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The Official Magazine of the International Association of Outsourcing Professionals
GlobalizationToday January 2011
THE ROAD FROM HERE Need a map for 2011? Our experts pinpoint the biggest trends in outsourcing for the year ahead (page 20)
Also in this issue: Sourcing Relationship Management Globalization in Aerospace Fresh Perspectives on IT Outsourcing
Need the right people to put the right pieces in the right place? For 20 years, DATAMARK has been helping Fortune 100 companies transition to a business process outsourcing model that improves back ! " on-site, on-shore, near-shore and far-shore processing facilities #
Banking & Financial Services Freight & Transportation Government Health Care Insurance Manufacturing
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INSIDE January 2011
7 PUBLISHER’S NOTE 8 NEWS FEED What’s new and noteworthy in global commerce.
10 OBTAINING GREATER BUSINESS AGILITY The latest on the cloud model of computing, as it relates to outsourcing.
15 BLOG BEAT News and commentary from bloggers around the world.
17 MEETING THE VIRTUAL CHALLENGE Here’s why virtualization continues to gain ground as a way to expedite efficient outsourcing.
20 THE TOP
10 TRENDS OF 2011 We asked our in-house experts to provide interpretive analysis as to the trends they anticipate in outsourcing in the coming months.
26 CALL-TO-ACTION Professional insight to support the business development of law firms.
32 SOURCING RELATIONSHIP MANAGEMENT (SRM): A MAJOR TOOL IN YOUR ARSENAL Here are proven methods for enhancing your outsourcing relationships, to maximize their business value.
35 CLOUD AND VISIBILITY: A CLEAR VIEW
36
An expert in the field pinpoints the major Information Technology (IT) outsourcing trends of 2011.
CONSOLIDATION TAKES FLIGHT
40 WHEN FUND MANAGEMENT
Our magazine’s gazine’s Editorial Director Directo or examines the accelerating accelerat pace of consolidation in the aerospace sector.
42 A
ANALYSTS REACH FOR HELP The case for outsourcing secondary research. QUEST FOR PROGRESS The many ways in which IAOP encourages career development through workshops, certifications, and a newly launched chapter.
44 THE 2011 OUTSOURCING WORLD SUMMIT Here’s a program guide to this important event.
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The 2011 Latin American Outsourcing Summit
LEARN HOW TO BEST LEVERAGE LATIN AMERICA’S OUTSOURCING EXPLOSION. The 2011 IAOP Latin American Outsourcing Summit, taking place May 26-27, 2011 in Cartagena, Colombia, is a first-ofits-kind global event bringing the thought leadership and global network of the International Association of Outsourcing Professionals® (IAOP®) together with leaders from across the Latin American business community. The result is an exceptional opportunity for individuals and organizations involved in outsourcing as customers, providers and advisors to both understand and leverage the explosion of outsourcing taking place across the region. Organizations such as Accenture; Avianca; Bancolombia; Booz & Company; CB Richard Ellis; Colliers International; Colombia’s Ministry of Commerce, Industry and Tourism; Duke University; Johnson & Johnson; Kirkland & Ellis; PwC and many others are already slated to participate. The newly elected president of Colombia, Juan Manuel Santos, has committed the support of his office and, schedule permitting, expects to personally participate and address delegates. Whether you think of Latin America as an outsourcing destination, as a market for your company’s services, or as the region you call home, this is a not to be missed global business gathering. For information on attending, speaking or sponsoring, please visit www.IAOP.org/LATAM.
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FOUNDER & PUBLISHER Ali Comelek ali.comelek@globalizationtoday.com CO-FOUNDER Larry Genkin lgenkin777@gmail.com
EDITORIAL and PRODUCTION EDITORIAL DIRECTOR John Persinos john.persinos@globalizationtoday.com AD PRODUCTION MANAGER Donna Eastman donna.eastman@globalizationtoday.com GRAPHIC DESIGN AND PRODUCTION Webstaze Design Studio www.webstaze.com
EDITORIAL ADVISORY BOARD Dr. Bruce Greenwald Prof. Asset Management and Finance Columbia Business School Dr. Matt Waller Prof. Marketing and Logistics University of Arkansas Dr. John Hindle Sr. Manager - Accenture, Adjunct Prof Vanderbilt University Mike Corbett Chairman - International Association of Outsourcing Professionals Matt Shocklee CEO & President - Global Sourcing Optimization Services Arijit Sengupta CEO of BeyondCore, Inc Chair of the Cloud Computing Chapter of IAOP
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PROGRESSING BEYOND. GLOBAL. HOLISTIC. PROVEN. KellyOCG is leading the way for comprehensive Services Supply Chain spend visibility and management. Our holistic approach leverages MSP beyond traditional contingent labor to deliver greater value to your bottom line. Our comprehensive solutions address: UÊ Contingent Workforce Outsourcing UÊ -iÀÛ ViÃÊ*À VÕÀi i ÌÊqÊ V Õ` }] qÊ Independent Contractors qÊ Statement of Work scopes/projects qÊ "ÕÌÃ `iÊÃiÀÛ ViÊÛi ` ÀÃ UÊ *À viÃÃ > Ê*>ÞÀ Ê- ÕÌ Ã We partner with you to optimize your investment and mitigate risk for all variable labor and services spend categories to ensure: UÊ - ÕÀV }ÊiÝVi i Vi UÊ « > Vi UÊ *iÀv À > ViÊ > >}i i Ì UÊ -Õ«« iÀÊ`iÛi « i Ì UÊ *À }À> Ê>` «Ì Ê UÊ viVÞV iÊ > >}i i Ì Choose KellyOCG to move your business ahead > `Ê >Ý âiÊÃ >Ài `iÀÊÛ> ÕiÊ>VÀ ÃÃÊÌ iÊL >À`°
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PUBLISHER’S NOTE
Looking Ahead
Ali Comelek CEO and Publisher
The global economy is in the throes of transition. Witness accelerated consolidation and outsourcing, in almost every conceivable industry sector. At Globalization Today, we don’t just cover these and other important trends — we try to anticipate and decipher them. This is not to say that we’re soothsayers. Whether it’s the stock market, the broader economy or technological breakthroughs, no one can precisely predict the future — if someone says they can, hold on to your wallet. In the words of the great Yogi Berra: “Forecasting is difficult, especially about the future.” Whenever I watch the 1968 movie, “2001: A Space Odyssey”, I can’t help but chuckle at Stanley Kubrick’s futuristic vision of interstellar Pan Am terminals. The blue Pan Am logo is ubiquitous in the film. As it turned out, the storied airline filed for bankruptcy in 1991, well before the new millennium. The future tends to surprise us and undermine our most cherished assumptions. That said, it’s still possible to make informed guesses with reasonable accuracy. Hence our cover story, in which top experts make predictions for 2011 (see page 20). Their insights will help you figure out your destination in the coming year. Speaking of looking ahead, mark your calendar for the 2011 Outsourcing World Summit, scheduled for February 21-23, at the Renaissance Esmeralda, in Indian Wells, California. For details, turn to page 44. One thing already is clear: Outsourcing is expected to accelerate its already rapid pace. That’s especially true in the aerospace sector, as John Persinos makes clear on page 36. I’d like to welcome John to our magazine; this issue marks his inauguration as our new Editorial Director. John has served in publishing and media for more than 30 years, with considerable experience in magazines. I’m confident that he will ensure consistently high journalistic quality in these pages. And finally, I urge all of our readers to contribute articles and feedback. This magazine is an effective way for you to be heard and to educate your colleagues. Call or email me at: 1-602-4924194 or ali.comelek@globalizationtoday.com. As I state above, no one can precisely predict the future. But remember an old adage: chance favors the prepared mind. By reading our magazine, you’ll become better prepared to handle whatever unfolds in 2011 and beyond.
CEO and Publisher Globalization Today Magazine “Official Publication of IAOP” www.GlobalizationToday.com 1-602-492-4194
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NEWS FEED
NEWS Feed WHAT YOU NEED TO KNOW IN THE WORLD OF OUTSOURCING
NEW INTERNET PROTOCOL LAWS IN INDIA LEAD TO DATA PRIVACY CONCERNS FOR COMPANIES www.sourcingfocus.com
The Indian government wants to snoop on every Indian citizen who uses the Internet, even if he or she has never been even a suspect in any illegal activity — and that includes you. Internet service providers have been asked to put in place solutions to track any specific Internet Protocol (IP) address and identify it as soon as any user logs on to the Internet, according to Rajesh Chharia, president of the Internet Service Providers’ Association of India (ISPAI). Everyone is at risk. The Department of Telecom (DoT) has conveyed this mandate to the ISPAI, at the behest of the Union Home Ministry and the Intelligence Bureau (IB), according to other knowledgeable sources. The IB has also asked the telecom and IT departments to work with mobile phone companies and the National Informatics Centre (NIC) to put in place a system that can uniquely identify any person using the Internet across the country. The idea is to develop a technology platform where users will have to compulsorily submit some form of an online identification
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Today January 2011
or password to access the Internet every time they go online, irrespective of the service provider. “They want us to track voice over Internet protocol (VoIP) calls, all e-commerce transactions like bank transactions as well as air and railway ticket sales,� said Chharia. If implemented, this would mean that citizens’ personal data would be in the hands of private and commercial bodies like Internet Service Providers. Legally, this would be very tricky, because private companies could misuse such data for commercial gain, sources said. “If they want to keep tabs on everybody, then it should also become a very transparent and accessible process. But I certainly don’t want the government to play some sort of Big Brother,� said Supreme Court Advocate Prashant Bhushan. However, sources have hinted that the government’s latest move may be in violation of Article 19 (1A) of the Constitution of India, which gives the freedom of speech and expression as Article 21 — the right to life, which also protects privacy, as well as Section
69 of the Information Technology Act. “Once this is monitored, it is like saying that every bedroom of your house must have a CCTV attached, which they can see. It is grossly unconstitutional, and perverse,� said Vivek Sood, advocate, Supreme Court of India and author on several books on cyber law. “The government does not have powers to do any blanket interception and monitor the entire population. Any interception of electronic communication in India, if done outside the parameters of Section 69 of IT Act, will infringe upon the fundamental right of privacy, part of Fundamental Right of Life under Article 21 of the Constitution of India. But under Section 79 2C, all intermediaries (which includes Internet Service Providers) in India are mandated to comply with such directions as may be issued by the government from time to time. It is this power that the government appears to be using to issue directions to ISPs,� New Delhi-based cyber law expert Pawan Duggal told Sunday MiD DAY.
NEWS FEED
AIRTEL TO ENHANCE AFRICA’S CUSTOMER EXPERIENCE www.outsourcing-center.com
Sunil Bharti Mittal, MD of Bharti Airtel
Bharti Airtel has its sight set on improving African telecom infrastructure this year. Manoj Kohli, CEO (International) and Joint Managing Director, Bharti Airtel, said in a statement: “We remain committed to offering affordable services, deepening our network coverage to include the rural population and enhancing the digital experience through 3G across the continent, ultimately offering a better brand experience for all our customers in Africa.” Mr. Kohli added, “We would like to thank the governments for their overwhelming support. We want to be a partner in Africa’s growth and will work closely with the governments and regulators to enable the telecom networks to touch all parts of society.” In a move that will accelerate the transformation of African mobile communications and positively impact the speed of economic development across the African continent, Bharti Airtel Limited and IBM announced the selection of IBM to manage the computing technology and services that will enhance Bharti Airtel’s mobile network. As well as deploying and managing information technology (IT) infrastructure and applications, IBM will deploy advanced technologies created by IBM Research, including the Spoken Web — a voice-enabled Internet that allows users to access and share information simply by talking over the existing telephone network, which is particularly compelling for populations with little or no literacy, visual impairments, or which lack access to computers. In addition, IBM plans to deploy a powerful content management system to offer rich media content such as music and video over mobile devices, while simultaneously facilitating the growth of the application developer community in Africa. Strategic partnerships with Ericsson, Huawei and NSN will exponentially improve the quality of the network across
the African landscape and expand the footprint of the 2G and 3G services. In line with global trends, Africa is experiencing a surge in demand for access to mobile data applications. The modernization and optimization of the networks will give Bharti Airtel an opportunity to offer exciting services in 2011. Mr. Kohli asserted: “The partnerships take us one step closer to our vision of making telephony available and affordable for everyone across Africa, even in the most remote areas which are at present disconnected from the world. We are also laying the foundation for the introduction of 3G HSPA wireless broadband as access to content is the right of every African citizen. Mobile broadband is a catalyst for economic growth and development. Many of our new customers will have an online experience for the first time in their lives.” The selection of IBM, Tech Mahindra and Spanco as strategic partners in the Business Processing Outsourcing (BPO) sector will provide Airtel’s customers world class support as they utilize the new and existing services. An additional benefit of the adoption of this BPO model will be the creation of more job opportunities in the countries that Airtel operates in within Africa. The global partners will also build local specialist skills, capabilities and resources. Recognizing that a good education is a child’s strongest barrier for poverty, Airtel strives to reach and uplift the underprivileged by investing in education. The Adopted Schools education initiative launched in 2010, in conjunction with local governments, provides refurbishments, uniforms, scholastic materials, furniture, teaching aides and broadband connections to schools in need. To date, 9,000 underprivileged children across 14 schools have benefited from the initiative. In 2011, Airtel will continue to improve and enhance the program by increasing the number of adopted schools across 16 countries on the continent.
