-independent. Clearly, non-print channels have grown leaps and bounds over the last five years. E-books are now the fastest-growing publishing market. In the last decade, XML became a ubiquitous publishing standard, and more and more publishers are realizing the efficiency of a true XML-first workflow to improve the publishing process, even without considering the final format. Regardless of the location, XML is now a core service for many offshore vendors.

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PUBLISHING OUTSOURCING

THE OUTSOURCED SERVICE MATRIX

Currently, there are hundreds of publishing outsourcing vendors in both India and the Philippines, with the largest concentration in major Indian cities such as New Delhi, Chennai, Mumbai, and Bangalore. The core components of the service include copyediting; technical editing; composition in QuarkXPress, Framemaker, Adobe InDesign, and Advanced Arbortext (3B2); TeX, and LaTeX (open-source composition tools closely associated with the academic and STM publishing market); indexing; abstracting; and XML coding. Outsourcing these premedia functions offshore usually reduces a publisher’s overhead costs by as much as 40 percent depending on the content. Again, these cost savings are rarely achieved in the first year of outsourcing, since many kinks and knots need to be massaged out in the process workflow between the publisher and the vendor. ISSUES: PART OF THE OUTSOURCING PACKAGE

Although publishing outsourcing has experienced an explosive growth, there are challenges with the service, as ValueNotes indicates. The leading research, outsourcing, and consulting group in Pune, India recently highlighted in a 2009-2010 report that while many multinational publishers are now outsourcing much of their pre-media work to reduce costs and remain competitive in a global market, 60% have found the experience difficult and frustrating because of poor output quality and communication problems. A thorny issue related to quality is high employee-turnover rate. As the market rapidly grew offshore over the last 10 years, exceptional employees would very often receive substantially better offers from competing companies, particularly in India. This high turnover rate is a potential cause of schedule disruptions and quality issues with offshore vendors, and is an ongoing challenge that requires special attention. As with most offshore services, the primary motivation is cost reduction, resulting in another critical issue in publishing outsourcing—the immediacy of expected cost advantages. While pricing with all services can often be in the 40 percent range, cost advantages are not realized during the first year—a reality many publishers tend to overlook, thus leading to exaggerated expectations often encouraged by the offshore vendor. Clearly and carefully defining cost expectations at the start is therefore a critical publisher-vendor relationship concern. Cost is also a key issue in STM content where technical subjectmatter experts (SMEs) perform the editing. SMEs often command high salaries onshore in the United States, particularly on the East and West Coasts where most multinational publishers are located. Replacing technical editors onshore in the United States making at least $75,000 annually with those in Chennai, India holding a PhD in biochemistry from Texas A.M. making $10,000 a year has proven to be a wiser move for publishers. Another critical variable of offshoring, with both negative and positive implications, is the time difference with the United States. Twenty-four-hour service is often provided by a lot of offshore companies. Many provide three shifts of work, and only a few publishers in the United States and abroad have 24/7 operations,

although this is more common with newspaper publishers. This system can have a dramatic impact on expedited turn-around times, which is a significant advantage with offshore publishing work. Consequently, in theory, offshoring publishing work can potentially provide a three-fold increase in productivity over onshoring. However, the customer interface and quality-control process needs to be well-defined as with any offshore initiative. Copyediting is another issue that needs to be dealt with in publishing outsourcing. It is a difficult skill to acquire and develop, as it requires considerable time, know-how, and practice, especially offshore where English is usually a distant second language. The true challenge with outsourcing copyediting is that only so much of the service can be automated or standardized, a large part of it being manual and expensive. Good writing and editing are often considered rare, lost arts, even in the United States, as they require practice over an extended period of time. Editing is as much of an art as a technical skill. Much of the editing issues are cultural and depends on how the English language is spoken and written in a certain location or group. Carefully defining the copyediting process, such as rules on grammar and usage, is especially important for both outsourcing vendors and publishers. As some of its segments mature and consolidate, outsourcing pre-media services in publishing is a rapidly growing industry projected to develop at a double-digit growth rate per year, with India likely to maintain its lead as the market destination. Other countries, such as the Philippines, however, are likely to add their own value to the service mix particularly with more creative services and, potentially, with editing. As more communication processes are elevated to a global scale, publishing will become an increasingly smaller and flatter world.

