GT_June_July_2012 by Ali Comelek

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GlobalizationToday

GLOBAL OUTSOURCING 100 RANKINGS OF PROVIDERS AND ADVISORS. page 26

COMPLIMENTARY RESEARCH OBSERVATIONS FROM CHINA… HACKETT REASEARCH’S DETAILED TED WEYN’S DAILY OBSERVATIONS ANALYSIS PROJECTS SLOWDOWN. CHANGSHA CHINA. page 32

page 44

The Official Magazine of the International Association of Outsourcing Professionals

GlobalizationToday June-July 2012

Commerce Redefined

C-Suite Spotlight Thom Mead interviewed Anoop Sagoo of Accenture on “High Performance BPO”. Page 10

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INSIDE June - July 2012

5 PUBLISHER’S NOTE 6 NEWS FEED

What’s new and noteworthy in global commerce.

C-SUITE SPOTLIGHT

THOM MEAD INTERVIEWED ANOOP SAGOO, BPO CROSS OPERATING GROUP LEAD FOR ACCENTURE ON “HIGH PERFORMANCE BPO”.

42 TACKLING THE IT SKILLS GAP

John McGlinchey, Vice President Sales & marketing for EMEA, CompTIA reports on the need for better skills management

By John McGlinchey

44 OBSERVATIONS FROM CHINA… Daily Observations from the 2012 International Services Outsourcing Conference, Changsha China.

By Ted Weyn, Managing Partner – HCMWorks

48 IAOP WORLD CONNECTION 54 SCRAPBOOK

GO100

COMPLIMENTARY RESEARCH

RANKINGS OF PROVIDERS AND ADVISORS ARE VALUABLE INDUSTRY GUIDES

HACKETT REASEARCH’S DETAILED ANALYSIS

by Sandy Frinton, IAOP

By MichelJanssen, Erik Dorr and Martijn Geerling

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FOUNDER & PUBLISHER Ali Comelek ali.comelek@globalizationtoday.com

EDITORIAL and PRODUCTION

Get Listed in Globalization Today’s Buyer’s Guide All Globalization Today subscribers have complete access to our Buyer’s Guides that allow them to quickly find and purchase outsourcing and offshoring related products and services. Globalization Today offers a free basic listing to providers in the following categories: • Information Technology • Internet & Web • Consulting • Business Process • Human Resources • Art & Design • Medical & Billing • Printing & Publishing • Writing & Editing • Engineering & Architecture • Finance • Virtual Assistantship

Go to www.globalizationtoday.com to get your FREE listing!

EDITORIAL DIRECTOR Ali Comelek ali.comelek@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

Address: 6501 E. Greenway Pkwy., Ste 103-494 Scottsdale, AZ, 85254, USA Phone: 1-602-492-4194

PUBLISHER’S NOTE

Ali Comelek

Founder and Publisher

Remember What I Said Three Years Ago? Before I launched Globalization Today – our first issue was February 2010 – I said, “When it comes to globalization, who says an editor knows what is best”. This is one of the main pillars of the value offered by GT. Posing as an authority, and filtering what views can be printed in the magazine to conform to one person’s perspective is counter to the idea of globalization. That’s why during the launch of the magazine, and our website, we opened our doors to everyone in the field, pundits and practitioners alike, that has something to say and let you, the readers, decide what is “fit to print”. This approach quickly proved more appealing than we realized, and it generated tons of useful material the past 3 years. So much so that we needed a better, more comprehensive editorial

calendar to put some structure around what is being submitted, what is being printed and when it should appear. In response, we have recently expanded our editorial calendar with the learnings of the last three years and are working with you to address this challenge. Our current editorial calendar has rotating feature stories, a geographic focus, a capability focus and a one-to-one interview with a C-level executive every month to help you plan and organize what you want to submit. You can check our updated editorial calendar here (or on globalizationtoday.com). Going back to our vision at the launch, you will see the editorial calendar covers the bigger topic of globalization. While Outsourcing and Sourcing are big aspects of globalization, they are only two of the many and varied aspects of globalization. For example, Foreign Trade and Investment Opportunities in Emerging Markets, Mergers and Acquisitions, Legal and Regulatory hurdles all fit into the bigger idea of globalization but will fall outside of the scope if you are looking at this world with purely “outsourcing” glasses. I encourage you to check out the improved, and expanded editorial calendar and if would like to contribute in any form, let me know. As I said, you are the expert, not me. Founder and Publisher Globalization Today Magazine “Official Publication of IAOP” www.GlobalizationToday.com 1-602-492-4194

www.globalizationtoday.com

NEWS FEED

NEWS Feed

WHAT YOU NEED TO KNOW IN THE WORLD OF OUTSOURCING

AUSTRALIAN REGULATOR TO ASSESS INDIAN BANKING OUTSOURCING STANDARDS www.ibnlive.in.com

A team of Australian Prudential Regulation Authority (APRA) will visit India later this year to evaluate standards of Indian service providers amid their growing role in overseeing back office functions for the country’s largest four banks.A report quoted an APRA spokesman as saying that all new and existing outsourcing arrangements must adhere to Prudential Standard CPS 231, which came into force on July 1, and ensure that APRA has access to the offshore operations relevant to all Australian lenders. Regulated institutions must also provide unimpeded access to their overseas operations to APRA inspectors. According to the report by the Australian Financial Review, the team will assess the operations of companies that outsource for the financial services players, 6

GlobalizationToday June - July 2012

the Indian operations of other multinational IT suppliers, and the ring-fenced operations of Australian institutions, such as ANZ Banking Group. APRA’s team will fly out in the final quarter of 2012 under the leadership of the head of IT risk, David Pegrem. Commonwealth Bank of Australia technology chief Michael Harte said CBA had been involved in outsourcing and off-shoring activities for more than 14 years, and that APRA’s wish to monitor the situation on the ground should be applauded. CBA has outsourced work to companies operating out of India such as IBM, HCL Technologies, Tata Consultancy Services, HP and Accenture.

Harte said the emergence of cloud computing meant regulators need to broaden their definition and assessment of outsourcing arrangements. In cloud computing, end users are not required to buy software or devices as these are provided by service providers on a rental basis.”The fact that they are taking an active interest in seeing operations first hand is great and consistent with a sensible approach,” Harte said. “Cloud is another example of external provision that we are increasingly keen on because of the lower cost and greater flexibility, and regulators should be aware, as we are, of the solid risk assessments and the bona fides of suppliers,” he added.