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Agile IT, Agile Business By Jimmy Harris and Stephen Nunn No doubt about it: cloud computing is hot these days. It’s hard to read a newspaper or magazine without seeing something about the topic. As big as it is, however, cloud computing is actually part of an even bigger story: the fundamental re-creation of the traditional enterprise operating model. A whole panoply of technologies, applications and architectures is creating a way to scale the IT function up or down immediately to meet the near-real-time needs of any large organization. Tap into only the service you need, when you need it, for as long as you need it. The result is a far more agile and cost-effective IT function.
Agile workplace Agile IT is also transforming the way business is done by making it easier for people to use the right computing or communications device to access the information they need, when they need it, and to collaborate more effectively with others both inside and outside the organization. The traditional way companies have thought about linking workers with information has generally been device-specific. Now, mobile applications available at app stores are revolutionizing how consumers use their mobile devices, and we can expect similar developments at the enterprise level.
But if such a model for delivering IT capabilities is as compelling as it sounds, why not extend it beyond IT and apply the same model to any combination of people, process and technology? Because the cloud is more than a new IT architecture. It’s actually a new business design as well—a new, more flexible operating platform.
Eventually, CIOs will be able to think about an entirely different IT model: provisioning services by linking multiple providers and applications in a reconfigurable, end-toend manner to meet the ongoing needs of workers and the entire business.
The ultimate benefit and competitive advantage delivered through this new platform and design is greater organizational agility. An agile operating platform, enabled by outsourcing models and by an IT infrastructure that expands or contracts to meet demand, can help organizations be more responsive to the marketplace and create a more open environment for innovation.
The cloud model becomes even more compelling as one moves from hardware to software to processes and functions. In this third area affected by the cloud model, we find providers offering software or services that enable an entire function or workforce. Often called “software as a service,” this aspect of the cloud model begins to point to more radical changes in how businesses operate.
This newly enabled agility will transform business in several key areas:
Agile IT With traditional IT services, a company signs a multi-year contract for infrastructure support with an outsourcer or other provider. Once the ink is dry on the contract, those services are locked in for the specified period. With a cloud model, by contrast, IT services can be reconfigured quickly in support of new strategies and opportunities. When the needs of the enterprise change, a company isn’t saddled with irrelevant IT support or obsolete infrastructure. This kind of technology elasticity and scalability is fundamental to agility.
Agile processes
Cloud computing and software as a service present IT capabilities to companies on a pay-as-you-use basis. It’s an agile operating infrastructure that enables executives to make sourcing decisions in a rhythm that is more attuned to business cycles, rather than decisions that will result in a fixed condition over a period of many years.
Agile business But it is at the enterprise level where the use of the cloud model truly gets interesting. Here we find an enterprise operating platform that takes the app store approach to configuring IT capability and applies it to the business as a whole.
In this model, chief executives not only manage their organizations; they help design and redesign them too. They are managing, in fact, a virtual enterprise—an ecosystem of cloud providers, IT and business process outsourcers, and a host of other parties, both internal and external. We are some years away from this kind of enterprise operating model on a large scale, but the harbingers are already here. Consider “bundled outsourcing.” By having a single provider responsible for several related functions—human resources, finance, procurement, learning and so on—an organization gets the equivalent of the interoperability of technologies and processes at the enterprise level.
A new era The cloud model represents another stage in the relentless disaggregation of the business—breaking up the organization and its functions into logical components, keeping in house those that cannot be done more efficiently or effectively by an outside specialist, and letting someone else run everything else. This model requires new kinds of management styles, new ways of managing people and new ways of valuing the enterprise itself. Certainly these are significant challenges. But in a world where responsiveness and agility increasingly mark the difference between high performers and also-rans, agile IT and agile business will continue to be a distinctive feature of marketplace success. This article is based on “Agile IT: Reinventing the Enterprise” which originally appeared in the June 2010 issue of Outlook, an Accenture publication. Used with permission.
You can read the full article at: accenture.com/agileIT
© 2010 Accenture. All rights reserved.
Š2010 Accenture. All rights reserved.
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NEWS FEED
NICU ENTERS INTO MULTI-YEAR OUTSOURCING PARTNERSHIP WITH DIEBOLD www.tradingmarkets.com
NICU President and CEO John Tippets
North Island Credit Union, or NICU, has entered into a multi-year outsourcing partnership with Diebold, Incorporated, a provider of integrated self-service delivery and security systems and services. By leveraging Diebold Integrated Services, North Island Credit Union benefits from solutions and services, including self-service technology, deposit automation, cash handling, risk mitigation, Payment Card Industry (PCI) compliance, automated teller machine (ATM) maintenance service and software deployment, Diebold said. As a result of access to the technology through Diebold Integrated Services, 26 Diebold Opteva ATMs will be deployed as part of North Island Credit Union’s network to upgrade its self-service capabilities. More than half of the new ATMs will include full-function deposit automation capabilities, featuring Diebold’s enhanced note acceptor (ENA) and bulk-deposit Intelligent Depository Module (IDMbd). Diebold’s ENA accepts up to 50 mixeddenomination notes at a time and enables
DELTA AIRLINES PULLS THE PLUG ON MONTEGO BAY www.thestreet.com
Delta Cargo will bring back work from a contract call center in Montego Bay, Jamaica, where customers can call to inquire about shipments of animals, CEO Richard Anderson said in a recent recorded message to employees. “One of the ways to mitigate the impact of the recession is to insource work,� Anderson said. “It provides job protection and it is consistent with what the administration wants companies to do in the U.S. today, which is to bring back work from overseas and do our best to increase employment.� Forty contract employees had been taking Delta’s animal-transport related calls at the MBJ call center in Montego Bay, but crosstraining will enable employees in Atlanta and Minneapolis to handle the work, Delta said.
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Today January 2011
quick and accurate authentication and validation of cash deposits. Its IDMbd accepts up to 30 checks at one time and displays check images for member verification. Both the ENA and IDMbd enable streamlined transaction processing, giving credit union members faster access to funds and increased terminal uptime while providing considerable cost savings to North Island Credit Union. With Diebold as the single point of contact for the deployment and servicing of its new Opteva ATM fleet, North Island Credit Union gains improved vendor accountability and reduced operating costs, the company added. “The selection to partner with Diebold’s Integrated Services was an easy decision for North Island Credit Union to make,� said NICU President and CEO John Tippets. “Credit union members will enjoy expanded services with the latest in ATM technology, including deposit automation, while we were able to meet our objective of significantly lowering annual operating costs for ATM services.�
NEWS FEED
GENPACT SIGNS 6 YEAR CONTRACT EXTENSION WITH SERCO www.business-standard.com
Genpact Limited announced it has been awarded a six-year contract extension by international services company Serco for finance and accounting (F&A) services. Under this new agreement, Genpact will expand the scope of its services to further deploy best-in-class F&A processes for Serco’s growing operations while lowering costs. Genpact will be working to drive continuous process improvements for
Serco’s own Shared Services Center (SSC) organization in the UK, Asia-Pacific and the Middle East. Genpact is specifically handling procure to pay, order to cash, record to report, general accounting, treasury cash management, technical accounting, and payroll processes. “As an expert in business process management, Genpact has been an invaluable partner, working with us to
streamline and improve our diverse F&A processes, enabling us to improve the quality and efficiency of services to our customers across the international business,” said Helen Cain, director, Serco Shared Service Centre. “The focus on service levels that Genpact have delivered so far enables us to extend our relationship with them and therefore ensure continuity and further improve the effectiveness of our processes.” “Over the last five years, the partnership between Genpact and Serco has been able to address Serco’s growing global services business and the unique challenges within that environment while improving the outcomes of these end-to-end processes,” said ‘Tiger’ Tyagarajan, chief operating officer, Genpact. “We will continue to apply a highly granular and rigorous approach for implementing process and technology improvements as well as driving best practices into their F&A operations as we go forward. It is an honor to expand our work with Serco and ensure continuous process efficiencies so that their path to future growth and client service is smooth.”
PILOTS AGREE TO HELP PREVENT OUTSOURCING www.globalservicesmedia.com
Pilots at American Airlines, British Airways and Iberia have agreed to share information and use legal or other means to prevent outsourcing of pilot jobs, representatives of the pilot unions recently announced. The pilots said they are concerned about job stability after the three airlines were granted antitrust immunity by U.S. and
European Union authorities to pursue cooperative business agreements for transAtlantic flights. American’s Allied Pilots Association, the British Airways Company Council of the British Airline Pilots’ Association and Sindicato Espanol de Pilotos de Lineas Aereas-Iberia said in a joint statement that they are presented with a dynamic industry
environment. “It’s also clear that we must take steps to protect the legitimate career expectations of the pilots we respectively represent,” the pilots said. “We recognize the potential threats of outsourcing in the current commercial environment and are committed to working together using all appropriate industrial, legal and other means to resist any attempt to outsource pilot jobs. “We have therefore entered into a mutuality agreement to facilitate information exchange and the development of a common strategy to help ensure a fair distribution of job opportunities among our respective pilot groups. This mutuality agreement will remain in effect as long as the joint business venture and joint operations of our airlines continue.”
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NEWS FEED
BHARTI, IBM FINALISE OUTSOURCING DEAL www.itweb.co.za
Indian telecoms giant Bharti Airtel has finalized a 10-year outsourcing agreement with IBM, to deliver mobile Internet services across the African continent. IBM will consolidate and transform 16 different IT environments across Bharti’s African operations into an integrated IT system, and will oversee the management of all applications, data centre operations, servers, storage and desktop services. The agreement calls for IBM to provide customer support applications that include customer relationship management, billing, and self-service that will assist Bharti in delivering 2G and 3G mobile services. The company claims the increased mobile communication will go far to speeding up
economic development in Africa. Bharti points to a Deloitte report, which found that every 10% jump in mobile penetration is estimated to drive a 1.2% gain in gross domestic product. Bharti has 40 million customers across its African operations and is targeting 100 million by 2012-2013. In addition, IBM plans to deploy a media management system to offer content such as music and video over mobile devices, while simultaneously facilitating the growth of the application developer community in Africa. Frost & Sullivan industry analyst Protea Hirschel says the move is indicative of a strong outsourcing focus in Bharti Airtel’s business model. She is confident
the move will accelerate Bharti’s ability to provide affordable telecommunications to the continent. Hirschel says the foundation offered by Zain Telecommunications across the region will limit most of the challenges for the company in the region. Sunil Bharti Mittal, MD of Bharti Airtel, describes the approach as a transformational business delivery model and maintains it is a first in Africa’s telecoms industry. “There are huge opportunities throughout Africa to transform how people communicate and how communities interact. Delivering on that opportunity through affordable mobile communications for everyone is our focus,� he concludes.