RESOURCE BOX

James S. Hill has a long-established career in traditional publishing as a publisher in the trade book market, a vice president in custom magazine publishing, and a sales and marketing director for a number of offshore and onshore pre-media vendors. He is currently an independent consultant working with publishers in the United States and abroad. Contact him thru talljim0155@yahoo.com. Namami Ghosh is an India-based editorial freelancer with more than 10 years of experience in the publishing industry. She has handled both STM and non-STM work for major international publishers, earning rave reviews. Some of the prestigious accounts she has won include Elsevier, Springer, Taylor and Francis-Informa, IB Tauris, GmB Publishing, and Intellect Journals. E-mail her at ghoshnamami@gmail.com.

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WHAT’S HAPPENING AT THE IAOP WELCOME NEW IAOP MEMBERS The IAOP is pleased to welcome new and renewing Corporate and Professional Members from the following organizations: Accenture; Bancolombia; BBEST; Blue Cross/Blue Shield of Florida; Cassidy Turley; CB Richard Ellis; Cienet International, LLC; Colliers Turley Martin Tucker; Compassion International; Conseco; Duke University; Entergy Services, Inc; Fiserv; Genmab; Grundfos Management A/S; hiSoft Technology International Limited; IBM Corporation; Intel; KPMG; Lindenwood University; Mayer Brown LLP; NCS Pte Ltd; Oce Business Services; Orange Business Services; Practical Logic Pty Ltd; PwC; Procter & Gamble; ResourcePro; Salmat; SAP AG; Service Corporation International; smc hartmann; UnitedLex; and Wipro Technologies. For information on IAOP membership, e-mail sales@iaop.org.

A QUEST FOR PROGRESS The IAOP encourages career development # > ; x ; and a newly launched chapter

RECENT ANNOUNCEMENTS OUTSOURCING CERTIFICATIONS NOW AVAILABLE FOR HUMAN RESOURCES AND FINANCE AND ACCOUNTING PROFESSIONALS

Professionals working in outsourcing positions in human resources and finance and accounting can now demonstrate their proficiency through two new certifications offered by the International Association of Outsourcing Professionals (IAOP). The new designations that professionals can earn to demonstrate their entry-level proficiency at outsourcing tasks in these fields are the IAOP Certified Outsourcing Specialist in Human Resources (COS-HR) and Certified Outsourcing Specialist in Finance & Accounting (COS-F&A). Developed by the IAOP as the certifying body and with BeyondCore and Global Talent Track (GTT) delivering key training

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WHAT’S HAPPENING AT THE IAOP

MEMBERSHIP Membership in the IAOP provides access to an extensive array of services, and just as importantly distinguishes organizations and professionals as leaders in the field of outsourcing. IAOP membership demonstrates a commitment to innovative thinking, continuous performance improvement, and to the sustaining development of outsourcing as both an industry and as a profession. CUSTOMER CORPORATE MEMBERSHIP Organizations that are currently outsourcing or are considering one or more outsourcing initiatives should become Customer Corporate Members of the 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 the IAOP as Provider/Advisor Corporate Members. This membership provides the same organization-wide access to the IAOP’s research, training, certification, and networking programs as Customer Corporate membership, but also includes member-only sponsorship opportunities 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 membership 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. For information on IAOP membership, e-mail sales@iaop.org. and testing components, the goal of the certification programs is to create a standardized candidate evaluation procedure for the outsourcing industry. To gain the certifications, candidates must successfully pass a validated standardized online exam that tests their aptitude and knowledge under an approved set of standards. The IAOP COSHR test covers such areas as payroll processing, compensation and benefits, and office administration. It is validated through an exam that tests candidates on accounting concepts and conventions, bookkeeping and reconciliation, ledger accounting, rectification of errors, inventory accounting, financial-statements preparation and analysis, introduction to capital market and derivatives, and use of IT in financial accounting. The newest certifications join the IAOP COS-TP (Transaction Processing) designation launched this summer that evaluates the data-entry speed and skill of back-office workers. CERTIFICATIONS BENEFIT COMPANIES HIRING AND JOB SEEKERS

The IAOP’s COS family of certifications enable individuals, the companies they work for, and the customers they serve to consistently validate an employee’s specific knowledge, skills, and expertise in the delivery of outsourcing services. “For companies interested in hiring outsourcing workers, the IAOP COS family of certifications helps them lower their costs