NEWS FEED

BARACK OBAMA LAUNCHES ANTI-OFFSHORING TV ADS www.timesofindia.com

Some had predicted that the anti-offshoring campaign in the US would become more intense closer to the presidential elections in November. That’s indeed what’s happening. The Democrats under US president Barack Obama have just launched a 30-second TV campaign titled ‘Believes’, which talks about how Obama insourced jobs, while Republican rival Mitt Romney shipped them to low-wage countries during his tenure at Bain Capital. The narrator in the ad says Obama kept jobs in the US by saving the auto industry and gave tax breaks to companies that kept jobs there. The ad is currently being aired in nine states. The US Congress is also set to vote on a bill called the Bring Jobs Home Act, which will end tax breaks for firms that move jobs overseas and provide an incentive for those moving jobs back to the US by giving them a tax credit equal to 20% of the cost associated with bringing the jobs and business activity back to the US. The bill is sponsored by two Democratic lawmakers and supported by the largest federation of trade unions in the US. The US’s offshoring concerns relate both

to the manufacturing side, where the country has lost out to China in particular, and to the services side, where the Indian IT-BPO industry has been a big beneficiary. Phaneesh Murthy, CEO of iGate, says corporate America would react to the offshoring campaign in three ways: “Some enterprises will not bother about the campaign and will continue to outsource their requirements to India. Some will offshore, but will keep it quiet. And some will stop all offshoring till the elections are over.” Som Mittal, president of IT industry body Nasscom, dismisses the campaign saying such campaigns had been happening for many years. “They are mostly targeted at the opposition. We need not take much notice

of these things. Rather it is important for us to concentrate on how to be competitive in a tough, highly volatile economic scenario, how to improve customer relationships and how to enhance the quality of our deliverables.’’ Amneet Singh, VP at global outsourcing advisory Everest Group, says Indian companies are much more resilient today and don’t get swayed by such campaigns. But Indian companies have already been hit in some ways. In August 2010, the US government passed a bill that raised fees for H1-B and L1 visas by $2,000 to fund its Mexican border security costs for five years. This raised costs for Indian IT companies that use these visas to send employees to the US on work. www.globalizationtoday.com

NEWS FEED

ACCENTURE SELECTED BY JAPANS MINISTRY OF AGRICULTURE, FORESTRY AND FISHERIES TO SUPPORT FOOD SUPPLY CHAIN PROJECT www.globalservicesmedia.com

Project will develop guidelines for food suppliers to help improve preparedness for natural disasters and emergencies. The Ministry’s “Project for Measures to Improve Food Supply Capabilities in an Emergency” is to address the national priority of building an enhanced food supply chain network. Key objectives of the project are to encourage every food supplier, from producers to retailers, to develop business continuity plans and to strengthen collaboration networks for disaster and emergency response among food suppliers. Accenture will analyze the cases where the food supply

chain became dysfunctional in an emergency, such as during the Great East Japan Earthquake, and the cases where it functioned well due to cooperation among business partners. Following

the analysis, Accenture will propose guidelines for collaborative agreements among food suppliers aimed at maintaining business operations during disasters

and emergencies. Accenture will also hold meetings and workshops for food suppliers nationwide to disseminate the new guidelines and to support the development of advanced business continuity plans. “It is a great honor for Accenture to partner with the Ministry to establish a more stable food supply chain system for the good of nation,” said Joichi Ebihara, Accenture’s lead executive on the project. “The initiative will not just improve the resilience of Japan’s food supply chain, but help to strengthen the agility and competitiveness of suppliers, producers and retailers.”

OFCOM PROPOSES NEW PRICE CAPS FOR BT INFRASTRUCTURE USE www.sourcingfocus.com

Ofcom has proposed new caps to the charges that BT can bring for the use of its telecoms infrastructure by other communication providers.The propose cap would only allow for a reduction of between 0-6.5 percent for traditional interface technology and 8-16 see the expected price of including Vodafone, O2 and percent for newer telecom customer communication Plusnet all currently using BT lines. These new caps would charges fall, with companies infrastructure. 8

GlobalizationToday June - July 2012

NEWS FEED

SANDVIK ENTERS INTO A LONG-TERM AGREEMENT WITH IBM VALUED AT US$ 2 B www.globalservicesmedia.com

Sandvik has entered into a five year strategic agreement, to a value of 2B SEK, with the IT and consulting company IBM and will outsource parts of the IT infrastructure services. This is an important step towards strengthening the internal business solution for Sandvik IT and also a vital part in Sandvik’s ambition to be a globally integrated company. The services in scope for this agreement are ‘data center services’ and ‘workplace’. ‘Data center services’ includes the operation of all server platforms including hardware,

application platform software and facilities where servers are placed. ‘Workplace’ includes all services to manage Office PC’s as well as messaging, collaboration, standard applications and second line user support. All tasks within ‘workplace’ and ‘data center services’ will be performed by IBM. Under the terms of this agreement IBM will offer employment to Sandvik’s resources currently working in these areas. Sandvik aims to become a more fast-paced, global and customer focused company

with greater synergies within IT and other selected areas. This agreement will enable scalability and flexibility in cost, resources and competence for Sandvik. In the long term perspective this will provide an increased cost efficiency and quality of IT services and also secure access to the right skills and competence. “We are very satisfied to have entered this agreement with IBM and have high expectations on their ability to meet our demands”, says Goran Kordel, Chief Information Officer of Sandvik.

CAPGEMINI WINS FIVE-YEAR OUTSOURCING DEAL WITH BAYER www.computing.com

Capgemini has won a major application and infrastructure outsourcing deal with Bayer Business Services, the IT arm of the German chemicals and pharmaceuticals giant. The five-year deal will include the takeover of Bayer’s IT service centre in Mumbai, India. The contract includes global

application development and services, as well as infrastructure services, and will involve the transfer of about 550 employees. The win for Capgemini followed an intensive tender process against a range of Indian and global services companies. Capgemini will support some 120,000 users in Bayer Group globally with a team primarily based in India, but supported by local support in Germany, the US, Brazil and China. “We were looking for a strategic

partner for our IT service centre in Mumbai with a similar cultural fit and values. Capgemini had a convincing offer through its broad portfolio, its strong presence in Mumbai and its sustainable HR transformation solution,” said Daniel Hartert, CEO of Bayer Business Services. Capgemini is a €9.7bn revenue technology consulting and outsourcing company employing about 120,000 people in 40 countries. www.globalizationtoday.com

C-Suite Spotlight

C-SUITE SPOTLIGHT: Anoop Sagoo, BPO cross operating group lead for Accenture WE KICK-OFF THE C-SUITE SPOTLIGHT WITH AN INTERVIEW WITH ANOOP SAGOO OF ACCENTURE. OUR OWN THOM MEAD RECENTLY INTERVIEWED ANOOP AND DISCUSSED ACCENTURE’S RECENT STUDY ON WHAT IT TAKES TO ACHIEVE “HIGH PERFORMANCE BPO”. THE TRANSCRIPT OF THE INTERVIEW IS BELOW AND YOU MAY ALSO LISTEN TO THE PODCAST BY CLICKING THE PLAY BUTTON ON THIS PAGE. Thom: This is Thom Mead, Chief Executive

Officer of Globalization Today and joining me today is Anoop Sagoo of Accenture. He’s our featured executive in our interview series that we started in 2012 and we look forward to an exciting conversation with him about some recent research that they’ve done in the area of collaborative governance and the impact that it will have potentially on the market. So with that Anoop I’ll just jump into the questions real straight forward here. I understand that Accenture recently released a research report about the characteristics of high performance BPO. Can you give us a brief overview of what that research was and the intended purpose and some of the highlights of what you encountered?