CAPGEMINI TO OPEN FINANCIAL SERVICES DELIVERY CENTER IN CHARLOTTE, N.C. CBROnline & www.nearshoreamericas.com
The Financial Services Global Business Unit of Capgemini has announced that it has selected Charlotte, N.C. to establish a delivery center in the U.S. market to support its clients in the banking, insurance and capital market sectors. “The establishment of Capgemini’s new facility in Charlotte is a major milestone in efforts to expand our presence in the U.S. and aligns with our strategy to open delivery centers that best serve our client needs,� said Roy Stansbury, managing
director, Capgemini Financial Services North America. “Our new delivery center in Charlotte, a city recognized as a financial services hub, will strengthen Capgemini’s ability to serve our current and prospective financial services clients, and help drive additional momentum for Capgemini in the U.S.� “Capgemini is pleased to open a new facility in a location that is consistently ranked as one of the best cities in which to live and work in the U.S., and is also a
center for business, finance and technology,� concluded Stansbury. “We are excited to become part of this dynamic community.�
SOCA SIGNS ÂŁ157M OUTSOURCING DEAL ICT SERVICES www.nearshoreamericas.com
Official Logo of the Serious Organised Crime Agency (SOCA) of the UK
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Today January 2011
ICT services for the Serious Organised Crime Agency (SOCA) of the UK have been outsourced to the Logica-led i2d consortium in a ÂŁ157m deal that will last for 10 years. The programme was said to be aligned with government commitment to make savings through better use of technology, shared services and re-use of existing government assets. Trevor Pearce, director general of SOCA, said: “This contract secures an efficient and sustainable IT platform which will enable us to modernise and enhance our technological capabilities in fighting crime and improve
the effectiveness of UK law enforcement in dislocating criminal markets.� But concerns have recently arisen over the disadvantages of outsourcing compared with other ICT options available for public sector. In January, public sector organizations were warned by IT professional body Socitm not to rush into investments in outsourcing. Socitm said outsourcing could “very much� delay the benefits of cloud based computing. The organization said that cloud was the only justifiable means of investment in ICT enabled automation, which it said was necessary to keep public services affordable.
BLOG BEAT NEWS AND COMMENTARY FROM BLOGGERS AROUND THE WORLD OVER A QUARTER OF UK IT PROFESSIONALS HAVE HAD ENOUGH www.computerweekly.com
by Karl Flinders
The questionnaire created by a reader of this blog, which set out to shed light on the debate about the UK IT skills shortage, has no had a significant 163 respondents. The number of people filling in the survey hit 163 now, after a week being online. Feel free to fill it in as I will carry on checking, but I think we have a number big enough to put together some meaningful results. Thanks again Matt for you contribution to the blog. The first figure that stands out is that over a quarter of UK IT professionals that responded (43 out of 163) do not expect to be in the IT profession five years from now. As I have done for the previous week I yet again publish the comments of the most recent respondents. I will now beginning to blog about some of the other results. Here are some of the latest comments:
our jobs, and are probably paying a lot less in taxes than we would be if we were working in the UK! The large companies have members of the government in their pocket allowing them to exploit loopholes in the ICT laws, or even blatantly ignoring these laws. I know for a fact that there are migrant workers that have been working in the UK for over 2 years on ICT’s where the limit is supposed to be 18 months. And I could name the company, but I won’t here.” 4 - “Although I expect to be working in IT in 5 years time the most common problem in the UK is companies cutting costs & corners which results in sacrificing jobs in the UK & the downgrading of jobs in the UK so that salaries can remain the same, i.e. in long term pay less for a job that was paid the market norm 4 or 5 years ago which means no pay increases.”
1 - “There are fewer and fewer positions available.” 2 - “I am an IT Contractor. At least 3 contracts have been terminated due to offshoring to people with supposedly the same skill set but it becomes quickly apparent that they are not up to it. But accountants see bottom line, not quality of service.” 3 - “There won’t be many IT jobs left in the UK as they are either being off-shored or the large corporations bring in migrants on Intra Company Transfer schemes. This is not because there is a skills shortage at all, come on, can anyone really believe that? This occurs for one reason only, MONEY, its cheaper to bring in migrant workers. I didn’t work for 3 months last year, couldn’t get any work, I finally landed a job in The Netherlands, as a friend of mine also had to do. So now us UK residents have to go and work abroad because Indian people (mainly) have
5 - “It appears to me that there is not an IT skill shortage as such - in fact as jobs are off shored, the pool of skill in this country should become deeper - assuming people aren’t left out of employment so long they become deskilled. The IT skills I have seen in offshored people range from competent, but inexperienced, through to non existent - the general consensus is that once you factor in the inevitable language and cultural differences, these resources may cost 1/3 as much as UK people, but you only get 1/3 of the productivity of a UK person. In my opinion the myth of a skill shortage in IT is just that - a myth - if companies are able to replace people here with 1/3 skilled people elsewhere and still not suffer any consequences. On the other hand, those people in the UK may well be patching over the skill gap by having to work harder to keep everything afloat...” 6 - “I have had enough.”
THE LESSONS FOR UK IT WORKERS, AS INDIAN IT GIANTS PROSPER www.computerweekly.com
by Karl Flinders
I was talking to Tata Consultancy Services’ (TCS) European head AS Lakshmi today. Like his counterpart at Infosys, BG Srinivas, when I spoke to him last week, there was for the first time a bit of commitment to say that the economy is getting back to normal. Both companies have posted strong finacial results in the last few days. But should UK IT professionals look positively on this or should they be worried? Obviously with companies such as TCS and Infosys reporting strong results it must be a signal that IT spending is back. But the problem for some IT professionals will inevitable be the fact that many UK based corporates are spending in India and as a result building their offshore staff levels. Could this be the beginning of the end for the in-house IT team? Could the recession’s IT legacy be that it instigated the end of in-house IT? Or will that never happen? Last week ladies’ fashion retailer Aurora outsourced its IT. There just seems to be more and more outsourcing deals and IT professionals are leaving IT in their droves. Recent figures from e-skills also revealed that fewer students are studying IT.
e-skills also revealed that businesses are offering less training to in-house IT staff. If the Indian companies are the Bellwethers of the IT services sector it signals that things are getting better. But an IT services bellwether doing well does not automatically result in UK IT professionals benefitting. In fact it could be a sign that things are getting worse for them because so much work is done offshore. It goes for any of the service providers now. IBM, HP, Capgemini, Steria and many, many more have delivery capability in India. Large businesses also have their own captives in low cost destinations like India. But there could be a glimmer of hope because many of the Indian companies are realising the importance of local delivery. The likes of Wipro and HCL are talking it up. The Indian suppliers are not just providing businesses with low cost services but are providing technology to support strategic growth strategies. As a result there is no reason why UK workers cannot work for them in UK customers. Or is this wishful thinking? Some of these firms add thousands of workers every quarter. But how many are UK workers?
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THOUGHT LEADER
RISING TO THE VIRTUAL CHALLENGE By Owen Garrett
Virtualization adoption continues to accelerate, as organizations look at ways to recover quickly from the economic climate. Here’s why application management is increasingly challenging, as virtualization adoption rates continue to rise. A recent report published by IT analyst firm Forrester Research highlighted how enterprises using virtualization are experiencing improved service quality and operational staff productivity. Research conducted by Aberdeen pointed out similar benefits, particularly virtualization’s ability to reduce complexity in the data centre. Regardless, , adoption of virtualization technology is far from a straightforward process. The nature of the technology, combined with the rapid pace at which organizations are embracing it is creating unprecedented levels of complexity that IT teams have to address. VIRTUALIZATION CHALLENGES
According to the analyst house IDG, keeping up with all of these changes is crucial and requires IT teams to be more rigorous about adopting standard processes. IDG also highlights the need for management software that ensures processes are executed consistently and automatically. These comments reflect the views of top IT executives in the UK whomwe recently surveyed. Perhaps unsurprisingly, we found 96 percent of the CIOs and senior IT directors at large enterprises surveyed already had virtualisation in place. More interesting, however, was the fact that of those with virtualisation in place, 63 percent admitted they are concerned about web application performance. In fact, more than two thirds (68 percent) said understanding how their website is performing is a key challenge. These findings are troubling, given the rate at which virtualization continues to be adopted, especially by organisations with small IT teams unable to divert huge amounts of resource towards fighting fires. All too often, these organisations run into problems as a result of jumping headfirst into virtualization, without considering how projects will impact the applications they have to manage. This leads to major issues such as applications running slowly or experiencing downtime because of difficulties managing the virtual environment. THE IMPORTANCE OF PLANNING AND MANAGEMENT
Avoiding such problems is clearly important and requires a combination of careful planning and management tools. On the planning front, enterprises should devotesufficienttime to assess the impact a virtualization project wouldhave on their organization. This planning needs to involve predicting data centre growth, estimating server workloads and setting application performance objectives. While clearly important, few organizations spend
enough time on this stage, resulting in problems further down the line when a lack of capacity causes problems regarding the performance of applications. Avoiding such issues when starting to run applications in a virtualized environment can be achieved through the deployment of application traffic management tools. These management tools offer organizations a range of benefits. Firstly, they monitor the real-response time of applications so performance can be benchmarked against SLAs and problems can be addressed as soon as they arise. This monitoring can be done through a dashboard that provides information on how all applications are running in an easy-to-follow format. Secondly, they allow enterprises to implement traffic management policies, giving IT teams full control over how individual requests are optimized, routed and transformed. Intelligent traffic management policies can evolve over time as user demands and the needs of the business change, but importantly they give the IT team a good level of control. Finally, through a comprehensive range of acceleration and optim ization techniques, having management tools in place means organizations can deliver applications that are available at all times, regardless of demand levels. This is essential, because many businesses are now reliant on web-based applications for mission critical tasks. THE PERFECT STORM
More organizations than ever are experimenting with Cloud and virtualisation, keen to make the most of the wide-ranging benefits the technology promises. As a result, a greater number of enterprises are encountering the challenges that comes with rolling out a virtualized environment. With more applications nowdelivered across multiple physical, virtual and Cloud environments, keeping them fast, secure and always-on has quickly become a big management headache. As highlighted by analysts and our research, current conditions are creating the “perfect storm” for IT professionals. On the one hand, enterprises are keen to enjoy greater flexibility and cost savings. On the other, virtualization is creating serious management issues that unless tackled threaten to hinder the benefits of virtualization and Cloud for all manner of business. Careful planning and intelligent management tools can help IT teams navigate this perfect storm, but it’s crucial action, taken now before it’s too late, that’s important. ABOUT THE AUTHOR
Owen Garrett is Product Manager at Zeus Technology. He joined Zeus in 1999, initially as a member of the software development team. Owen also is deeply involved in the research and development needed to ensure Zeus continues to launch next-generation software and application technologies, based on current and future customer and market demands. He is joint author of a number of patents relating to application delivery. He can be reached at owen@zeus.com
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The 2011 Outsourcing World Summit
FIND OUT HOW TO LEAD YOUR COMPANY TO SUCCESS IN THE NEW OUTSOURCING LANDSCAPE. IAOP® presents the 14th edition of its world-renowned conference on February 21-23, 2011 at the Renaissance Esmeralda, Indian Wells, California. Over the last two turbulent years, the outsourcing industry has actually grown! Companies have found that outsourcing has shifted from a management option to a management necessity. With this, buyers are looking at further expanding their future outsourcing programs across more divisions, advisors are sought out more than ever to help firms navigate and protect their interests in tough terrain, and providers are facing the challenges that come with presenting outsourcing solutions in today’s more complex environment. This has created an environment where outsourcing professionals are sought after for advice and counsel by their companies. The 2011 Outsourcing World Summit will delve deeply into issues critical to today’s professionals and companies including globalization; rural sourcing; corporate social responsibility (CSR); cloud computing; managing risk through sourcing strategy – multi-service provider environment, best of breed and offshore; knowledge process outsourcing (KPO); today’s outsourcing tools & how-tos; vendor management; outsourcing as a procurement discipline; transition and governance; exploring new geographies & transboundary outsourcing; and government outsourcing. To view the full program and to register, please visit www.IAOP.org/Summit.
www.IAOP.org
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EXECUTIVE SEARCH EXECUTIVE SEARCH
TRENDS AND PREDICTIONS
RESOURCE BOX
Michael Corbett IAOP Chairman
“It’s time for uss in d devellop o ed econ nom mie es to rea ealilize ze the value e of outs tsou ts o rcing g an and d to o ssta tart rt iinves esting and nd d compe peti t ng fo or a sh har are e of tthe g glo lobal, mu ulti-triilllio on dolllaarr outsourcing in indu dust stry.�
Jagdish Dalal IAOP Managing Director of Thought Leadership
“ ‘S ‘Soccio io-ssou ourcing’ g’ wilill exte end the d finition of rural sourccing de g as we haave been ob bserving g for the e last se severa raal yeaars.�
Bobby Varanasi IAOP Asia Ambassador
“Expect to o see more e ruraal so sou urciing as prov pr ovider erss becom me incre eassingl gly so oci cial conscious and ta takke a mo ore e st strattegic approach off tapping pp into o a ‘ttrain nable’ employee em ep poo ol.�
20
Today January 2011
Publisher’s Note: As a new year gets under way, in-house experts to glean insights into how the fi will evolve in the coming months. From their rem emerged: 2011 will be the year that people start outsourcing, as the practice becomes more prev acceptance. Read on, to learn what our crystal b – Ali Comelek Predictions tend to be the pastime of fools. As Wilbur Wright admitted in 1908: “I confess that in 1901, I said to my brother Orville that man would not fly for fifty years. Ever since, I have distrusted myself and avoided all predictions.�
As the global economy continues to grapple with uncertainty, corporate decision-makers are trying to play soothsayer. But Globalization Today saved you the trouble of gazing into a crystal ball. For 2011, we again asked many of
TRENDS AND PREDICTIONS
011
we spoke with our field of outsourcing marks, a consensus t talking differently about valent and gains wider ball revealed. our thought leaders from IAOP and our strategic advisory board members from around the world to weigh in. Not to brag, but over the past several years, IAOP pundits have racked up a respectable track record at predicting
the trends ahead. Our 2010 predictions that non-committal customers would renegotiate contracts and scoff at longterm decisions proved true, as did forecasts of advanced technology becoming increasingly important. In 2010, we also correctly foretold that Latin America would boom, global hiring rebound and consolidation accelerate. What you call outsourcing, how and where you procure it, and how you perceive it, could all change in the coming year, according to our forecasters. IAOP’s principals predicted increased political acceptance of outsourcing; sourcing from all shores as well as domestically; an emerging retail model to outsourcing; and companies outsourcing multiple functions with fewer vendors. The association’s leaders and members from around the world also predicted continued revenue growth; sustained Latin American growth; innovative partnerships and consolidation; new and transformative technology; better risk management; and competition for talent. Here’s what our prognosticators had to say. Some insights will confirm your instincts, while others will challenge your assumptions. Regardless, you’ll find the following predictions relevant, timely and of practical use.