MEMBER SERVICES

IAOP membership offers a wide range of services designed to help you and your organization improve outsourcing outcomes. Many of these services are included as part of the IAOP’s Professional or Corporate membership, with discounts available for use beyond the level provided. Some services are also available individually at non-member rates. t (MPCBMJ[BUJPO 5PEBZ. The official publication of the IAOP creates the largest and best informational publication on outsourcing by uniting and tapping the collective intellect of individuals from around the world. IAOP members receive a free subscription plus the opportunity to get published, promote products/services, and advertise. t Value Health Check Survey. This Web-based diagnostic tool provides outsourcing customers and service providers with rapid insights to realizing outsourcing value. t BestOutsourcingJobs.com. Companies seeking the best talent for outsourcing jobs as well as professionals looking for employment opportunities can benefit from this IAOP member-service provided through BestOutsourcingJobs.com. t Firmbuilder.com. The IAOP’s knowledge center is an online repository that houses more than 600 articles, including chapter-meeting presentations, conference proceedings, industry whitepapers, research articles, and more. t 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. t Certified Outsourcing Specialist Family of Certifications. Receive 50 complimentary COS Family of Certification test each year. For more detailed information, visit www.iaop.org/MemberServices. IAOP CHAPTER MEETINGS

IAOP chapters provide a forum for members to collectively focus on professional development, networking, and the advancement of outsourcing within specific areas of common interest. Each chapter is led by chairs and co-chairs with deep knowledge in the area covered. Since IAOP members are members of the association and not of a specific chapter, they are encouraged to participate in as many chapters and meetings as they wish. Non-members are welcome to attend any chapter meeting as the IAOP’s guest to learn more about the association and its work. Find out how to implement an outsourcing initiative, streamline operations, improve bottom line through outsourcing, and find the perfect provider partner or introduce your services to potential clients. Chapter meetings are announced daily. To join and view a full listing of our current chapters, go to www.iaop.org/Chapters.

by eliminating testing expenses and time-consuming recruitment searches,” said IAOP Chairman Michael Corbett. The certifications address the huge demand for skilled professionals expected with the projected growth of the global outsourcing markets from $500 billion today to as much as $1.6 trillion in 2020, according to Dr. Uma Ganesh of Global Talent Track, an initiative aimed at employability by bridging the skill gap between academia and the industry. “The COS program addresses the rising global talent shortage in the industry by creating specialist skills for different verticals, helping young people build successful career paths,” Ganesh said. The tests are based on advanced outsourcing methodologies and Fortune 500 companies, along with student research from the Harvard Business School, Stanford University, and the National University of Singapore. “The IAOP COS standardized tests will help candidates demonstrate their talents and enable prospective employers to

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Call-to-Action Outsourcing Insights by WNS

End-to-end consolidation of for a global air delivery and

Our client is a global logistics conglomerate headquartered in the U.S., with a broad portfolio of transportation, e-commerce and business services. It has been consistently ranked among the world's most admired and trusted companies. The company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected parent brand. The client's express transportation unit delivers millions of packages daily to more than 200 countries and territories.

The Client’s Challenge The client recognized the need to standardize its Finance and Accounting (F&A) processes specifically falling under 'Ship-to-Collect' across its EMEA (Europe, Middle East and Africa) region. Most countries in the region followed a different process for the same function leading to inefficiencies. The client recognized that if it wished to retain its leadership position in a competitive environment, process standardization was an imperative. The ship-to-collect process begins with the manifesting of airway bills. Business growth prompted the need for scale to manage the increased volume of airway bills. The client had established outsourced manifesting centers in Mexico and China in addition to their own shared services centers in the U.S. It needed a geographically diverse center from a risk point of view, and more importantly a partner that could deliver this critical, high-volume activity at exceptional quality levels.

The WNS Solution The EMEA F&A processes were first transitioned in 2002 followed by the airway bill manifesting process in 2005. WNS leveraged its proprietary transition methodology — EnABLE, to successfully transition to two centers in India. Each transition was staged differently. F&A processes were transferred by a phased country-by-country and process-by-process consolidation exercise to WNS' center in Mumbai, India, whereas the manifesting process scaled up rapidly to full volumes within a 90-day period at WNS' Nashik center. Within 90 to 120 days of the commencement of each program, WNS staff were meeting the productivity and quality levels set by the client and handling the entire volume with minimal support from the client's onshore locations.