Thom Mead

discuss this topic and our recent research. I’ve been with Accenture in and around the BPO space for about 20 years or so now working across industries and across functions. And what we have seen over the last 20 years as a business process outsourcing market has grown up in a significant change in the outcomes and intent behind going down the BPO route. In the early stage of the market maturity it was really around moving people to offshore locations and really focused around driving cost savings. And in today’s environment we see our clients that we work with looking for performance, performance outcomes that partially are driven by the services that are outsourced but they’re actually in truth driven by managing end to end business processes. And so we’ve seen a Anoop: Thanks Thom. I appreciate the time to significant shift in those expectations. As a 10

GlobalizationToday June - July 2012

C-Suite Spotlight

existing BPO clients within the market that really truly fit into what we would call the high performance category circa 20 percent. But it also more importantly outlined a number of characteristics that many of us who’ve been in and around the market space for awhile now will know and recognize, but really brought to the forefront those characteristics that you have to get right, and a direct correlation with those that do fit in the 20 percent high performance range. Some of those included things like focusing on end to end processes, making sure that you really focus on change management, really making sure that you defined the business outcomes beyond cost to drive the performance. And one of the age old items around governance which is a topic that has been much discussed in outsourcing engagements over many years Anoop Sagoo and a real need to make sure that you drive the right type of what we would call collaborative governance and partnership attitude between result of that we set out in conjunction with the provider and the customer. the Everest Group and their outsourcing unit within the London School of Economics to In high-performance BPO, a client sees really look at what in today’s environment what the provider as a strategic parner. does high performance BPO mean and how does it really drive business value and outcomes PROVIDER IS A STRATEGIC PARTNER for our clients. We surveyed a very broad group, it was circa 260 BPO users on behalf of Accenture that 85% were surveyed with a broad range of revenues from half a billion up to ten billion in size 41% in various stages of their evolutions of their journey. The research gave us a couple of things. First it concluded that actually when you look at the market today and you compare Typical BPO High-performance BPO the characteristics of what we believe is high performance versus the real performance Achieving High Performance in BPO,” Accenture, 2012 today, there’s a relatively small segment of www.globalizationtoday.com

C-Suite Spotlight

Thom: Okay, now collaborative governance

may seem like an intuitive term. How does Accenture define collaborative governance in the context of what you’ve discovered?

Senior leaders from both parties spend time to understand each others objectives and strategies

Anoop: I think this is a really good question because governance is to some extent one of these 75% almost amorphous topics that’s out there that can mean a lot of things. Sometimes people have interpreted governance to 33% mean meetings and a schedule full of interactions. And although that is the way that governance gets in many ways Typical BPO High-performance BPO executed, it’s really not about a tick box exercise. When we talk about collaborative governance what we really mean is making Achieving High Performance in BPO,” Accenture, 2012 sure that you’ve got the right attitude and partnership view and expectation alignment between provider and customer. And it also means that that partnership view is Thom: Okay. Now I myself have been a translated into behaviors and actions that practitioner in the industry for both parties take in order to materialize about 25 years and through the years that partnership view and in also making many companies have established a sure that you set up the governance system, collaborative governance as – it may a management system like the interlock, come under different terms but the like the performance management to really concept is core to their business and the line up for the behaviors and therefore the ideal state to which they aspire to work attitudes that you would expect between with their customers, yet few ever seem provider and customer. And it also means to get there. Any thoughts on why that that it’s not a onetime event. It’s something might be? that has to be constantly worked at by both parties in order to really make sure that Anoop: My only experience Thom, I think a lot of these things are successful. And in our business the most successful people have tended to mistake governance engagements that we have seen are the for this box ticking exercise I was ones where governance is one of the single referring to before. For example setting biggest priorities on both sides that is really up quarterly reviews, which is a classic used to constantly make sure that there is activity that takes place in a business expectation alignment on both sides and process outsourcing arrangement. And therefore we’re really delivering on the too many times instead of really making business results that were anticipated when sure that these are delivering values you the relationship was established. go through the process of sitting down 14

GlobalizationToday June - July 2012

C-Suite Spotlight

every quarter and just having a meeting. And I think that’s the defect that has existed whereas in order to make governance very effective what you really need to do is yes you need to do the sessions but as I said there needs to be a much broader view and expectation alignment between provider and customer. And governance isn’t just about having the meetings and it’s not just about you know an organization chart with boxes in it. Getting this right means you have to really make sure there’s parity between roles and responsibilities between both organizations because discontinuity between roles and responsibilities over a period of time can create significant disconnects in what you’re doing. So for example as a provider we often look to match our client’s organization structures and we push our clients to organize themselves you know in parallel with us because if we create roles that don’t match to what they’re doing you know there’s going to be people who are in management roles who actually don’t really quite understand what they do. And then you also have to look at taking that even a step further, you have to look at the people. You know, I spent a number of years working with one of our major clients in this space, Microsoft, where we really have taken the definition of collaborative governance really at the forefront of the success factor of the relationships. And if I look back at the things that we did to really make it work, we looked at the people, we looked at the social styles of the people on both sides to make sure that they matched. I mean we even got our joint leaders to share their personal objectives to make sure that they really understood the interests to underpin the way that both parties need to work. So that’s the type of thing that I’m referring to over and above, just setting up meetings which is what people would typically associate with governance. And there are also a number of things to making this work in the longer term which I’m sure we’ll come to but for me it’s really more than just those simple activities.

Thom: I found as well the other end of the

spectrum is people that just try to manage to SLAs and think as long as they’re doing that they’ve achieved governance. Now EquaTerra, which obviously was purchased by KPMG a while ago, stated in the past that when structuring outsourcing deals they estimated that 5 percent of the cost of the deal should be allocated to the cost of proper governance. And often the deals that had problems had under allocated in this area. In your research did you see any similar correlation and what recommendations would you have for both buyers and suppliers as they’re looking at the whole governance question and how big, how robust it should be or how austere it should be?

Anoop: On the sizing I’m not so sure that there

is a cookie cutter answer for the way that governance should be sized. It will vary by the maturity of your client. So for example if your client has a global business services organization often there is a governance lead that the client already has and so that will entail a certain type of governance and effort associated with it. If your client doesn’t have that type of a structure then there’s a lot more interaction directly with the individual businesses and that may entail a different type of governance. So our research absolutely concluded, and in fact 85 percent of the high performers saw governance in getting that right and making sure that they had a really strategic partner as being key. So www.globalizationtoday.com

C-Suite Spotlight there absolutely was a direct correlation between getting governance right and what we saw as high performance outcomes. The way that the governance needs to be designed inevitably is going to vary by client because it will vary by the client’s organization structure. And you know from our perspective what we seek to do is to sit down in an open and transparent fashion with our clients and design these things together. One common mistake that I have seen is too much of the cookie cutter approach which sometimes leads to people just getting into this view of “well, let’s just make sure we set up a quarterly review”. And I think this has all got to be constructed to be more than that because it’s a mistake when you sit there with a PowerPoint chart just agreeing that you’ve got to have a meeting once every three months. I don’t think that’s governance. So yes, I absolutely agree with the sentiment that it’s got to be right. I think it needs to be right size for the organization. We didn’t look at the cost space in our research, we definitely agree that it’s a key component of getting it right. And you know from my own practitioner experience I would see absolutely that in reality. Anoop: All right, now as we look at the global

still have to be built on certain building blocks like integrated performance management and the like and expectation management to make them work. So for me none of the capabilities are any different. It’s absolutely true that obviously when you’re designing something that’s got a solution operating model that has got remote working in it you have a little bit more hand offs. But I see that more as a sort of technical design factor and hygiene factor of who does what versus being critical to the model. Now one thing that we do in our business which you know we believe very strongly is we put our account managers with our clients. And for us regardless of the solution operating model that is absolutely an underpinning design factor because we want our people to be together. In fact actually when we can’t do that we encourage our clients to be with us. And there are several examples of our clients who have their leaders sitting physically in our facility so that the teams can be together. So you have to design it to suit the model, and you have to get the right interlock on a day to day level. Thom: Okay.