RESOURCE BOX
John Hindle IAOP Strategic Advisory Board Member
“The he e conttin nued d tre end towar ard bundling… cou uld be e desscrrib ibed as a shift from ou utssourccing to o sourcing g o off busin i es esss se ervvicess, in ncludin ing g information in n tech te hno olo ogy.”
Julia Santos Chair of IAOP’s Global Human Capital Chapter
““C Contin nued d maarke k t un ncce ert rtaintiies will prrompt compa p niies e to co ons n er erve ve mor more cassh, sh paare inven nto t ries, st stre ream re amlililin am ne ne sttaaffi ffing n and nd d rethi hink hi n exp xp pan a sion plans.”
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TRENDS AND PREDICTIONS
1. INCREASED OUTSOURCING ACCEPTANCE
RESOURCE BOX
Santiago Pinzón Galån Chair of IAOP’s Latin America Regional Advisory Board
“With h service providerrs and ou utsourc rcin i g clie l ent ntss lo l okkin ing g for all means to o savve on o cost sts‌ ts‌th t e La th L ti tin n Americaa re r gion n joinss the h rank nkss fo forr the co comp m etition of the e grow wing g global outtso gl sourcing g marke et. tâ€?â€?
President Barack Obama’s comments in India this November about outsourcing set the stage for potentially creating a more favorable political outlook on outsourcing in the coming year. Meeting with government and business leaders from both countries this fall, the Democratic president said, “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.� As the management practice of outsourcing matures and is used widely by organizations across the globe, more people are coming to see outsourcing as “one of the most powerful tools available today for building better companies and better economies,� says IAOP Chairman Michael Corbett. In fact, “the top 200 companies in the global outsourcing industry employ approximately 4 million people and a full one-third of those jobs are in the U.S.,� says Corbett. “It’s time for us in developed economies to realize the value of outsourcing and to start investing and competing for a share of the global, multitrillion dollar outsourcing industry.�
1.
2. A PROLIFERATION OF NEW SOURCING ARRANGEMENTS
Atul Vashistha IAOP Board Member
“Pri “P rici cing ng will w rem ma main stabl ble e wh hile e inflationary presssu sures ar are e worrry rrying.�
24
Today January 2011
Expect to see a profusion of myriad sourcing arrangements, of a greater number and variety than in the past. Socio-economic pressures on leading countries -- U.S., Britain and Germany -will compel companies to consider onshore outsourcing or center establishments in the same light as offshore outsourcing, predicts IAOP Managing Director of Thought
Leadership Jagdish Dalal, a Certified Outsourcing Professional. Economic incentives provided by local and federal governments for encouraging employment in depressed economic areas will encourage competition with lower rate offshore destinations, said Dalal, president of JDalal Associates, LLC. “This ‘socio-sourcing’ will extend the definition of rural sourcing as we have been observing for the last several years,� he said. Domestic outsourcing is projected to gain mainstream visibility with provider firms creating new jobs in the country that will leverage both “work-from-home� concepts and a skilled workforce that’s not mobile in such markets as Michigan, Idaho and Wyoming, predicts IAOP Asia Ambassador Bobby Varanasi, COP, Chairman & CEO of Matryzel Consulting, Inc. “Also expect to see more rural sourcing as providers become increasingly social conscious and take a more strategic approach of tapping into a ‘trainable’ employee pool where emphasis will be placed on both sustainability and serving the domestic market,� said Varanasi. No matter where outsourcing work takes place, the bottom line is “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,� says Corbett. IAOP Strategic Advisory Board Member John Hindle sees the outsourcing industry as moving into a new phase. “The continued trend toward bundling, driven by clients’ need to rationalize the outsourcing service provider portfolio and by adoption of Global Business Service models, could be described as a shift from outsourcing to sourcing of business services, including information
2.
TRENDS AND PREDICTIONS
technology,” said Hindle, who also serves as the lead marketer in charge of outsourcing for Accenture. 3. DOUBLE-DIGIT REVENUE GROWTH
In 2010, revenue of outsourcing service providers grew by more than 10 percent, the fastest pace in recent years, according to IAOP’s Global Outsourcing 100 data. This rate of growth will continue in the coming year, the association predicts. Smarter buyers will return to the market in 2011 with greater confidence in the economy and demand will grow as outsourcing continues to be accepted as a mature business practice, Hindle says. However, corporate pressure to reduce costs and lower longer term commitment will continue to fuel the current trend of highly competitive bidding for services and shorter duration of contracts, with favorable terms embedded to alter volume of service without re-opening contract negotiations, Dalal predicts. Julia Santos, COP, director worldwide strategic outsourcing, Johnson & Johnson Group of Consumer Companies, and chair of IAOP’s Global Human Capital Chapter, asserted, “Continued market uncertainties will prompt companies to conserve more cash, pare inventories, streamline staffing and rethink expansion plans.” Atul Vashistha, COP, IAOP board member and chairman, Neo Advisory & Neo Group, added: “Pricing will remain stable while inflationary pressures are worrying.”
3.
4. CONTINUED GROWTH IN LATIN AMERICA
IAOP expects the Latin America region to experience a boom in 2011, particularly in Brazil, Mexico, Chile, Colombia, Costa Rica and Peru, which are strategic locations to the U.S. market.
The growth will be largely driven by the attractive mix of cultural and language compatibility, the size and quality of the labor pool, and strong government support for the industry, says Santiago Pinzón Galán, chair of IAOP’s Latin America Regional Advisory Board and Executive Director of the Chamber of BPO&IT at ANDI (National Business Association of Colombia). “With service providers and outsourcing clients looking for all means to save on costs, geographical proximity as another means to cut travel expenses and minimize remote management risks, the Latin America region joins the ranks for the competition of the growing global outsourcing market,” he says. But the region will have to address compliance, legal, financial and tax barriers to outsourcing to best succeed, says Santos. “Political and economic stability of the target country is a very important element in Western companies willingness to invest in offshored or outsourced services,” Santos said. “Issues with violence, tax barriers to offshoring and the red tape involved in offshoring to a particular country could discourage investment.” Stay tuned for more analysis of this important region, as IAOP and corporate member ANDI host the first The 2011 Latin American Outsourcing Summit May 26-27, 2011, at Las Américas Global Resort and International Convention Center in Cartagena, Colombia.
4.
5. ADVANCES IN PRACTICES, TOOLS AND TECHNOLOGY
The trend of companies using advanced management practices, tools and technologies to provide improved value and operational flexibility and performance will continue in 2011, although in this regard the outlook is a bit mixed.
RESOURCE BOX
Matt Shocklee IAOP U.S. Ambassador
“In outso ourcing g, ad dvanced d technologies willl be major ma gam me changer ers impacting prrod ductiivity and resullti ting ng g iin co cost stt man nage eme m nt, and go governan an nce c and riskk com mpliiance.”
Charlie Aird U.S. Shared Services and Outsourcing Leader for PricewaterhouseCoopers
““C Cloud d com mpu p ting n will beco ng come a major fu utu t re fac a torr ass an ITT out utso sour urci cing ng straategy.”” st
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Call-to-Action Outsourcing Insights by WNS
Professional Insight to Support the Business Development of Law Firms Mark Wiggins, Senior Vice President, Research and Analytics, WNS Global Services
industry sector or geography. Win / Loss analysis of previous bids is conducted more systematically than ever before. A bid criteria for new pitches has been developed in order to prioritize where limited business development resources should be deployed. While these initiatives have all proven their worth and improved the performance of firms, the bar is constantly being raised and these methods are no longer enough to stay ahead of the pack.
Knowledge: The New Battleground
It is akin to an intelligent route through the perfect storm.
The Perfect Storm In the current business environment, law firms face heightened pressure from a perfect storm of market forces: Deregulation, globalization, smarter client procurement strategies, diminished customer loyalty, commoditization and increasingly aggressive competition. To counter these looming threats to their survival and prosperity, law firms are searching for more innovative methods to raise their level of strategic and tactical engagement with clients. One such strategy is to draw upon highly skilled external research capabilities to produce the type of critical information that can enable law firms to facilitate better sales outcomes through more precise and deeper insights on opportunities within target companies and industry sectors.
Forewarned is Forearmed The increasing sophistication of inhouse counsel and procurement teams means that law firms need to be better prepared and differentiated in order to win in today's rapidly changing battleground. Traditionally, in law firms, there is too much information and not enough analysis. Too little time to generate meaningful insight and understanding from the plethora of sources that lawyers and business development professionals can use to create real competitive advantage. The last decade has seen a sea change in the business development approaches of the leading commercial law firms. Account plans are compiled for key clients with rigorous analysis of cross-sell and up-sell opportunities. Communication plans are in place for circulating thought leadership articles on the implications of regulatory and industry changes for their captured existing and potential client pool. Markets are segmented and target client lists are often split by
Insight and analysis is the new battleground, with firms seeking a deeper understanding of their clients, prospects and sectors in order to engage in more relevant commercial dialogue with their clients and prospects. Armed with this insight, firms can differentiate themselves from competitors and move the dialogue from the general counsel and into the boardroom, allowing them to be positioned as true strategic advisors, rather than plain vanilla legal experts. More relevant knowledge on individuals, prospects, clients, industries and geographies can give a business development team the edge in identifying 'white spaces' to create new business propositions. The additional insight into the business context can give firms the right ammunition to balance the push and pull approaches by addressing questions such as: What are my client's five biggest legal risks?; What insights on legal risk mitigation might be drawn from examining my client's competition?
This Time It’s Personal In addition to richer business analysis, the leading law firms are also recognizing that beyond the same syndicated subscriber sources that most law firms receive (but often do not have time to filter, crossreference, synthesize and apply), there is also an exponentially increasing wealth of relevant knowledge in the public domain on individuals. As well as having relentless curiosity, perhaps a given in the naturally investigative legal profession, the most successful salespeople are those who connect with clients and prospects on the personal as well as the business level. What industry associations do my clients belong to? What are their favourite hobbies and activities? What educational institutions did they attend? What conferences have they spoken at or attended in the last 12 months? What publicly quoted comments have they made in the media? What sporting teams do they follow? Who influences him or her? Where do they go on holiday each year? With the rise of online industry forums, business and social networking sites, online industry content, we are seeing a new knowledge era on the individual where it is possible to build a picture of motivations, interests and behavioral patterns to aid firstmeeting preparation and the next steps for planned (strategic) and event-driven (tactical) engagements. When this level of personal understanding is combined with the type of deeper company and
industry-specific analysis mentioned earlier, law firms can approach a client or prospect meeting with a new level of preparedness that few of their competitors will be willing to match.