The processes being delivered by WNS include n

Airway bill manifesting – Manifesting of airway bills, indexing and classification of supporting documents

n

Billing – Manual rectification of errors and release of airway bills to generate freight, duties and taxes for invoices that fail the auto-billing process

n

Invoice adjustment – Handling and resolving billing disputes and making necessary adjustment entries

n

Cash application – Applying payments received to open invoices and researching unapplied cash

n

Accounts payable – Scrutinizing and processing of invoices for payment

To deliver the airway bill manifesting process, the client required a partner with the credentials to manage a huge volume of transactions and meet extremely stringent quality and turnaround time standards. Given the security environment post 9/11, and the nature of international shipments, the cut-off standards for transmitting manifest information to customs are stringent. Typically all airway bills must be manifested between one to three hours prior to flight departure time. Given the fact that airway bills arrive continuously up to the last minute before flight takeoff, the WNS team has to operate under a tight window ranging from a maximum of six hours to as less as 30 minutes to load the manifest information into the system. Missing cut-offs implies customs fines at the destination, delays to cargo clearance and a negative impact to the client's credibility. From the inception of the engagement, WNS worked very closely with the client to virtually eliminate missed cut-offs. This was accomplished through accurate volume forecasting and the implementation of a well-oiled recruitment process. To achieve an accuracy standard of 99.7 percent, WNS deployed multiple strategies, including Six Sigma, increased focus on staff training and alignment of their incentives with successfully meeting the client's quality standards. In delivering F&A processes, WNS manages bill exceptions. For example, an average of 250,000 bills that fail the auto-invoicing process must be investigated each month. In order to resolve, the WNS team must perform a root cause analysis, collecting necessary data by referring to supporting documents and other information; developing a logical relationship between the available data; and then releasing the airway bills after updating the correct information to generate correct freight, duties and taxes invoices. Since this process has a direct impact on collections and Days Sales Outstanding (DSO), turnaround time is critical. WNS has been able to reduce the average billing cycle from over 96 to 48 hours with its stringent processes. Managing customer disputes on billing requires language capabilities in German, French and English. WNS' staff handle customer disputes and complaints, re-investigate billing and take appropriate actions including correcting the invoice, if necessary, to ensure that the customer's complaints are addressed and the payments are received on time. WNS can also create customer accounts, make necessary changes in the customer database and forward the required supporting documents related to any shipment, based on a customer's request. For cash applications, WNS researches payments received and applies the cash while posting remaining payments to the unapplied GL code. To help the client reduce its unapplied cash, which was approximately 8 percent prior to transition, WNS bridged knowledge gaps by re-working unapplied cases, having regular conference calls with the onshore team to quickly resolve open items and creating tracking tools for better control. As a result, WNS has consistently maintained unapplied cash under 2 percent ensuring faster collections and a direct bottom-line impact to the client.

f the order-to-cash cycle freight services provider The accounts payable process involves scrutinizing and processing payable requests. This involves validating data, closing out denial or approval decisions, closing the invoice post follow-up and issuing credit notes if needed. Post the verification process and correct booking, the pay cycle is run. WNS added value to this operation by implementing Six Sigma and other quality methodologies early in the client engagement. Some examples are: n

By applying the Kaizen principle, the billing and cash application process were made paperless. Total Hard QNS generated was USD 27,674.00 per annum

n

Also through Kaizen, the cash application productivity increased from 60-62 invoices per hour to 68-72 invoices per hour

n

A green belt project in the airway bill manifesting process resulted in productivity increase from 18-22 airway bills per hour to an average of 33-35 airway bills per hour (up to 45 airway bills per hour for many countries)

Benefits delivered to the client by WNS WNS has extended the client's enterprise by consolidating the ship-to-collect cycle for the client. Specific benefits delivered include: n