Now in a similar context the business model that’s gaining a lot of momentum is the use of home agents and virtualization of the work. What source of considerations does the Accenture feel needs to be considered to obtain a good governance structure in that type of model?

aspect of deals that are being done today, how does collaborative governance differ for domestic deal versus a near shore deal versus an off-shore deal given the linguistic challenges, cultural challenges, time differences and such? I think the capabilities are the same. So we would not see the need to design Anoop: To me this is all about the performance a different set of capabilities in order to system. I mean you mentioned service drive effective governance regardless of levels before and when we look at the the solution operating model. I mean design of an effective governance model you still have to have the right attitudes. and in fact it’s one of the other key Those attitudes still have to translate into principles that came out of our research certain behaviors and those behaviors in terms of making sure that you get end

GlobalizationToday June - July 2012

C-Suite Spotlight to end approach and part of that means putting Thom: That actually brings to mind another in place an integrated performance system. So question which is where do you see what’s important about that particularly in the compensation coming into play? Often example that you mentioned the home agency the suppliers, account manager is tasked is making sure the performance system is right with growing the revenue and the profit because all you actually need in order to really while the vendor manager for the client drive the performance – things like service levels is tasked with increasing productivity are very much command to control hygiene type and lowering the vendor spend. Is matrix. there not often an inherent conflict of They’re not necessarily the things that drive the interest? And I know in your earlier performance for the client. So what’s important comment you mentioned that when you when you’ve got that type of an operating model try to mirror the organizations, and part is the person that’s doing the work on the ground, of that I would think is having a mirror in this case a home, is taking actions and he’s to compensation so there’s a common driving things that support the whole performance incentive. system. So for example if you’re doing accounts payable invoice processing and it happens to be Anoop: You’re completely correct Thom. I mean we like to make sure that we’ve got a balanced someone that’s doing that at home, the person approach for this so the behaviors of the needs to make sure that the work that they are individuals on both sides are consistent doing fits into the overall performance system. with the overall intent of the engagement. So you might be looking at cost quality speeds And I think you have to be careful not to from a health check perspective but you need to get focused on one set of metrics versus the look at how it fits into the overall system and others. So in our business our measurement the business outcome that the client is expecting. of the equivalent of the account managers And in that case it’s about paying their suppliers is not only the financial performance of to the terms that they’ve agreed. So the trick for the engagement both on our side and the me is getting the performance system right and client’s business case, because often if the as long as the performance system is integrated client doesn’t achieve their business case so the behaviors of the person on the ground is then they’re unhappy. So we like to have that balance and consistent with the overall expectations for the rounded view. But it’s also is our customer client that’s fine. happy, we measure our people on our I mean the other clear dynamic in what you’re customer happiness, and also if they are referring to is going to be to make sure that when delivering the performance outcomes, both you’re in that type of environment that the culture in the work that we’ve been asked to do of the organization and in our case our desire to but given that we’re focused on end to end drive what we call fourth and fifth generation performance are we really delivering that outcome, which is really about driving end to end to end performance commitment. So end performance even if we are not doing the we feel that getting a balanced scorecard in whole process you have to drive that culture and place is more appropriate and that’s the way engagement into all of our people. And in that that we operate on a day-to-day basis. case obviously that would be something that And then if you map that onto what I said earlier which is you know to be honest we would need to be a consideration as well. www.globalizationtoday.com

C-Suite Spotlight like our people to be transparent with their clients. I mean on Microsoft as I mentioned before we openly shared every year our key executive’s personal objective and they did the same so that there was complete transparency there on the interests of both parties and everyone knew where everyone was coming from. Now driving financial performance is of course you know we’re a commercial business and when the partner is running a commercial business, however our view on life is that if you drive the endto-end performance the rest of the economics will take care of themselves. Because the clients want the performance, so we are absolutely not afraid to focus on driving productivity and performance because we believe in the longer term that creates a more sustainable client relationship. Thom: That actually brings to mind another

question which is where do you see compensation coming into play? Often the suppliers, account manager is tasked with growing the revenue and the profit while the vendor manager for the client is tasked with increasing productivity and lowering the vendor spend. Is there not often an inherent conflict of interest? And I know in your earlier comment you mentioned that when you try to mirror the organizations, and part of that I would think is having a mirror to compensation so there’s a common incentive.

Anoop: You’re completely correct Thom.

equivalent of the account managers is not only the financial performance of the engagement both on our side and the client’s business case, because often if the client doesn’t achieve their business case then they’re unhappy. So we like to have that balance and rounded view. But it’s also is our customer happy, we measure our people on our customer happiness, and also if they are delivering the performance outcomes, both in the work that we’ve been asked to do but given that we’re focused on end to end performance are we really delivering that end to end performance commitment. So we feel that getting a balanced scorecard in place is more appropriate and that’s the way that we operate on a day-to-day basis. And then if you map that onto what I said earlier which is you know to be honest we like our people to be transparent with their clients. I mean on Microsoft as I mentioned before we openly shared every year our key executive’s personal objective and they did the same so that there was complete transparency there on the interests of both parties and everyone knew where everyone was coming from. Now driving financial performance is of course you know we’re a commercial business and when the partner is running a commercial business, however our view on life is that if you drive the end-to-end performance the rest of the economics will take care of themselves. Because the clients want the performance, so we are absolutely not afraid to focus on driving productivity and performance because we believe in the longer term that creates a more sustainable client relationship.