Barriers to Success Until recently, law firms seeking access to this type of service were constrained both by internal headcount restrictions and by the commercial models commonly used by external service providers. Information resource centers were one of the first law firm business divisions to have their budget cut in the recent downturn. In mid-tier firms, the layer of analysts who previously supported knowledge collation activity also went by the wayside. The remaining business development support resource was often either too senior and timeconstrained to undertake this type of analysis, or too junior to confidently engage in peer-to-peer dialogue with senior executives on the client side. When searching for external service providers, many traditional Knowledge Process Outsourcing providers (KPO) offer an offshore model where the client is required to contract a dedicated team of full- time employees. However, the peaks and troughs of demand cycles, combined with the high attrition rates of some KPO providers, have meant that many firms have been uneasy with this model. Alternatively, some KPO providers may also offer the flexibility of a project model, but firms often find the service being inhibited by capacity bandwidth or the lack of a historic relationship, which precludes the service provider from re-using knowledge of a law firm's unique approach to business development and the working environment.
The Revenue Harvest: You Reap What You Sow With legal service providers now evolving new, cost-effective models to meet the market demands, it is clear that knowledge service providers can play a significant role in supplying both templatized and customized analyses to provide a new layer of relevant insight that can make all the difference in winning new deals. Law firms can gain a deeper understanding of the personal and business priorities of the target audience, examine inter-relationships to more precisely match business needs with subject matter expertise and increase industry vertical knowledge depth. Law firms can more adroitly navigate the perfect storm by competing with knowledge.
For more insights on outsourcing or 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.
TRENDS AND PREDICTIONS
RESOURCE BOX
Dylan Taylor IAOP board member
“T “Technol log ogyy pl plat a form ms th hat a manag age e outsourcing rela lati tion o ship ps have ve bec e ome mo ore o orr le less ‘table st stak a es’ and no lon ong ger pres pr esen entt a co c mpetitive ad a vant ntag age. e.�
Neil S. Hirshman IAOP Strategic Advisory Board Member
“We ha h ve been se see eing compaanies c mbine multtip co iple pro ro ocesses in th heir outs ou tsourc rcin ing g inittiati iaat vess rathe er th han o tsourcin ou ng si sing n le pro roce esse es or fu unctio ons on a stand-alone ne bassis..�
Ossama Nazmi Chairman of IAOP’s MENA Regional Advisory Board
“Companie es heaadi din ng for [b busin ness co ons n olid dation] will enjoyy an n eaasiier and leaner vendor manage eme ent,, coup pled with higher ba barg gaining ai pow wer with th hose f w selected fe ed ven en ndors.�
28
Today January 2011
“In outsourcing, advanced technologies will be major game changers impacting productivity and resulting in cost management, and governance and risk compliance,� says Matt Shocklee, COP and IAOP U.S. Ambassador. Charlie Aird, U.S. Shared Services and Outsourcing Leader for PricewaterhouseCoopers, said, “Cloud computing will become a major future factor as an IT outsourcing strategy.� Cloud computing will bring both “simplicity and complexity,� according to Accenture’s Hindle. “It will simplify and standardize the procurement of specific services, but it will also increase the number of providers and complicate the service architecture,� he said. “Buyers will need help integrating new capabilities with legacy systems, and ensuring security and performance in the process.� Varanasi sees an “explosion of cloudbased business models� emerging as tech companies woo governments, especially in fast growing emerging nations, to adopt new technology-enabled and citizen-centric services. But technology alone won’t be enough, some IAOP members say. Varanasi sees less emphasis on technology, with the advent of an increasingly younger workforce in most developing nations. “The emphasis on technology for the sake of it will reduce sufficiently enough for companies to shift their emphasis on consumer satisfaction to consumer distinctions, where ease of access, flexibility and service-centricity will become a norm,� he said.
5.
IAOP board member Dylan Taylor, Chief Executive Officer, Colliers USA, said, “Technology platforms that manage outsourcing relationships have become more or less ‘table stakes’ and no longer present a competitive advantage.�
6. MORE “COMBO PLATTERS�
If you envision companies as ordering their outsourcing services off a menu, more will be choosing “combo platters� in the coming year. This trend will reflect how they are outsourcing in a more integrated way, as part of comprehensive strategic plans. “We have been seeing companies combine multiple processes in their outsourcing initiatives rather than outsourcing single processes or functions on a stand-alone basis,� says IAOP strategic advisory board member Neil S. Hirshman, COP, partner at Kirkland & Ellis LLP. “And these companies are creating innovative ways of managing multivendor environments and the connections between dependent services.� Ossama Nazmi, Chairman of IAOP’s MENA Regional Advisory Board, expects that major companies will seek to work with only a handful of vendors and hire those that have global reach and presence in both established and emerging markets. “Companies heading for that type of business consolidation will enjoy an easier and leaner vendor management, coupled with higher bargaining power with those few selected vendors,� said Nazmi, vice president of Xceed.
6.
7. RETAIL-IZATION OF THE MARKETPLACE
Where will companies “shop� for their outsourcing services? Just as with your holiday shopping, it depends on what you’re looking for – price, service, something different, or advice from someone you trust. With the increased specialization in the provider landscape, Accenture’s Hindle sees three categories of providers emerging: t Big box operations – offering bulk standard, commoditized services at
TRENDS AND PREDICTIONS
attractively low prices, leveraging scale and volume, appealing to buyers interested primarily in reducing cost t Boutiques – specialty shops offering differentiated functional or industry solutions, appealing to buyers seeking a more customized service t Department stores – multi-service houses offering one-stop shopping with access to a wide selection of their own label and branded offerings, augmented by deep service integration capabilities, appealing to buyers seeking trusted advice and support “As growth returns to the outsourcing industry, buyers re-assess their sourcing strategies, globalization levels the playing field, and new tools and technologies are more widely deployed, the structure of the outsourcing industry will begin to look much more like a typical retail model,” Hindle said. “Thinking about sourcing decisions in this simple framework can help buyers crystallize their sourcing decisions and ask themselves ‘should I shop at WalMart? Orvis? NiemanMarcus’?” Dalal also predicts a greater stratification of service providers ahead, with large broad firms and large specialized firms dominating, while middle- and lowersized providers struggle to survive.
7.
8. INNOVATIVE PARTNERSHIPS AND CONSOLIDATION
Look for greater opportunities for providers to collaborate more closely with their customers in 2011, our experts said. “Companies will look to their strategic external providers to help them cut costs, do more with less, work smarter and be innovative,” said Santos. “We will see more innovation coming from collaborative relationships rather than ideas coming from internal sources. Contracts will need to be designed to capture more
of the collaborative partnership spirit. Companies will better understand that they cannot do it alone and need the skill and expertise of their providers to survive.” Santos also predicted the emergence of alternate funding models and other new business models, to help companies with cash flow. Also expect more cross-border partnerships in 2011, as cash-rich provider firms from developing nations invest into mid-market domestic provider firms in the U.S. to offer collaborative multi-country services, Varanasi says. Challenging local economic conditions in India and the resulting competitive pressure to reduce price offerings of outsourced services will lead to increased consolidation of offshore providers, Dalal said. This trend will provide further opportunity for established U.S. providers to acquire struggling providers and increase their offshore presence.
8.
9. MORE EMPHASIS ON RISK MANAGEMENT
Recruiting, developing and retaining key employee talent will be a critical challenge facing organizations in 2011. To prepare for this, IAOP continues to see ongoing demand for its professional certification and training programs under its Outsourcing Professional Certification Framework. Emerging outsourcing destinations also are expected to increasingly adopt IAOP’s training to build their ranks of skilled outsourcing workers, first seen by Malaysia in 2010 with the government’s endorsement of the COP training. Says IAOP’s Latin America chair Galán, “Latin Americans are always open to learning by adapting best practices, developing strategies and promoting education and professional development to increase the region’s competiveness as an offshore and nearshore destination. That openness and the human talent you find offers a great combination to compete in the outsourcing world.” Dalal anticipates corporations will use more supplementary staffing as a normal stop-gap measure to control headcount while gearing up to handle anticipated demand increases. This trend will alter how supplementary staffing companies compete against traditional outsourcing service providers. In IT, engineering and R&D, such project based staffing will become a form of “hybrid outsourcing,” he said. Social media also will be increasingly used by companies to recruit employees globally, and also to mine consumer behavior, Varanasi predicts. So, how many of these trends will come true and to what extent will they affect us all? Considering our pundits’ excellent batting average in spotting trends, you’re well advised to take their predictions to heart.
10.
In 2011, companies will experience the need to better manage market, financial, security, and other risks, IAOP members predict. “Global regulation, global economic policy and technology security remain hot button issues,” according to Taylor of Colliers USA. With the increased reliance by companies on the Internet and cloud computing, companies will need to develop “rock-solid data and information security and privacy strategies and plans,” says Shocklee, president and CEO of Global Sourcing Optimization Services. “Government regulations will continue to be enforced and companies will need to adapt and find better, more efficient ways to handle compliance, legal and financial risk,” said Johnson & Johnson’s Santos.
9.
10. TALENT COMPETITION
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VALUE HEALTH CHECK
SOURCING RELATIONSHIP MANAGEMENT (SRM): THE SURE-FIRE WAY TO IMPROVING YOUR OUTSOURCING RELATIONSHIPS By Matt Shocklee
As 2011 gets underway, here are fresh ideas to help you maximize the inherent business value of your outsourcing relationships. It’s that time of year again, when we think about our personal goals for 2011 and typically make a New Year’s resolution to improve our relationships with family and friends. Why not make a similar resolution, to improve your outsourcing relationships? The best way to accomplish this goal is through a proven process called Sourcing Relationship Management (SRM). Research indicates that organizations t ypically have healthier, longer lasting and higher value producing outsourcing and/or shared service center relationships when these relationships are aligned around the “five domains� of value: financial performance; service quality; capabilities; risk/compliance; and governance. In many cases, overall improvement can range from 10% to 30% of the relationship’s annual contract value! TAKE A VALUE HEALTH CHECK IN 2011
In 2011, IAOP will expand the market availability and functionality of its popular sourcing relationship Value Health Check Survey (VHCS), enabling IAOP Corporate Members and Non-Members alike to quickly, affordably and painlessly take a “health-check� of their existing outsourcing and/or shared service center relationships. Similar to a periodic medical health check-up, the VHCS provides both buyers and service providers with rapid insights into the vitals signs of health and value delivered in their sourcing relationships.
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VALUE HEALTH CHECK
IAOP Corporate Customer and Service Provider Members receive two complimentary VHCS per year. Non-Members of IAOP can take a sourcing relationship health check using the VHCS for a nominal fee. HOW DOES THE VHCS WORK?
The VHCS is a a cloud-based sed sourcing relationship ol platformed on software management (SRM) diagnostic tool provided by Enlighta, Inc. The VHCS can be used in any type of outsourcing (e.g., ITO, BPO, and KPO) onship. or shared service center relationship. Each organization (buyer and service ministrator provider) identifies a VHCS Administrator within their organization who leads their lationship health participants in performing the relationship check. Participants complete the web-based survey by nt nt prioritizing and then scoring their level of agreement with 40 value statements across thee five key domains s, as represented of value in sourcing relationships, in the Sourcing Relationship Valuee Framework. ely an hour to c o m p l e t e , The VHCS takes approximately ailable immediately to survey with individual survey results available participants upon completion. The entire relationship health weeks check process can be completed in a matter of a few weeks, whereas traditional methods of relationship sourcing analysis can take months.
WHAT HEALTH CHECKS ARE TEACHING US
Over the past year, over 40 organizations around the world have used the VHCS to per perform periodic health checks on their existing sourcing relationship relationships. In every case, both buyers and providers have identified areas ffor improving the overall health and potential business value obtain obtainable in their relationships. Summary of key overall findings in 2010 2 from the VHCS include: Overall Results: The Financial Performance of sourcing relationships remains the top overall domain of interest by both buyers and service providers, followed by governance, capabilities, service quality and risk/compliance. Fin Financial Performance: Whereas service prov providers believe that they are generally coop cooperative with cost reduction initiatives, buyer aren’t as convinced and more than 50% buyers don’t b believe that their outsourcing relationships are delivering on th the original business case for the relationship. Governance: Buyers Buyer overwhelmingly believe that their service provider governanc governance processes are clear and effective, whereas the majority of service providers believe that buyers have significant room for improvement in clarity and effectiveness when buyers manage their own internal governance teams.
THE TYPICAL RESULTS OF A HEALTH-CHECK
A few days following closure of the VHCS response period, buyer and service provider VHCS Administrators each receive a 30+ page VHCS Report containing a wealth of data, information and participant comments from the survey. Color mapping of buyer/ service provider team and individual data along with the use of graphs and charts make interpretation of VHCS relationship health check results easy. For example, the use of the VHCS Value Opportunity Matrix (VOM) helps to quickly identify areas for further review in a relationship. In the above VOM, the buyer and service provider are clearly not aligned concerning their agreement with value statements 2, 4 and 5. As the VHCS administrators from the buyer and service provider work with their respective teams to interpret the results, they’ll document their internal findings and prepare for a join debriefing between the buyer and service provider organizations. In the joint de-briefing, both organizations share their perspectives and collaborate to identify how to improve their alignment on the priorities in the relationship and identify opportunities to improve the health and business value derived from the relationship. A documented “Action Plan” is put into motion as a result. The organization mark their calendars next year when they’ll perform their next annual relationship healthcheck using the VHCS.