Standardizing a geographically spread operation for F&A processes by process consolidation and sharing uniform best practices with all locations for simplification of work

n

Managing a huge volume of over 11 million airway bills per annum, or approximately 50,000 transactions per day with an accuracy of over 99.7 percent

n

Improving the turnaround time for billing of consignments from 96 hours to 48 hours

n

Reducing unapplied cash from over 8 percent to consistently lower than 2 percent

n

Reducing cost of operations by 60 percent as compared to the client's onshore costs

n

Improving the metrics around bills 'skipped' by WNS from 25 percent to under 10 percent for freight duties and taxes. This results in the need for the client to review or process fewer volume of exceptions

n

Productivity improvement in U.K. BACS process of cash applications and billing overall

About WNS WNS is a leading global business process outsourcing (BPO) company. Deep industry and business process knowledge, a partnership approach, comprehensive service offering and a proven track record enables WNS to deliver business value to the world’s leading companies. WNS is passionate about building a market leading company valued by our clients, employees, business partners, investors and communities.

For more insights on outsourcing or to know more about our service offerings, visit wns.com. Alternatively, you can write to us at info@wns.com.

Need to improve operational performance? Talk to a business process outsourcing service provider with a strong track record for delivery.

With over 21,000 employees located in 21 delivery centers around the world, WNS extends the enterprise of over 200 organizations by improving their business performance. To learn how we can help extend your enterprise, visit wns.com.

WHAT’S HAPPENING AT THE IAOP

hire the best, leading to a far more efficient hiring process,� said Arijit Sengupta, CEO of BeyondCore. The COS family of certifications is the newest in a group of expanded certification programs launched by the IAOP under its Outsourcing Professional Certification Framework (OPCF), with a full range of certifications for individuals from entry-level to C-suite positions. Many of the COS tests are available at www. iaop-cos.com. OUTSOURCING DATA SECURITY CONFERENCE SLATED FOR 2011

Risk Management and Data Security in the Outsourced World will be explored at the first Security and Outsourcing Conference produced by the IAOP in conjunction with the Information Systems Audit and Control Association’s (ISACA) Denver chapter. The one-day educational event will be held on January 11, 2011, at the Colorado Convention Center in Denver, from 7:00 a.m. to 5:30 p.m. It will feature four cutting-edge tracks on Auditing and Governance of Outsourcing Service Providers, Managing the Risks of Legal & Regulatory Issues in an Outsourcing Environment, Managed Security Service Providers, and Cloud Computing Service Providers. “Outsourcing is certainly one of the most important topics of our times,� said IAOP Chairman Michael Corbett. “Security professionals need to be fully briefed on the myriad of security considerations implicit in every outsourcing engagement. They also need to understand how the range of outsourcing solutions available today can actually help them do their jobs better.� Competition is pushing organizations to explore more outsourcing opportunities for every area of the business, including security outsourcing. This conference and exhibition will help you to: t Make informed decisions about security, compliance strategy, and governance with outsourcing t Understand the security and compliance of leading outsourcing service providers t Learn about the legal requirements and best practices for managing outsourcing organizations and service providers t Determine which new alternative security delivery models best meet your requirements The conference will include discussions with industry-leading IT, telecom, and network service providers, cloud-computing service providers, managed security service providers, and local information-security, audit, compliance, and IT professionals. Speakers have already been confirmed from companies like Microsoft, Accenture, Stream Global Services, PwC, Coalfire, Network Box USA, Foley & Lardner, Oracle, Agilent, and many more. It will provide the opportunity for IT practitioners, managers,

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and other executives to learn about the latest security and compliance trends in outsourcing, interact with industry thought leaders and leading security and auditing professionals from leading outsourcing organizations, and network with peers to share project successes and war stories. Visit www.iaop.org/ISACA for further information and earlyregistration specials. For sponsorship information or to exhibit, please contact Renee Preston at renee.preston@iaop.org. OUTSOURCING PROFESSIONALS IN CHINA JOIN WITH THE IAOP TO CAPTURE SERVICE GROWTH