I mean we like to make sure that we’ve got a balanced approach for this so the behaviors of the individuals on both sides are consistent with the overall intent of the engagement. And I think you have Thom: Okay. Now from my perspective, ITO is a complex business arrangement but to be careful not to get focused on one it’s also fairly straightforward and that set of metrics versus the others. So in is single process. BPO on the other our business our measurement of the

GlobalizationToday June - July 2012

C-Suite Spotlight hand can be all over the map from low end transaction processing to high end KPO and there’s a much higher human factor involved. Can you elaborate on the differences in structuring deals in each scenario to obtain the proper governance structure? Anoop: I mean I think this comes back to some

of that performance system the interlock model between the client is of course going to get flexed because when you’re in a higher end process there’s more touch points with the client, you know the scope of the work that you’re doing can be more great in potential handoffs you have to try and deal with. So I think you have to flex the interlock model as well to suit the environment which in some cases may entail a lot more face-toface connectivity you know in the area that I mentioned in demand forecasting and planning. We tend to have a sort of split team you know sort of hub and spokes model where you have a team of planners on the ground but you also have people imbedded into the business who can really be close to understand the business needs so that they can understand that. And that’s part of design of interlock model.

of the building blocks that I was talking about. If we come back to the sort of attitudes, behaviors and building blocks point, for me the way the building blocks are designed have to be flexed to accommodate the complexity of the work. So that would include getting the performance systems right because in a more transactional commodity area the performance system is inherently simpler. Whereas if you’re doing, you know if you’re providing a service, Thom: Okay, that actually leads to my next which is, much more complex, so for question, which is coming onto the people example one of the services that we side, I mean structure is one thing but the provide is around demand forecasting implementation, the execution of it really replenishment for the supply chain which is a people dependent function. So from is not a transactional and commoditized selling and structuring the deal they’re service. We have supply chain planners not the same skill set as transitioning the that do demand forecasting for some deal and/or ongoing governance. What of their clients, and so the performance would you recommend are the key traits system that underpins that which that one should look for in potential you know at the top of the pyramid candidates to lead a governance team on if you imagine you’ve got the client both the buyers and the sellers side so expectations and at the bottom of the that you get the proper outcome? pyramid if you can imagine you’ve got the operational excellence metrics Anoop: I mean Thom this is a great question and it’s which would include service levels that something that you know I’m certainly quite may include other things and then in passionate about in terms of really making the middle of the pyramid you’ve got sure that you get the right people because I the business outcomes that the clients think too often when you don’t design these looking to achieve. You just have to structures together you don’t really even flex how that performance system is consider simple things like social styles designed. And then equally, as a result because the two people who are leading this www.globalizationtoday.com

C-Suite Spotlight both from the provider perspective and the customer positive because you know you need it if you’ve got perspective you know have to get on. So it’s very a lot of cultural change to institutionalize within the important to make sure that you know you really business and it’s good to have a respected leader in think about the individuals, their styles, and you those conditions. match them to the results that you need. So coming back to the example that I mentioned Thom: Thank you, I think that’s great advice and earlier around Microsoft, when we were designing really helps illustrate the importance of the that we really thought very carefully about people. I people factor and the nuances associated mean it was a very very complex program so Microsoft with it. decided to put one of their key finance executives Now on the other side of the equation when who actually happened to have a military background we talk about SLAs do you feel that most which actually turned out to be a Godsend because SLAs that are out there that you’ve seen are it was a very very complex program, 18 months of sophisticated and detailed enough to allow transition, 260 go-lives and I think something like 35 for collaborative governance? Can you have go-lives in parallel. collaborative governance without mutually But the person on their side was ex-military so understanding the metrics that are truly he had a certain style of working and that worked moving the needle for the client so that you immensely well for that program. And he needed don’t run the risk of doing the wrong thing a partner and a person he could work with that was able to sort of match his style and we needed to put exceptionally well? someone that would match his own precision touch style of operating. And so I think getting that right Anoop: I don’t think you can achieve collaborative is an important success factor in getting the right governance by just focusing on SLAs. For me success and results. Now I think from a client that is what I would call the third generation perspective there’s an interesting view here, which way of operating which is where you know is, you take people from the business and put them you start a process and you really just focus into these roles to give them the exposure because on the cost quality speed of that particular they have the business interlock and understanding. process which is a way that service levels are One of the risks that I see to that is that sometimes inherently constructed. For me they’re needed good operators don’t make good governance people to provide a state of health of the process, they and on the client’s side the person is playing a are not sufficient to meet the expectations of governance role. And my own experience is that driving performance. And so back to the in certain towers like in finance and accounting example that I was saying before in our way sometimes you tend to put the really good finance of thinking and this leads into one of the key director into a sort of lead role and it sometimes recommendations from research around end doesn’t work because the person inherently is an to end approach, really the service levels are accountant and they have a certain command and at the bottom of this pyramid. They’re there control style way of operating. to ensure the health of the service is okay and So I think you’ve really got to think carefully service is being delivered in an operationally about operators versus governor in the way that you excellent manner. They are not sufficient to structure this and there’s a lot to be said sometimes meet the business outcomes for the client to bringing a fresh perspective from a different because they inherently are not end to end part of your organization into leadership so they in nature and you have to define those end are not somehow constrained by the way they used to operate. On the other hand sometimes that’s a to end metrics because they’re the things that 20

GlobalizationToday June - July 2012

C-Suite Spotlight really drive the performance for your client. So you now back to my example around accounts payable before, the typical service levels in that space are cost quality speed related but the clients are often looking for business outcomes around payment within terms which is a completely different. It’s not cost quality speed metrics so – and it’s actually not controlled entirely by the provider either, it’s controlled by both parties. I think you have to get the whole system right and build an integrated performance framework versus just focus on SLAs to get the recommendation. Thom: Okay. Thank you. Now again we’re dealing with people here. Trust is you know a great factor I would think in getting collaborative governance right. And to me, from what you’ve been mentioning it would seem to imply a glasnost type open book transparent financials arrangement to be truly collaborative, otherwise the supplier and the buyer likely would have competing priorities. The buyer wanted to keep the suppliers in single digits, the supplier is happy to retain savings and seeing their profits you know go 20, 30, 40 percent more, whatever they can get. Can you talk about the trust factor involved and you know the willingness to be transparent as a factor. Anoop: I mean this is an interesting point. I’m not

so sure that it always, although I can see

the correlation, it comes down to the profits and you know we like to make sure that we focus on the return on investment. But equally, the buyers of the service have to be confident that they are achieving the right value for money in the service that they are buying. So for me the criteria around defining the overall scope and business outcomes that you’re looking to achieve and the business case associated with that and per the recommendations from the research really focusing on not just the cost base but the value that is generated beyond the cost base and making sure you take a business case led approach. And then giving both party the right level of transparency to make sure that they are confident that there is value for money because I mean there has to be confidence around value for money. And there are ways to do that, it doesn’t necessarily all have to be based around you know the amount of profit in straight commerce which is being made which is you know sometimes you have to be careful with that because you know there’s gross profit and there’s net profit and people look at profit in different ways. Equally you can quite easily give a delineation of transparency and value for money by giving the client transparency to what really the underlying effort that is involved in delivering the service. And we fully support giving our client the right level of transparency to make sure they understand that getting a value for money service.

The basis of high-performance collaborative BPO governance. Partnership view • Strategic partnership attitude

Partnership behaviors • Understand each others’objectives • Proactively refine objectives • Resolve conflicts fairly

Achieving High Performance in BPO,” Accenture, 2012

High-performance BPO • Cost and service levels expectations met • Greater flexibility to manage temporary volume fluctuations • Increased speed to prepara for changing business cinditions • Optimized and enabled the entire process or busness function • Helped improve business performance of other • parts of the organization • Expected to create additional sources of value • Deliverd business outcomes which were not originally expected • Enabled the organization to increase the top-line

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C-Suite Spotlight Thom: Okay. So now sourcing deals you know

through the years you know have been done by the clients M&A teams. Many are structured by procurement or the strategic sourcing department these days. Who on the client’s team should drive the creation and structuring of the deal and who should manage it from a collaborative governance structure since my supposition is that they shouldn’t be the same and not to get into that vendor buyer type relationship that seems to typify most deals?