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VALUE HEALTH CHECK
Capabilities: There is consensus from buyers that they want greater innovation and creativity from their service providers. Service Providers generally believe that they’re providing their customers with the contracted level of capabilities and are well positioned to provide more. Service Quality: Service providers appear to be meeting buyers expectations in terms of service level performance. However, buyers are expecting greater transparency into their relationships as they continue to expand outsourcing on a global basis and with multiple service providers. Continuous improvement is an area of focus by buyers supporting their desire for greater innovation from their service provider (see capabilities above) Risk/Compliance: Both buyers and service providers find overall risk and compliance an area of strength in their relationships. There is growing concern over implications of regulatory changes and the implications of new outsourcing platforms (e.g., Cloud Computing, BPaaS, etc.). On a quarterly basis in 2011, Globalization Today magazine will continue to publish key insights and best practices from outsourcing buyers and service providers’ use of the VHCS. WHAT’S NEW WITH VHCS IN 2011?
Based on accelerated use of the VHCS by IAOP Members and Non-Members worldwide, we expect to be able to provide VHCS users with peer-group scoring beginning in Q2 of 2010. Initially, peer group scores will be based on the following sourcing relationship parameters: industry (financial services, ABOUT THE AUTHOR
Matt Shocklee assists organizations world-wide as they develop, implement and optimize their global sourcing strategies and relationships. He’s currently the President and CEO of Global Sourcing Optimization Services (GSOS). Matt also serves as the Global Ambassador for the International Association of Outsourcing Professionals (IAOP); Chairman of the IAOP’s Outsourcing Tools & Technology Innovation Chapter; and Co-Chairman of the IAOP Midwest Chapter. He is a Certified Outsourcing Professional (COP). Matt is the author of the Sourcing Relationship Value Framework and the Value Health Check Survey (VHCS). He is a frequent speaker on Sourcing Relationship Management (SRM). You can reach him at: mattshocklee@gsos.org
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healthcare, legal, etc.); scope of relationship (contact/call center, F&A BPO, ITO-ADM, etc.); term of the relationship; average range of annual spend; and sourcing destination (i.e., country/ region). Through peer group scores, buyers and providers will be able to understand how their sourcing relationships stack up against similar relationships around the globe. Also in 2011, the VHCS will be made generally available to all regions of the world, with customized value statements based on the unique characteristics of the sourcing region involved. The ability to customize the VHCS to buyer and service providers’ specific needs also is now generally available. VHCS PROCESS AT-A-GLANCE Here’s how it works:
1. VHCS Administrators from the buyer and service provider organizations enter demographic information into the online VHCS system on each outsourcing or shared service center relationship, enabling peer group scoring & trend analysis. 2. Customers and service providers prioritize and score their level of agreement with a series of value statements across each of the five domains of business value. 3. Participants’ comments are encouraged and collected at each value statement. 4. Participants get immediate feedback on their overall VHCS score. 5. Once all participants complete their survey, a VHCS Basic Report is provided consisting of 30+ pages of detailed data/ information and analysis, comparing responses from buyer and service provider. 6. Buyers and service providers independently interpret VHCS results and collaborate on identified areas, to improve overall health and value obtained in the relationship. 7. Optional VHCS Debriefing Assistance is available for a nominal fee to assist buyers and service providers in interpreting and using the VHCS Basic Report data/ information. Additional analytical tools are used as well as facilitation of all internal and joint de-briefings. This optional, fee-based assistance is commonly used on the buyer and service provider’s first time using the VHCS. Fees are typically split between the parties. By adhering to the precepts of Sourcing Relationship Management, you can substantially improve the quality and business potential of your outsourcing relationships, for 2011 and beyond.
VALUE HEALTH CHECK
Capabilities: There is consensus from buyers that they want greater innovation and creativity from their service providers. Service Providers generally believe that they’re providing their customers with the contracted level of capabilities and are well positioned to provide more. Service Quality: Service providers appear to be meeting buyers expectations in terms of service level performance. However, buyers are expecting greater transparency into their relationships as they continue to expand outsourcing on a global basis and with multiple service providers. Continuous improvement is an area of focus by buyers supporting their desire for greater innovation from their service provider (see capabilities above) Risk/Compliance: Both buyers and service providers find overall risk and compliance an area of strength in their relationships. There is growing concern over implications of regulatory changes and the implications of new outsourcing platforms (e.g., Cloud Computing, BPaaS, etc.). On a quarterly basis in 2011, Globalization Today magazine will continue to publish key insights and best practices from outsourcing buyers and service providers’ use of the VHCS. WHAT’S NEW WITH VHCS IN 2011?
Based on accelerated use of the VHCS by IAOP Members and Non-Members worldwide, we expect to be able to provide VHCS users with peer-group scoring beginning in Q2 of 2010. Initially, peer group scores will be based on the following sourcing relationship parameters: industry (financial services, ABOUT THE AUTHOR
Matt Shocklee assists organizations world-wide as they develop, implement and optimize their global sourcing strategies and relationships. He’s currently the President and CEO of Global Sourcing Optimization Services (GSOS). Matt also serves as the Global Ambassador for the International Association of Outsourcing Professionals (IAOP); Chairman of the IAOP’s Outsourcing Tools & Technology Innovation Chapter; and Co-Chairman of the IAOP Midwest Chapter. He is a Certified Outsourcing Professional (COP). Matt is the author of the Sourcing Relationship Value Framework and the Value Health Check Survey (VHCS). He is a frequent speaker on Sourcing Relationship Management (SRM). You can reach him at: mattshocklee@gsos.org
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healthcare, legal, etc.); scope of relationship (contact/call center, F&A BPO, ITO-ADM, etc.); term of the relationship; average range of annual spend; and sourcing destination (i.e., country/ region). Through peer group scores, buyers and providers will be able to understand how their sourcing relationships stack up against similar relationships around the globe. Also in 2011, the VHCS will be made generally available to all regions of the world, with customized value statements based on the unique characteristics of the sourcing region involved. The ability to customize the VHCS to buyer and service providers’ specific needs also is now generally available. VHCS PROCESS AT-A-GLANCE Here’s how it works:
1. VHCS Administrators from the buyer and service provider organizations enter demographic information into the online VHCS system on each outsourcing or shared service center relationship, enabling peer group scoring & trend analysis. 2. Customers and service providers prioritize and score their level of agreement with a series of value statements across each of the five domains of business value. 3. Participants’ comments are encouraged and collected at each value statement. 4. Participants get immediate feedback on their overall VHCS score. 5. Once all participants complete their survey, a VHCS Basic Report is provided consisting of 30+ pages of detailed data/ information and analysis, comparing responses from buyer and service provider. 6. Buyers and service providers independently interpret VHCS results and collaborate on identified areas, to improve overall health and value obtained in the relationship. 7. Optional VHCS Debriefing Assistance is available for a nominal fee to assist buyers and service providers in interpreting and using the VHCS Basic Report data/ information. Additional analytical tools are used as well as facilitation of all internal and joint de-briefings. This optional, fee-based assistance is commonly used on the buyer and service provider’s first time using the VHCS. Fees are typically split between the parties. By adhering to the precepts of Sourcing Relationship Management, you can substantially improve the quality and business potential of your outsourcing relationships, for 2011 and beyond.
THOUGHT LEADER
CLOUDS AND VISIBILITY: TWIN PATHS FOR IT OUTSOURCING IN 2011 By Nipun Sehgal
Two ostensibly opposing themes will actually converge in 2011. Our author explains. As I attempt to determine the major Information Technology (IT) outsourcing trends of 2011, two key themes jump out at me: “Cloud” and “Visibility”. At first blush, these terms convey opposite connotations. Cloud has a blackbox feel about it, where good things are magically delivered from somewhere far-far-away. Visibility, on the other hand, is about knowing exactly what is occurring and possessing up-to-date and detailed information, to help assess performance and make decisions. However, as I explain below, these two themes are in fact intertwined and complementary. With this context in mind, here are the major IT outsourcing trends that I envision unfolding in the coming year: CLOUD PROVIDERS WILL FACE SUNNY SKIES
Not surprisingly, 2011 will be yet another year of the Cloud (as was 2010), with Cloud-based applications delivery leading the charge. Cloud adoption will accelerate in enterprises of all sizes, with Cloud solutions adopted across every aspect of the business. Suppliers such as Workday, Google (with Google Apps), Salesforce.com, and Taleo will continue to make gains, but at the same time prime the pump for niche providers. Leading IT infrastructure and software companies will acquire niche players to plug gaps in their Software as a Service (SaaS) offerings. Furthermore, Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) offerings will increasingly converge, with one-stopshop providers delivering an array of offerings. Systems Integrators will see significant new opportunities in helping organizations combine and integrate Cloud solutions with internal applications and systems, within the overall IT solutions umbrella. ORGANIZATIONS WILL TAKE STEPS TO DEAL WITH MULTIPLE CLOUDS
Cloud computing with all its variants will increasingly be considered an essential element of the outsourcing mix. With multiple clouds, the need for procuring, managing, integrating, governing and billing will drive the emergence and adoption of a new breed of cloud management solutions. Businesses will no longer view the Cloud as an experiment. They will adopt the required diligence and discipline and make the necessary investments in governance and management tools, to ensure the effective performance of Cloud-based resources that support their critical business processes. FACT AND DATA BASED OUTSOURCING DECISIONS WILL BECOME THE NORM
been based on tactical needs, executive level relationships with providers, and perceptions of supplier know-how and performance. This is changing, and we see clear signs that 2011 will be the year in which facts-based outsourcing decisions will play a key role in most enterprises for major contract renewals and new engagements. Although “soft” qualities such as trust and familiarity will continue to factor into outsourcing selection and decisions, the balance will be tipped by gaining visibility to the hard facts related to all aspects of the outsourcing lifecycle, from planning to operations governance and performance assessment. Several factors are expediting this change in orientation, including availability of tools (often cloud-based) for outsourcing management; increased adoption of benchmarking methodologies (such as IAOP’s VHCS) that enable benchmarking of strategic relationships; the growing importance of the vendor or sourcing management office within businesses; and the increased focus on measuring outsourcing value in terms of innovation and productivity. NICHE OUTSOURCING WILL CONTINUE TO EXPAND
Think of this trend as “Clouds: Part Deux”. This year will witness the emergence of new and innovative areas in niche outsourcing, whereby providers use Cloud solutions to offer highly specialized outsourced services. For example, content publishers (books, articles, and video) are increasingly outsourcing the monitoring of copyright violations and takedown actions to specialized service providers such as Attributor. Other more traditional examples of niche outsourcing are medical transcription services, legal outsourcing, and staffing and research services. Expect to see a continued acceleration of Cloud-powered specialist outsourced services. INTEGRATION WILL BECOME THE NAME OF THE GAME
The cry from more and more parties will be: Integration, or bust. Large, pure-play Business Process Outsourcing (BPO) providers will lag in growth compared to the large integrated providers that offer Information Technology Outsourcing (ITO), BPO and Knowledge Process Outsourcing (KPO) services. As 2010 came to a close, the BPO capabilities (for non-niche business services) of traditional ITO players more or less caught up with the large specialized BPO players. In major deals where outsourcing of business processes often includes IT transformation requirements as well as outsourcing of supporting applications and infrastructure, the pure play BPO providers will not be able to compete with the integrated global providers. Furthermore, providers that are able to offer bundled services that include management and governance tools that are enabled with best-practice processes will stand out. Service integration and mega outsourcing deals is what will fuel the hunger of these large integrated outsourcing entities.
ABOUT THE AUTHOR
Nipun Sehgal is the Founder & CEO of Enlighta, a provider of solutions for outsourcing governance. He also is an Executive Advisory Member of the IAOP’s Outsourcing Tools & Technology Innovation and Global Technology Industry chapters. You can reach him at nipun@enlighta.com.