With outsourcing services rapidly growing in China, professionals working in the industry have joined with the lAOP to launch a new chapter in Qingdao. The newest chapter in the region chaired by ResourcePro held its inaugural meeting last month at the Shangri-La Hotel in Qingdao to discuss the “Rise of Service Outsourcing in China.� “China is one of the fastest growing providers and users of outsourcing services,� said IAOP Chairman Michael Corbett. “This new chapter will support the development of outsourcing in China and Qingdao by bringing together IAOP global members and thought leaders, local outsourcing companies, and local government and university departments to share knowledge, best practices, and standards.� Corbett spoke about global vision and trends in outsourcing at the event. Other featured speakers included: t Meng Jian Xin, vice director general of Shandong Commerce Department, on the investment environment of the Shandong province and government support policies for the outsourcing industry t Egidio Zarrella, KPMG partner, advisory services, on the outsourcing environment, opportunities, and challenges in Asia t Sun Heng Qin, director general of Qingdao Commerce Department, on the investment environment of Qingdao City and government support policies for the outsourcing industry t Grace Gu, vice president of Insigma Technology, led a panel discussion of the newly formed IAOP China regional advisory board on “2010 China Outsourcing Challenges� and the role the IAOP can play to help Chinese companies become more competitive in the global landscape. The IAOP recently formed regional advisory boards around the world to promote outsourcing in regional markets and develop customized programs and services for professionals in those key regions. In China, the association also has active chapters in Beijing, Hong Kong, and Shanghai. For information on becoming involved, visit the Qingdao chapter and the China regional advisory board at www.iaop.org.

WHAT’S HAPPENING AT THE IAOP Michael F. Corbett, IAOP chairman, addresses the main session audience during his keynote at the 2010 Outsourcing World Summit

CONFERENCES & EVENTS

EMBRACING CHANGE: HOW OUTSOURCING PROFESSIONALS LEAD THEIR COMPANIES TO SUCCESS IN THIS NEW OUTSOURCING LANDSCAPE

The IAOP presents the 14th edition of its world-renowned conference—The Outsourcing World Summit—on February 21-23, 2011, at the Renaissance Esmeralda, Indian Wells, California. For more than 13 years, it has been recognized as the premier gathering for outsourcing customers, providers, and advisors from around the world. Highlights of the summit include the following speakers and their keynotes: t Laura Unger, former acting chairman of the Securities and Exchange Commission (SEC) and commentator for PBS’s Nightly Business Report, will deliver a keynote address on “The Global Financial System” t Sandy Ogg, chief HR officer, Unilever, on the “Role of Outsourcing in Business Transformation” t Michael F. Corbett, IAOP chairman, with the results of “the IAOP’s Annual Member Survey” More than 50 industry leaders and visionaries will delve into topics critical to your success, including globalization, rural sourcing, corporate social responsibility, cloud computing, multi-vendor provider environment, knowledge process outsourcing, today’s tools and how tos, vendor management, outsourcing as a procurement discipline, transition and governance, exploring new geographies, and transboundary and government outsourcing. The summit will also be attended by professionals from organizations such as Accenture, Allstate Financial, AstraZeneca, Bank of America, Booz & Company, Cassidy Turley, CB Richard Ellis, Citi, Coca-Cola, Colliers International, Eastman Kodak Company, Duke University Fuqua School of Business, IBM, Johnson & Johnson, Kellogg, Kirkland & Ellis LLP, Kraft, Liberty Mutual Insurance, Mayer Brown, Microsoft, Morrison & Foerster LLP, Nokia, Orange Business Services, PepsiCo, PETCO, PricewaterhouseCoopers, Procter & Gamble, Quint Wellington Redwood, Rural Sourcing, SAP AG, Zensar Technologies, and more.

NEW! OUTSOURCING GOVERNANCE WORKSHOP DEBUTS ONLINE The following workshops are taking place at the 2011 Outsourcing World Summit in support of the corporate and professionaldevelopment program: t OPCF/Certified Outsourcing Professional Prep Class. An introduction to the IAOP’s certification programs. t eSCM Organization Best Practices: Improving and Assessing Sourcing Capabilities. An overview of two eSourcing Capability Models and the associated appraisal methods. t Governments & ICT Sector Development. This workshop tackles the issues for both emerging global destinations and the new rural sourcing landscape. Additional fees apply. To learn more about the workshops, visit www.iaop.org/Summit/Workshops. ONLY A LIMITED NUMBER OF SPONSORSHIP OPPORTUNITIES ARE LEFT FOR THE 2011 OUTSOURCING WORLD SUMMIT!