Anoop: Our research has shown that in the

For example most of the clients that we work with where we do finance accounting work and picking up so there’s the procure to pay part of the finance accounting process scope which is one of the more mature areas, suffer inherently from compliance issues. People not writing purchase orders in the right way or you know someone asking for an invoice to be approved and spending four weeks not approving the invoice which affects circle time and payment for the vendor. That is something that the client is responsible for. So you need to construct a relationship where both parties are really trying to solve that problem. And sometimes when you over-procure things you know what can happen is the provider can entrench into the services that they’re being contracted for and do exactly what it said on the paper that sometimes can be not sufficient to deliver the performance outcome. So you know our research is saying that it has to be driven from the business and you need to focus on all of these other things like the endto-end process, the retained organization that drives the real business outcome. And that’s consistent with the way that we would see these operating from our own experience.

high performing relationships they’re set up and structured by the business. And yes, support is needed from other groups in order to execute but they should be set up and led by the business. And that is relatively consistent with my experience to make sure that you know sometimes when something is very very heavily procurement led you can lose sight on end-to-end approach. You can lose sight on really how do you get collaborative governance, really how do you define value beyond cost which is not always you know directly Thom: Okay, now you’ve mentioned the term measurable or attributable so you can high performance BPO and high lose sight if you are not careful of those performance teams. What is the effect of broader factors. culture between the buyer and the supplier Now that’s not always the case. But in building that high performance it is important that it is business led. collaborative governance team? So while It’s also important that it is business the benefits are clear many if not most led because when you go down the companies are I think culture bound and BPO route if you’re really focusing unable to achieve it to get to that goal. Do on end-to-end processes it’s actually you think collaborative governance will not just about what you put into the become mainstream or is it something BPO scope. It’s about what gets left that really is reserved for you know a behind in the retained organization. select few, perhaps the top ten percent?

GlobalizationToday June - July 2012

C-Suite Spotlight Anoop: I think it’s going to take a lot of and we got everyone rallied around delivering

effort. It takes a lot of effort to achieve collaborative governance so it’s not necessarily whether everybody can achieve it or not, it’s the amount of effort required to do it. And I do believe that culture is a key part of that because at the top of my performance pyramid is you know the client expectations. And one of the underpinning components of expectation management is the culture and alignment between the two organizations and that has to match for the top of the pyramid to be architected in the right manner. And then equally on both sides the culture of the engagement that’s been created has to be disseminated down. So for example in our own business where we have a BPO business now of well in access of 45,000 people around the word, we talk about fourth generation and driving end to end process results. We have to engage every one of our people in believing in that vision and getting that right so they understand actually the job is about driving end to end performance, not just the bit you’re doing, is a cultural dynamic we’ve have had to institutionalize within our business. And we have seen that as being quite critical for us to be successful. And equally when I apply it onto specific engagements that we’ve worked in, again picking on the example that I used before say at Microsoft, you know there was a culture that was established as part of the engagement at the beginning. There was a huge change management exercise, it was all part of a much broader vision that Microsoft themselves had outlined

in that vision and getting that disseminated all the way down the organization was absolutely a key to success so everybody can pay attention in their own way based on the work that they do to how their job relates to achieving the overall outcome. So I do think that getting culture right is important, it’s – in fact collaborative governance culture is the building block that will drive the behaviors. If I go back to my sort of attitudes behaviors building blocks example it’s the thing that drives behaviors. Thom: So many times when something is popular

in the industry everyone adopts it and starts creating variations of the term to suit their own purposes. “Transformational” for instance is one of those terms that’s widely used, usually misused and often up-used by suppliers throughout the industry. Does collaborative governance face a similar fate?

Anoop: When we finish this research and we took

all of the outputs from the research and the eight characteristics that came out very clearly as characteristics that would support high performance relationship, I actually had a strange sense of irony when I looked at the list. And the irony for me was that none of these things are new. They’re all things that we’ve all been talking about for years. And I think the point around jumping on the bandwagon is a good point. From Accenture perspective I don’t necessarily see it like that. I see these eight characteristics as being complimentary of what we have always been thinking and the direction that we have always been going in. Accenture www.globalizationtoday.com

C-Suite Spotlight has always been about driving end-to-end performance. It’s always been about making sure you pay attention to change management. It’s always been about making sure that you drive business outcomes and you don’t just focus on what gets outsourced, you focus on the whole so that the client has to change as well. And so I haven’t really seen – for me it confirms what we’ve always been thinking and it brought me back to some of the original thinking. But I take onboard the point that you know yes sometimes the terms can come in and out of fashion in the market. I don’t see it like that from our own selfish view because these are all things that you know frankly have been underpinning the way we thought that this market would evolve.

people again so when organizations are looking at it they have to look at the individuals who are going to be placed in key leadership roles to make sure have they really got the characteristics, attitudes and behaviors that would be successful not only with their organization but also with the intent of what they’re looking to achieve. And then I think you’ve also got to demonstrate and celebrate the successes and signal where there has been collaborative behavior and really encourage both sides of the organization to embrace those and replicate them as much as possible. So those are some of the things I think you’ve got to look at. It’s really about getting the right people, making sure that you’re open and honest, inevitably talking to the customers because that’s the thing that will give you the real life experience Thom: Right, that makes sense. What would on what an organization is like to work with for you say are key success factors or leading the longer term. indicators or proof points that the buyers who consider when evaluating suppliers Thom: Now you mentioned Microsoft earlier propensity to achieve true collaborative as I guess a representative case study. governance versus the more traditional Are there other clients that you could vendor-buyer type relationship? speak to where you’ve achieved this high performance BPO using the collaborative Anoop: I think actually organizations that are governance model and is there any chance looking at this have to talk to the current we can expect to see a detailed real world client of the provider. I mean it’s the written case study from Accenture in a only real way you can get exposure to future edition of Globalization Today? what is it really like to work with these organizations in the good times and in the Anoop: So we are working as part of the research bad times. And I think you have to take to get some supporting case studies that a balanced view of how your provider really prove the characteristics that behaves in both circumstances and both we have talked about and I referred are important. In the good times is the to relatively consistently during this provider really trying to step up and discussion Microsoft case because I accelerate the vision and in the bad times spent some personal time working with is the provider really looking holistically them and they really are a fantastic at the real problem and trying to work in organization to work with. So I have a partnerial fashion in the right way. some personal experience there to share I think it’s also important to make sure but also because it is one of our celebrated that you get the right leadership and the engagements and I personally feel that