During the last couple of decades, most outsourcing decisions largely have
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THOUGHT LEADER
GLOBALIZATION: THE “INVISIBLE HAND� OF PROGRESS By John Persinos
North America $16.4 bn
Because of global consolidation and outsourcing, the aviation maintenance in terms of capital productivity. A seasoned expert in the aviation industry explains why. Greed is good. During the go-go Eighties, the infamous financier Ivan Boesky imparted that inspirational homily in a speech to college kids. Boesky’s sentiment (echoed by his cinematic alter ego, Gordon Gekko) comes to mind whenever I ponder the rapid pace of globalization in the aviation sector. The aviation industry, particularly the Maintenance, Repair and Overhaul (MRO) sector, is in the midst of unprecedented consolidation in all regions of the globe. Driving these mergers and acquisitions is the need for increased operational efficiencies, lower labor costs – and yes, greater profits. You can expect these themes to be covered in depth at IAOP’s 14th annual “2011 Outsourcing World Summit�, February 21-23, at the Renaissance Esmeralda, in Indian Wells, California (see program guide, page xx). The summit will entail five educational tracks and more than 30 “how-to� sessions. The Big Three costs in aviation are fuel, labor and maintenance, in that order. During the recent recession, MRO was an easy — but myopic — target of cost cutting for beleaguered aircraft operators. Now, as the global economy recovers, the need to tackle deferred maintenance combined with greater airline activity is boosting the MRO sector’s bottom line and morale. The numbers tell the story. The chart on page xx shows how various regions of the world stack up, in terms of MRO revenue. North America represents the biggest piece of the pie at $16.4 billion, followed by Europe at $12.7 billion a year. The pressure on aviation companies to eliminate bureaucratic redundancies and shift operations to lower-cost sources overseas has never been more intense. Global corporate parents, goaded by impatient shareholders, are unrelenting in their demands that local operating units get “lean and mean�. The toll can be high, in terms of layoffs and wrenching personnel dislocations. But remember: corporate pain equals opportunity. MRO managers are pinpointing inefficiencies and creating innovative, customized systems that remedy them. In other words, the selfish profit motive – what Adam Smith called the “invisible hand� – translates into MRO solutions that improve the overall quality of aviation. Probably the most salient example to date of an integrated
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Latin & Soutth Amercia $22.33 bn
maintenance solution on a grand scale is Boeing’s GoldCare offering for its 787, as well as the Chicago-based giant’s purchase of Aviall, the industry’s largest independent aftermarket parts distributor. To be sure, Boeing’s role in GoldCare is more akin to that of a program manager and expediter. However, through its absorption of Aviall, Boeing gleans a strategically valuable location in the supply chain at a time when new large maintenance contracts tend to be multiyear package deals that include support and management for spare parts. Boeing encountered a rocky time, through the outsourcing of work on its Dreamliner 787. This commercial airliner is a “game changer�, in that it represents state-of-the-art technology in the cockpit and a composite-built airframe, making it more fuel efficient and easier to maintain. Problem is, Boeing outsourced too much of the work to secondparty suppliers and manufacturers who couldn’t handle the work in an efficient and reliable manner. Boeing’s supply chain became too attenuated; deadlines were missed and certain workmanship was shoddy.
THOUGHT LEADER
Europe $12.7 bn
Russia & CIS $687m
Chin ina $2.77 bn
Africa $1.4 bn
Middle East $2.6 bn
The result has been chronic delays in deliveries of the Dreamliner, a great embarrassment to the giant aircraft manufacturer that threatens to result in canceled orders and billions of dollars in lost sales. Nonetheless, Boeing has learned valuable lessons from its painful experience. The company now is outsourcing less of the complex work and retaining the “value-added” aspects for its own skilled workforce in Seattle. It’s also vetting future suppliers and contractors in a more thorough fashion, to make sure they’re reliable before outsourcing to them. It’s a lesson that other companies should heed. BOOM TIMES FOR THIRD PARTIES
The United States continues to represent the largest MRO market, but until recently it was mostly cordoned off to third-party suppliers. No longer. Airlines are cutting back on their MRO expenditures by outsourcing, which is creating boom times for third-party entities. Meanwhile, torrid aviation growth in India and China has made these countries powerful magnets for MRO work. According to the consultancy AeroStrategy, based in Ann Arbor, Michigan, the combined
APAC $5.99 bn
Chinese and Indian MRO markets will be worth $4.8 billion, or about a third of the entire $14.5 billion Asia/Pacific MRO market, by 2015. Because of global consolidation, the MRO supply chain is 40 percent more efficient in terms of capital productivity, said Kevin Michaels, principal and co-founder of AeroStrategy, an aerospace consultancy based in Ann Arbor, Michigan. Michaels said that the pitiless drive for higher margins is whipping the MRO sector into fitter, more muscular shape. “I think it means that operators have done a good job at improving the productivity of their inventory,” he said. “It leads to more savings throughout the supply chain.” Raymond Jaworowski, senior aerospace analyst for Forecast International, a consultancy based in Newtown, Connecticut, asserted that increasing globalization and the pursuit of higher corporate profits is driving the booming demand for business jets. That’s because executives must travel more often to more far-flung regions, to oversee their expanding business empires, which in turn are outsourcing on an increasing basis to remote developing countries.
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PROTECTING SAFETY
I also chatted with Richard Aboulafia, senior vice president of analysis, the Teal Group, an aerospace consultancy in Fairfax, Virginia. We discussed concerns over the outsourcing of aircraft maintenance to foreign repair shops, and the related gaps in the FAA’s supervision of both safety and security practices. I asked Richard whether the increasing reliance on outsourcing adversely affects air safety. I also asked him whether increasing globalization of MRO facilities undermines safety and readiness. As more and more outfits merge, MROs are reaping economies of scale. But how does this trend affect quality of work? Richard pointed out that there’s a difference between delegating the MRO work, and simply sloughing off all responsibility. He said the
ABOUT THE AUTHOR
John Persinos is our magazine’s Editorial Director. He also serves as Editor-in-Chief of Aviation Maintenance magazine and Online Publisher for Aerospace & Security Media. You can reach him at: 301-385-7211, or john. persinos@globalizationtoday.com. You can read the latest issue of Aviation Maintenance magazine here: http://www.avmain-mag.com
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outsourcing of maintenance is an inevitable trend that won’t slow down and that outsourcing is not inherently unsafe. What makes the difference, he said, is whether “the work is properly supervised� and strict criteria are established and followed. He said customers have a responsibility to make sure standards are being followed. Richard also emphasized the importance of good customer service and rapid turnaround of repairs, as well as the timely provision of spare parts. “When the OEMs take too long to provide a spare part or if their customer service is unresponsive, they leave themselves open to competition from the PMA suppliers, who rush in to fill the gap,� he said. To be sure, a major factor driving growth in the Asian aerospace market is accelerating consolidation of MRO work. Asia is increasingly an MRO center and many OEMs have a presence there. This region of the world can provide quick MRO turnaround times. Case in point: Rolls-Royce recently forged an agreement with Singapore Airlines to supply the latest version of its Trent engine series for a new fleet of 20 Airbus A350 XWB twinjets. The business, involving Trent XWB engines, is worth $800 million. In the MRO sector, the drive for greater efficiencies and profits all adds up to one thing: the big fish are getting bigger, and the smaller ones are getting eaten up. By choosing to swim with these sharks instead of resisting them, MRO managers can actually improve the quality of their work.
GlobalizationToday &
THOUGHT LEADER
WHEN FUND MANAGEMENT ANALYSTS GET OUTSIDE HELP By Mark Wiggins
The Case for Outsourcing Secondary Research The survival of investment management firms hinges upon the strong performance of the fund products in their portfolio. In today’s global economic climate, Asset Management firms are looking to spread the risk and at the same time receive top marks from independent ratings agencies for delivering above-average returns to their clients. Set against a background of market volatility and increasing regulatory scrutiny, successful investment management companies are those that can consistently make the shrewdest bets on equities, property, bonds and alternative products. THE TRADITIONAL RESOURCES
FORMULA:
INVESTING
IN
INTERNAL
The quintessential dilemma confronting research desks in investment management firms is to balance the surfeit of information with sufficient analysis. Equity research, which is company-specific, can never claim to be an end in itself. Changing times require a sharper focus and analysis around areas such as supply chain efficiency, market dynamics, risk governance, government regulation, customer satisfaction and loyalty, corporate and social responsibility, and diversity policies. The traditional focus on quantitative data focused on companies needs to be blended with qualitative analysis on industries, governments and countries. From an external context, it is absolutely essential that there is a thorough and accurate assessment of the ever-rising ocean of data – that of markets, competition, threats and opportunities. What most firms lack is the ability to filter, cross-reference and analyze this sea of knowledge. An investment management firm has to take a 360 degree view of the ramifications of new technology, the Internet’s potential for disruption and disintermediation, shorter time-to-market cycles, threats from both consolidation and new entrants, globalization and outsourcing. Firstmover advantage by investment managers is important for minimizing risk and maximizing potential return. More than ever before, it is knowledge available at the desktop, which can be the key differentiator to complement the largely recycled conventional wisdom of industry experts on the airwaves. For example, online reputation monitoring
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(sentiment analysis) is emerging as an important early warning indicator of whether a market, entity or government is moving in the right direction. The fastgrowing universe of secondary research can complement other forms of intelligence on the viability of publicly listed companies, markets, governments and property markets. Internally, these firms make daily fund decisions on the appropriate mix of equities, fixed income and alternative investments in their portfolio. Most asset management firms are paranoid, and rightly so, about what is being said about their company, products, funds and performance in the public domain. Here again, the secondary research desk inside investment management firms can systematically capture this knowledge and positively impact the marketing and communication strategies of their brand. ALIGNING WITH THE SHIFTING PARADIGM
After the pummeling of recent years, the impending upturn will be viewed with caution. Investment management companies that culled their analyst layers in the recession will tend to re-build at a slower rate than the markets they survey. Research analysts who held their jobs in the downturn will be in high demand as the market rebounds – in fact, this is traditionally not just limited to the poaching of star analysts but extends to the hiring of entire fund teams from rival firms! With transparency becoming the new world order, investment management firms need to look for strategic alternatives to stay competitive and compliant. More rigorous and structured competitor benchmarking will be vital. Clearly, these firms must look at smarter ways of managing their knowledge assets as they seek to accelerate their response to market changes. They must retain their flexibility, enhance analyst-to-coverage ratio, and yet ensure that there is no impact on the quality and depth of research that underpins decision-making. And, of course, all this must be done cost-effectively. Examples of secondary research support elements are: Demand-side secondary research
Consumer surveys, busin
Supply-side secondary research
Company news and finan economic and demograp
Qualitative market analysis
Business models and tren landscape, profiles of key
Quantitative market analysis
Market sizing, segmentat analisys and forecasts by
THOUGHT LEADER
OUTSOURCING – ANALYZING FOR THE FUND MANAGEMENT ANALYST
Outsourcing investment research activities to multi-skilled professionals, capable of generating insights on all elements at play in the market, has emerged as a smart alternative to meeting the challenges faced by investment management firms. Highly educated teams of desktop researchers help monitor trends, opportunities, threats, market-shifts and competitive moves. More importantly, they draw out implications for an investment management firm’s strategic direction, product portfolio, brand and evolution. The benefits that an outsourced secondary research function can provide to an investment management firm include: t Providing a hub to cross-reference, contextualize and make recommendations derived from company-specific research (equity research), syndicated market research (for example, Gartner Group), licensed data sets (for example, Hoovers, Factiva) and online business intelligence. t Providing information on niche or emerging markets, which generally lack syndicated research coverage. t Investment firms need better prospect intelligence. For example, which investor market segments match their product portfolio sweet spots. Immediate analysis is often needed on whether merger and acquisition opportunities align with internally developed buying criteria. An outsourced provider could be the perfect partner to dive into the depths of data at sundown and surface with relevant analysis by sunrise. t Secondary research is also paramount for analyzing the information on a company from every spoke connecting to the hub. This implies analyzing the industry-specific information alongside company-specific. It is also rare that a single data source is robust enough to be accepted at face value. Secondary research enables sanity checking of a constellation of assumptions and forecasts to empower decision-making. Such analysis can add a valuable
ness leader surveys, case studies and reference customer
ncials, technology and product specifications, government data, phic data
nds, technology issues, policy and regulatory factors, competitive y players
tion by technology, geography and application, market share segment
dimension to better second-guessing the market in the ongoing contest between a company’s ‘expected earnings’ versus ‘analyst estimates’. William Shakespeare once asked, ‘What’s in a name?’ The answer for investment management firms is ‘everything’. If the latest Wall Street movie is titled ‘Money Never Sleeps’, the same is true for the exponentially growing universe of data, which underpins critical external and internal decisions for an investment management firm. And herein lies the potential for these firms to stay ahead of competition by partnering with a third-party provider who can bring the advantages of cost, scale and expertise to analyze that universe! ABOUT THE AUTHOR
Mark Wiggins is an Australian who has worked in business development roles since the age of 15. Educated at the University of Melbourne, he hitch-hiked around the world prior to joining London-based ICT advisory firm Ovum, now part of Informa Plc, for a decade as Global Sales Manager, MD, Asia Pacific and CEO, North America. Mark subsequently held senior roles for innovative research advisory, analytics and consulting firms specialising in Enterprise Application Software, online competitor intelligence, Knowledge Process Outsourcing, Email Marketing Analytics and operational performance improvement. Mark is currently Senior Vice President, Research and Analytics for WNS Global Services in Europe - www.wns.com ABOUT THE COMPANY
WNS Global Services A leading global business process outsourcing company WNS is a leading global business process outsourcing company (BPO). Deep industry and business process knowledge, a partnership approach, comprehensive service offerings and a proven track record enable WNS to deliver business value to many of the world’s leading companies. We are passionate about building a market leading company valued by our clients, employees, business partners, investors and communities. Our homepage is www.wns.com
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WHAT’S HAPPENING AT THE IAOP WELCOME NEW IAOP MEMBERS
CLIMB THE SUMMIT! Below are the many ways for you to become a thought leader in the world of outsourcing.