By sponsoring a Summit, service providers and advisors gain a proven, unparalleled opportunity for brand awareness and influence on the thinking and decision-making of client executives worldwide. Support of the IAOP Outsourcing World Summit directly demonstrates the commitment your firm has made to leadership and excellence in outsourcing. If your company is interested, please hurry! Many slots have already been filled. Download the Sponsorship Prospectus at www.iaop.org/Summit or contact Renee Preston at renee.preston@iaop.org to learn how your firm can play a role in this exciting event.

WELCOME ABOARD NEW SPONSORS!

Diebold Mphasis ResourcePro/Qingdao Chapter

To register and learn more, visit www.iaop.org/Summit.

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WHAT’S HAPPENING AT THE IAOP

CERTIFICATION & PROFESSIONAL DEVELOPMENT COP MASTER CLASS SCHEDULE

The Certified Outsourcing Professional (COP) Master Class is a great option for reaching up to half (75 points) of the Knowledge and Training points needed for certification, or for COPs to earn 20 recertification CEHs, or to fully complete the required training for the aCOP designation. The IAOP is actively registering now for the following classes: t DECEMBER 13-16: KUALA LUMPUR, MALAYSIA CLASS. CONTACT BOBBY

DOL CAREERONESTOP APPROVES IAOP CERTIFICATIONS AND ONLINE TRAININGS

The IAOP is now a recognized and approved provider of certifications qualifying in the CareerOneStop program sponsored by the Department of Labor, Employment, and Training administration. All certifications and trainings offered by the IAOP in the Outsourcing Professional Certification Framework (OPCF) are eligible for funding under the Workforce Investment Act (WIA) to qualified applicants who apply at their local CareerOneStop locations. The current certifications and trainings offered by the IAOP and covered under the program are:

VARANASI AT BOBBY@MATRYZEL.COM TO REGISTER. t JANUARY 19-21: HONG KONG, CHINA. CONTACT WINNIE CHOW AT WINNIECHOW@HBC.HK TO REGISTER. t MARCH 7-10, 2011: PAUL J. RIZZO CONFERENCE CENTER, CHAPEL HILL, NORTH CAROLINA t JUNE 27-30, 2011: KINGBRIDGE CONFERENCE CENTRE, TORONTO, CANADA

Visit www.iaop.org/training_calendar for a full list of classes and current discounts and specials. CORPORATE PROGRAMS

The IAOP’s Private Master Class calendar is filling up with Corporate Companies taking advantage of educating their employees in-house. With the dramatic cost savings, there is no better time than now to use up your training budget. Host an in-house class for 10 to 25 employees, partners, and customers and save on time and travel. Classroom training will be delivered by an IAOP-authorized trainer at your facility, with each student who successfully completes the COP Master Class provided with a Certificate of Completion noting that they have earned 75 points toward the COP designation and fulfilled the aCOP training requirement. Executives interested in bringing the COP program division- or company-wide are invited to contact their account executive or e-mail sales@iaop.org.

NEW! OUTSOURCING GOVERNANCE WORKSHOP DEBUTS ONLINE

Don’t have time to attend our onsite Governance Workshop, but don’t want to miss out on gaining the cutting-edge knowledge it entails? No worries; this highly sought-after one-day intensive is now available online! The Online Governance Workshop is for those who want to lead their firms in navigating the seas of high risk and increasing global government regulations. Whether your goal is to earn 15 points toward the COP designation, six points toward recertification, or simply learn all aspects of creating and sustaining successful relationships with your outsourcing partners, this workshop is for you. Register now at www.iaop-cop.com.

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t Certified Outsourcing Professional (COP) t Associate Certified Outsourcing Professional (aCOP) t Certified Outsourcing Specialist-Transaction Processing (COSTP) t Certified Outsourcing Specialist-Human Resources (COS-HR) t Certified Outsourcing Specialist-F&A (COS-F&A) t Online COP Master Class t Online COP Governance Workshop CareerOneStop was developed in response to the US WorkForce Investment Act to assist professionals by providing funding for certifications that would forward their careers or gain employment. The national program uses a Certification Finder, an online directory, to search the database of accepted certification providers and thirdparty organizations that provide verification of skill or knowledge attainment through professional certification using generally accepted occupational standards. For more information, visit www.iaop.org or www.careeronestop. org. THE IAOP EXPANDS CERTIFIED OUTSOURCING SPECIALIST (COS) CERTIFICATIONS