GlobalizationToday June - July 2012

C-Suite Spotlight you know a lot of the characteristics have made that engagement a success of the characteristics that are sited as it relates to high performance characteristics industry. The other client example that I like a lot, and there are several that we could bear here, is with BP. You know BP actually back in ‘90, ‘91 were the first organization we ever worked with in a BPO type manner. In fact as far as we know it was the first F&A BPO deal in the market and we’ve had a long and very interesting journey with BP as their organization has changed shape, acquired, divested, you know in the good times and in the bad times and we have stayed with them through that journey. And in fact interestingly enough BP was back in the genesis of this market you know there was a lot of take on a staff of the client, in fact there are many people in our business today who are in leadership position that actually originally came from BP and have made very successful careers with us. And as we’ve gone through these we’ve maintained a very close relationship with them, tried to continue to focus on a lot of the characteristics that made the success, but also have not been afraid to break new boundaries and do things in the interest of creating a new type of operating model. I remember back in 1999 when we had the first discussion with BP you know what back then was a crazy idea, it’s being somewhat amusing now, to move some of the operation offshore. And the great thing about BP is they’ve been absolutely not afraid to pioneer in doing things in a different way. It’s amusing now but obviously in the environment today moving work into an offshore operating model is somewhat of an expected part of designing a solution for many of these functions. So BP is probably the other one that I would pick out from a long history and it’s a 20-year history as opposed to something that has been established over a period of time. I guess the last point that

I would make on this just as I reflect on this discussion is these are not easy to set up. I mean we feel somewhat fortunate in Accenture that because Accenture is a business that inherently focuses on a number of different disciplines of which BPO is just one. As you know we also have a significant management consultant and technology business that those deep relationships with the key clients which is what we’re about allows us to create these longstanding collaborative structures. It’s not easy getting these things right as evidenced by the results and the fact that you know less than 20 percent or one in five really hit the high performance mark. So it takes a lot of effort from both parties to get there but it can be achieved as long as you stick to the principles that we’ve outlined which we firmly believe are the right principles in getting it right. Thom: I want to thank you for your time, it’s

been a very insightful discussion and one that certainly I think offers a lot of good recommendations and tips for people that will be reading or listening to the interview. And in traditional Accenture fashion it’s apparent that you put a lot of thought and a lot of rigor behind this. It’s not something that you just put together on the spur of the moment to meet a specific short term need. So again I commend Accenture for its leadership in the industry and raising the bar yet again.

Anoop: Thanks Thom. Thom: And we look forward to talking to you again in the future.

To access the “Achieving High Performance in BPO” research report, visit: www.accenture.com/highperformancebpo www.globalizationtoday.com

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The Search for the World’s Best Leads to the Global Outsourcing 100 by: Sandy Frinton, IAOP

Rankings of Providers and Advisors are Valuable Industry Guides Rewind to eight years ago. As a company seeking to outsource a service, there wasn’t one definitive resource to research firms that could give an unbiased independent overview of providers who were considered the “best” in the industry. Recognizing a need to develop a single list that looked at the entire global outsourcing industry and ranked companies as both established leaders and up and comers using similar criteria to those used in the RFP process, the Global Outsourcing 100 list was born. The World’s Best Outsourcing Advisors list was added five years ago using the same tailored approach to bring the same value to advisors, including consultants, research firms and attorneys, and their clients. Today, the Global Outsourcing 100 and World’s Best Outsourcing Advisors has established itself to be the trusted go-to-resource creating tremendous value for both the companies on it and those looking to do business with them and remains the sole one-stop list. “The approach we used and the criteria for selection filled a number of big holes in serving the needs of companies examining outsourcing service providers,” said Michael Corbett, founder 26

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and chairman of the International Association of Outsourcing Professionals (IAOP) that conceived of and developed the lists. While most industry lists are based solely on size or growth, the Global Outsourcing 100 lists differentiate themselves by combining quantitative factors with well-structured qualitative measures. Applicants are judged by a panel of industry experts on size and growth in revenue, employees, centers/offices and countries served; customer experience; depth and breadth of competencies; and management capabilities. “We’ve basically created a process that mirrors the client evaluation process,” said Jagdish Dalal, COP, IAOP Managing Director, Thought Leadership, who heads the evaluation panel. “In the end, the Global Outsourcing 100 and World’s Best Outsourcing Advisors is a list for customers that has been vetted by customers.”

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AND THE WINNERS ARE…

For the fifth consecutive year, Accenture was named the #1 ranked outsourcing provider and KPMG topped the list of leading advisors to the industry, according to the rankings released by IAOP this month. Ranked among the top 10 service providers, along with Accenture, are, in order: (2) Infosys, (3) HCL Technologies, (4) CBRE, (5) ISS, (6) NCR, (7) Wipro Technologies, (8) Capgemini, (9) CSC and (10) TeleTech. “Outsourcing is a global business, and to fully realize its benefits, one must have visibility and presence in global markets,”

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says Mark Toon, Global Leader, KPMG Shared Services and Outsourcing Advisory. “No other advisory firm brings the global reach and breadth of capabilities to the outsourcing advisory and shared services marketplace and we are honored to achieve this recognition from IAOP.” The top 10 advisory firms following KPMG this year are: (2) Deloitte, (3) PwC, (4) Alsbridge, (5) Ernst & Young, (6) Avasant, (7) Baker & McKenzie, (8) Kirkland & Ellis, (9) PA Consulting Group and (10) Booz & Company. UP AND COMERS TO WATCH

The Global Outsourcing 100 also is unique in that it is two lists in one. The first 75 companies on the list are classified as “Leaders.” These are larger, more established companies with more than $50 million in revenue or 5,000-plus employees. The last 25 companies are “Rising Stars,” smaller companies that are having a big impact in their areas. The top 10 companies in the Rising Star category are: (76) Intetics, U.S.; (77) Bleum, China; (78) ReSource Pro, U.S.; (79) Scicom, Malaysia; (80) Nagarro, U.S.; (81) Xceed, Egypt; (82) Itransition, U.S.; (83) Freeborders, China; (84) SoftServe, U.S.; and (85) Auriga, Russia. In addition to the 100 service providers, IAOP produces more than 80 sublists by service area, industry served and geography that provide customers of outsourced services with an invaluable tool for selecting the right service provider. IAOP also recognizes companies that have appeared on the Global Outsourcing 100 each year since its inception. These consistent top performers are: Accenture, Amdocs, Bleum, Capgemini, Ceridian, CGI Group, Colliers Global Corporate Solutions, EMCOR Group, 28

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Genpact, HCL Technologies, hiSoft Technology International, Johnson Controls, Mastek, iGate Patni, Sodexo, SPi Global, Unisys, and Wipro Technologies. While it includes providers from across all sectors - from ITO and BPO to real estate and facility services, logistics, and design and engineering - the Global Outsourcing 100 shows some common trends across the industry. “First, the things that make an outsourcing service provider great - delivering exceptional customer results based on strong management systems and leadership - are the same regardless of the service being delivered,” Corbett notes. “Second, the lines between types of services are constantly changing and evolving to the point where the traditional ways of segmenting the industry constantly blur over time.” The data from the top providers and advisors also shows an increased focus on collaborative outsourcing, where customers and providers work together to introduce new technologies that add value and innovation. “As the benefits of offshore labor arbitrage will eventually decline, the next generation in savings and value is underpinned by new technology, talent and innovation,” says Cliff Justice, U.S. Leader, KPMG Shared Services and Outsourcing Advisory. “We are honored that IAOP has independently recognized KPMG’s success in helping clients establish effective outsourcing relationships that are based on sustainable objectives.” NEW CSR FOCUS