IAOP is pleased to welcome new and renewing corporate and professional members from: Accenture; Archstone Consulting; Avasense; Aviva; Bancolombia; BBEST; Best Buy Company; Bleum Inc.; Blue Cross/ Blue Shield of Florida; Boston Scientific; CAI; Capgemini Consulting; Cassidy Turley; CB Richard Ellis; Cienet International, LLC; Colliers Turley Martin Tucker; Compassion International; Conseco; Covidien; CSC; Customized Improvement Strategies LLC; Danske Bank; Data Control Group Inc.; Dell Services; Deloitte; Diebold; Duke University; eBags; Entergy Services, Inc; Express Scripts; Fasken Martineau DuMoulin LLP; Firstsource; Fiserv; Genmab; Genpact; GlaxoSmithKline; Grundfos Management A/S; hiSoft Technology International Limited; IBM Corporation; Intel; Intuit; KPMG; Kraft Foods; Lindenwood University; Marsh; Mayer Brown LLP; McKesson Corp.; Morrison & Foerster LLP; NCS Pte Ltd; Novartis Pharmaceuticals Corporation; Oce Business Services; Oracle; Orange Business Services; Pillsbury Winthrop Shaw Pittman LLP; Practical Logic Pty Ltd; Proctor & Gamble; Prudential; PT Outsource Indonesia; PwC; Quint Wellington Redwood; ResourcePro; Salmat; SAP AG; sbe pvt ltd; Schneider Electric; Service Corporation Intl.; smc hartmann; State Farm Insurance; State Street; Steve Handel LLC; The MITRE Corp; TransUnion Interactive; UBS; UnitedLex; Vantage Partners; Wipro Technologies and Zurich Financial Services. For information on IAOP membership, e-mail sales@iaop.org.
RECENT IAOP ANNOUNCEMENTS
IAOP EVALUATING GLOBAL OUTSOURCING 100 APPLICATIONS Initial List of Top Ranked Companies to be Released in February
An eight-member evaluation panel of recognized industry leaders is now evaluating applications from outsourcing service providers and advisors for the 2011 Global Outsourcing 100Ž annual rankings. The independent judges will use a rigorous and objective process to rank applications of the top providers for the sixth annual Global Outsourcing 100Ž and advisors for the third World’s Best Outsourcing Advisors listing. The panelists have extensive experience in selecting companies
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Today January 2011
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.
based on requests for proposals (RFPs). Many also hold the prestigious Certified Outsourcing Professional® (COP) certification, validating their outsourcing expertise. Compiled by the The International Association of Outsourcing Professionals® (IAOP®), the 2011 Global Outsourcing 100® Judging Panel is chaired by IAOP Chairman Michael Corbett and includes: t Jagdish Dalal, COP, president, JDalal Associates, LLC, managing director of thought leadership, IAOP t Teresa Harris, COP, global partner account manager, Eastman Kodak Company t William Hefley, Ph.D., CDP, COP, clinical associate professor, Katz Graduate School of Business and College of Business Administration, University of Pittsburgh, and Director, ITSqc, LLC t Kurt Kohorst, COP, vice president, director of service engineering, Liberty Mutual Agency Corporation t Vera Marques, IT regional director, Hoffman-La Roche – Latin America t Manish K. Sahai, COP, vice president, world service, American Express t Kristin H. Weitz Rammer, vice president-technology, MAXIMUS
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. For more detailed information, visit www.IAOP.org/MemberServices. CALENDAR OF EVENTS
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. IAOP members are members of the association, and not of a specific chapter, and are encouraged to participate in as many chapter meetings as they wish. Non-members are welcomed to attend any chapter meeting as IAOP’s guest to learn more about the association and its work. t
JAN 10
ATLANTA CHAPTER MEETING ON “OFFSHORE, ONSHORE, NEARSHORE, CAPTIVE OR OUTSOURCED…HOW DO YOU MAKE A FULLY INFORMED DECISION?”
t
JAN 12
GOVERNANCE CHAPTER WEBINAR ON “HOW GOVERNANCE CONTRIBUTES TO INNOVATION AND INCREASED VALUE”
t
JAN 12
TEXAS CHAPTER AND OUTSOURCING TOOLS & TECHNOLOGY INNOVATION CHAPTER MEETING ON “ADVANCED TOOLS & TECHNOLOGY RESHAPING THE GLOBAL OUTSOURCING INDUSTRY”
t
JAN 27
CHICAGO CHAPTER MEETING
t
FEB 2
NORDIC CHAPTER MEETING ON ‘USING BENCHMARKING STRATEGICALLY.”
To join and view a full listing of our current chapters, go to www.IAOP.org/Chapters.
The judges will look at such areas as revenue, customer outcomes, capabilities, relationship management approaches and management talent and experience as well as an optional bonus area where more details can be provided. The evaluation criteria is weighted to ensure that small to mid-size companies have as much of a chance to be selected as large, recognized names for both lists.
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WHAT’S HAPPENING AT THE IAOP
As it expanded its operations, Practical Logic Pty Ltd. in Sydney, Australia used the Global Outsourcing 100 to help select potential suppliers and channel partners in China who already had demonstrated their experience by providing references and testimonials during the application process, said Managing Director Dr. Philip Hadcroft. “IAOP’s Global Outsourcing 100 provided an excellent framework through which we could readily identify those companies that had shown a willingness to expose their credentials to objective scrutiny,� said Hadcroft. “Moreover, we were able to see the high-level results of that process, which gave us confidence that we were dealing with suitably qualified and competent organizations.� The unranked lists will be previewed at the 2011 Outsourcing World Summit, Feb. 21-23, 2011 at the Renaissance Esmeralda, Indian Wells, California, and fully released in May 2011. CONFERENCES & EVENTS THE 2011 OUTSOURCING WORLD SUMMIT EMBRACING CHANGE: HOW OUTSOURCING PROFESSIONALS LEAD THEIR COMPANIES TO SUCCESS IN THIS NEW OUTSOURCING LANDSCAPE
IAOPŽ 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, The Outsourcing World Summit has been recognized as the premier gathering place for outsourcing customers, providers and advisors from around the world. Keynotes: t Laura Unger, former acting chairman of the US Securities and Exchange Commission and commentator for PBS’ Nightly Business Report, on “The Global Financial System� t Sandy Ogg, Chief HR Officer, Unilever, on the “Role of Outsourcing in Business Transformation� t Michael F. Corbett, Chairman, IAOP, with the results of “IAOP’s Annual Member Survey� WELCOME ABOARD NEW SPONSORS!
Atlantic Canada Atlantique Fortune Custom Projects Janus Associates InvestGDA and Genpact.
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Key topics: Globalization, rural sourcing, corporate social responsibility (CSR), cloud computing, managing risk through sourcing strategy, knowledge process outsourcing (KPO) , today’s outsourcing tools & how-tos, vendor management, outsourcing as a procurement discipline, transition and governance, exploring new geographies & transboundary outsourcing, and government outsourcing. Join companies like: Accenture, Allstate Financial, AstraZeneca, Bank of America, Booz & Company, Cassidy Turley, CB Richard Ellis, Citi, Coca-Cola, Colliers International, Eastman Kodak Company, IBM, Johnson & Johnson, Kellogg, Kirkland & Ellis LLP, Kraft, Liberty Mutual Insurance, Mayer Brown, Microsoft, Morrison & Foerster LLP, Orange Business Services, PepsiCo, PETCO, PwC, Procter & Gamble, Quint Wellington Redwood, Rural Sourcing, SAP AG, Zensar Technologies, and more! Pre- and Post-Conference Workshops: t OPCF/Certified Outsourcing Professional Prep Class – an introduction to 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 To learn more about workshops visit, www.IAOP.org/Summit/ Workshops. For more information and to register, visit www.IAOP.org/ Summit ONLY A LIMITED NUMBER OF SPONSORSHIP OPPORTUNITIES ARE LEFT FOR THE 2011 OUTSOURCING WORLD SUMMITŽ!
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 IAOP’s Outsourcing World Summit directly demonstrates the commitment your firm has made to leadership and excellence in outsourcing. But, 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.
WHAT’S HAPPENING AT THE IAOP
CERTIFICATION & PROFESSIONAL DEVELOPMENT COP MASTER CLASS SCHEDULE
The 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. IAOP is actively registering now for the following classes: t JANUARY 19-21: HONG KONG – CONTACT WINNIE CHOW TODAY AT WINNIECHOW@HBC.HK TO REGISTER. t MARCH 7-10, 2011: PAUL J. RIZZO CONFERENCE CENTER, CHAPEL HILL, NC t JUNE 27-30, 2011: KINGBRIDGE CONFERENCE CENTRE, TORONTO, CANADA
Please visit www.iaop.org/training_calendar for a full list of classes and current discounts and specials. CORPORATE PROGRAMS
IAOP’s private master class calendar is filling up with Corporate Companies taking advantage of educating their employees inhouse! With the dramatic cost savings, there is no better time than now to use up your training budget. Host an in-house class for between 10 and 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 your account executive or email sales@iaop.org. OUTSOURCING GOVERNANCE WORKSHOP NOW ONLINE
IAOPs Certified Outsourcing Professional Online Master Class now has a new companion, the Online Outsourcing Governance Workshop! Don’t have the time to attend our on-site 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 Certified Outsourcing Professional (COP) designation, 6 points towards 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. 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: IAOP Certified Outsourcing Specialist™ in Human Resources (COS-HR) and Certified Outsourcing Specialist in Finance & Accounting (COS-F&A). Developed by IAOP’s Outsourcing Standards Board, as the certifying body, 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 against an approved set of standards. The IAOP 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 by IAOP under the IAOP’s Outsourcing Professional Certification Framework™ (OPCF) with a full range of certifications for individuals from entry-level to C-suite positions. The COS certification tests are available at www.IAOP-cos.com.
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YEAR IN REVIEW
2010: The Year in Pictures
In 2010, IAOP’s members and affiliates grew to more from 50 countries.
than 110,000 and came
28 meetings were Sixty-five chapter meetings were held around the world; more outsourcing nds thousa ng enabli ar, webin via held 37 and face- to-face professionals to attend. took place in the U.S., Certified Outsourcing Professional® Master Classes eds of outsourcing hundr with ia, Malays and Kong Canada, Italy, Hong In 2010, IAOP also ation. certific professionals either certified or on the road to workTM (OPCF) Frame ation Certific sional Profes rcing introduced the Outsou and several new certifications. rcing professionals The Outsourcing World Summit drew nearly 600 outsou from 35 countries. from regions including IAOP’s partners include organizations and associations Latin America. across and , Jordan China, India, d, Englan Russia, Denmark, of the world. part every nearly in IAOP launched Regional Advisory Boards growth and a ued contin to Here’s y. journe this in IAOP Thank you for joining successful 2011!
The IAOP Team
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 #
COMPANY NAME
URL
10, 11 16 0 2 22, 23 4, 18, 47
Accenture BCS Capgemini DATAMARK, Inc. Diebold International Association of Outsourcing Professionals (IAOP) KellyOCG Sencor WNS Global
www.accenture.com www.bcs.org/opportunity www.capgemini.com www.DATAMARK.net www.diebold.com www.IAOP.org
6, 19 30, 31 26, 27
www.kellyocg.com www.sencor.net www.wns.com