The new designations that professionals can earn to demonstrate their entry-level proficiency at outsourcing tasks in these fields are Certified Outsourcing Specialist in Human Resources (COS-HR) and Certified Outsourcing Specialist in Finance & Accounting (COSF&A). Developed by the IAOP Outsourcing Standards Board as the certifying body and with BeyondCore and Global Talent Track (GTT), the goal of the certification programs is to create a standardized candidate-evaluation procedure for the outsourcing industry. To gain the certifications, candidates must successfully pass a validated standardized online exam that tests their aptitude and knowledge under an approved set of standards. The COS-HR test covers such areas as payroll processing, compensation and benefits, and office administration. The COS family of certifications is the newest in a group of expanded certification programs launched under the IAOP Outsourcing Professional Certification Framework (OPCF), with a full range of certifications for individuals from entry-level to C-suite positions. The COS tests are available at www.iaop-cos.com.

E E

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SCRAPBOOK

Welcome to the IAOP Global Community Students take a break during

the COP Master Class in La

Jolla.

sionals (IAOP), At the International Association of Outsourcing Profes es is to outcom rcing we believe that the best way to improve outsou —the ioners practit its of ts insigh and edge tap the collective knowl er they’re in global community of outsourcing practitioners. Wheth professionals customer, provider, or advisory organizations, these es. outcom ss busine great e achiev to desire on comm a share ers and memb 0 110,00 than more of With a global community is the IAOP the ies, countr 50 over enting repres ide worldw affiliates uals individ and s zation organi leading professional association for rcing, outsou h throug ss busine of world the rming involved in transfo offshoring, and shared services. al advisory Through chapter meetings, webinars, trainings, region is bringing IAOP the , board meetings, conferences, and other events ched unmat for er togeth world the around m fro fr rtts from pert eexxpe ng expert outsourcing r rking. o w wo t e et netwo n h ch t tch otch ot n -n p o opop t top-no d nd a and g learnin

trainer for the COP, authorized Rick Ostrander, participants cts tru ins s, ter Clas rnia. IAOP’s COP Mas lifo Ca , lla 2010, in La Jo on November 3, d Brian l Services, TPI an advisor, Financia lead a I, TP r, cto re Ed Walsh, senior di and managing er rtn pa , ith D. Sm ter meeting. e Chicago chap discussion at th Attendees networking at the Chicago chapter meeting on October 21, 2010

The IAOP Nordic Chapter, chaired by ISS, Norde a, Copenhagen Business School, Accenture, Apple, Trellis , and Gorrissen Federspiel, met on November 3, 2010 in Copen hagen, Denmark.

Yuen, COP, CEO, HBC; managing director, IAOP; Sidney Left to right: Debi Hamill, senior Pte Ltd; and Arthur ices Serv IT S Charles Fan, CEO, OPU Grace Gu, vice president, Insigma; first face-to-face the for nology International Ltd. meet Yao, vice president, hiSoft Tech 2010. 3, er emb Nov on dao sory board in Qing meeting of the IAOP’s China advi

ipal Katie Gove, princ llis consultant, Tre e th of air -ch co and ks Nordic Chapter kic g in off the meetin . en ag Copenh

Outsourcing Professional Certification FrameworkTM (OPCF) The OPCF is designed to address the needs of individuals who work across the global outsourcing industry from entry level positions focused on the delivery of outsourced services through to senior executives leading global outsourcing programs at customer, provider, and advisor organizations. At each stage in an individual’s career there is an opportunity for both professional development and professional recognition. The OPCF is made up of three families of certifications:

Certified Outsourcing ExecutiveTM (COE) Certified Outsourcing Professional (COP) Certified Outsourcing SpecialistTM (COS)

BENEFITS OF CERTIFICATION Certification establishes a level of professional recognition essential in a field as complex and risk-based as outsourcing. When working together across the customer-provider relationship, certification brings a common framework for success that benefits both organizations involved. Certified individuals command greater respect within the industry and their companies, higher compensation levels, and expanded and enhanced career opportunities.

*

I’M A COP

*Expect better, more consistent results with me.

Training programs are available at the individual and corporate level. For more information, visit

www.IAOP.org/OPCF.

ADVERTISER INDEX PAGE #

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22, 23 16 18 30, 31 0, 2, 26, 49

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6, 19 38 34 10, 11 46 4 42, 43

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