Another important focus seen from the Global Outsourcing 100 companies is corporate social responsibility (CSR) in outsourcing. In response to that important trend, IAOP has

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added a new award program. All service provider applicants who complete the optional bonus question about CSR activities will be eligible for the 2013 IAOP/ ISG Global Outsourcing Social Responsibility Impact Award (GOSRIA), the association announced. IAOP’s CSR Committee and ISG specifically seek to acknowledge the achievements of outsourcing service providers committed to a CSR program that fosters community involvement, fair operating and labor practices, respect for human rights, attention to environmental impacts and consumer issues, and implements good governance. IAOP’s CSR committee will act as the independent judging panel for the 2013 award, which will be presented at the ISG SIC Conference next year. The finalists for the GOSRIA will be named as a “Best in CSR Outsourcing” sublist of the Global Outsourcing 100. The inaugural award was presented in 2012 to CBRE, a global commercial real estate services company headquartered in Los Angeles, based on achievements such as becoming the first carbon-neutral global real estate outsourcing firm, markedly increasing corporate and employee giving to charitable and community organizations, and significantly expanding and improving its ethics and compliance program.

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INDUSTRY INSIGHTS REVEALED

The research gathered from applicants to the Global Outsourcing 100 each year also shows important industry trends and reveals that outsourcing remains a growing segment of business. Average revenue for 2012 Global Outsourcing 100 providers was $1.6 billion, with a growth rate of 6 percent versus 13 percent in 2008. Reflecting the tighter employment picture globally, the revenue growth did not result in added jobs for the providers. IAOP found 17,400 employees were engaged in outsourcing on average with 2012 Global Outsourcing providers; representing the same number as in 2008. Advisors also showed that 2011 was a growth year for business with a revenue growth of 37 percent while growing employment by 12 percent year over year. BENEFITS

PROVIDERS

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CUSTOMERS

Customer organizations are using the Global Outsourcing 100 in their early review process to identify both established players and new comers they might not have considered or known about. Intetics Co. has realized value in being ranked as a Rising Star for the past seven years and being the #1 player in that section for the last two years. â&#x20AC;&#x153;Being in the top 100 outsourcing

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organizations is prestigious and being ranked number one among growing companies is even more honorable,” said Serge Stepantsov, Vice President, Business Development for the Wilmette, Illinois provider of remote IT services. “We actively use this information when talking to our clients and prospects, and believe they value it.” In addition, providers who have participated in the program say the discipline of the process has improved their own marketing and communications with many reporting that the application took them through a well-defined technique for capturing and explaining what makes them special. In some cases, achieving a certain ranking has even been adopted as a strategic corporate goal - a benchmark for excellence against which the companies entire operations are driven. “Just applying for the list helps companies get better at what they do,” Dalal says. On the other side, many client organizations have told IAOP that it’s easier to work with companies that are on the list because of the consistency and clarity in how they communicate about what they do and how they do it. “The Global Outsourcing 100 has not only helped showcase the best in the industry, it has actually helped those companies get better,” Corbett says.

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Customer References

emids Technologies

Management Capabilities

CrysTelCall

Customer References

LegalBase

Management Capabilities

100

Harbinger Systems

Customer References

1-75 = Leaders Judging Group (larger, more established firms) 76-100 = Rising Stars Judging Group (smaller, emerging companies)

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COMPLIMENTARY RESEARCH

Job Losses from Offshoring and Productivity Improvements Far Outpace Gains from Economic Growth By Michel Janssen, Erik Dorr and Martijn Geerling, the Hackett Group

Projected slowdown in services offshoring after 2014 poses challenge to India and other low-cost destinations Executive Summary The first signs of modest growth are returning to developed economies, resulting in new jobs in corporate business services functions (finance, human resources, IT and procurement) domestically. However, the transformation of global operating models for these support services, which started well before the recession, continues to eliminate jobs (through productivity improvements) or move them to low-cost geographies. As a result, rather than increasing, the total number of business services jobs located in North America and Europe will actually continue to shrink. According to new research by The Hackett Group, only about 4.5 million of the 8.2 million business services jobs located in North America and Europe at the start of 2002 will still exist in 2016. Companies in these regions are quickly changing their global operating models to remain competitive. By 2016, the number of potentially â&#x20AC;&#x153;offshorableâ&#x20AC;? jobs will have been reduced to one million. This decline has far-reaching implications for India, China and Eastern Europe, which will need to develop alternative sources of demand in order to maintain growth in the offshoring/outsourcing business services industries that have energized their economies. 32

GlobalizationToday June - July 2012

COMPLIMENTARY RESEARCH

TRANSFORMING BUSINESS SERVICES DELIVERY: THE JOURNEY CONTINUES

The movement of jobs from developed into lowcost geographies is an increasingly sensitive political issue. Understandably, the recession and subsequent “jobless recovery” have drawn even more attention to this phenomenon. From the executive suite perspective, movement of jobs around the globe is an integral element of the execution of business strategies that increasingly involve globalization of the operating model of the business. This research by the Hackett Group focuses on jobs in business services in finance, IT, procurement and human resources. In these pages, we assess the past, current and projected state of these jobs in the North American and European economies. To uncover new insights about productivity gains, outsourcing and offshoring of the delivery of business services, Hackett Group analyzed their proprietary benchmarking and study data

about the processes, organization, technology, governance and other aspects of business services in large global companies in combination with IMF data on historical and projected economic growth rates in North America and Europe1 and financial reports filed by publicly traded companies. Jobs in business services have been moving out of developed economies for the past decade (Fig.1). The large job losses of2008-2009 were of course a direct result of the economic crisis. The numbers projected for 2013-2016 indicate a slowing of job cuts, at least in absolute numbers.The main reason is that, through the com pounded impact of years of cutbacks in business services jobs, the absolute number of these jobs has declined steadily since about 2002. As a result, the same productivity improvement percentages represented a much larger number ofabsolute job losses in 2002 than in 2012. www.globalizationtoday.com

COMPLIMENTARY RESEARCH

The effect of this shrinking FTE (full-time equivalent) job base is particularly significant in IT, which has experienced the largest number of losses as a percentage of the baseline number at the start of 2002 (Fig. 2). Alhough job losses due to offshoring and productivity improvements were higher in 2002-2007, greater economic growth during this period offset more of the losses than what is projected for 2012 and beyond. Since the early 2000s, offshoring has been a major contributor to the decline in highcost business services jobs in Europe and North America. The numbers are stabilizing at about 150,000 jobs moved offshore per year. More than anything, it is the prospect of continued, sluggish economic growth that is causing the popular and political backlash against globalization. Under normal economic circumstances, continuous productivity improvement combined with economic growth would be considered a healthy pattern. Of course, the other side of the coin is the creation of a proportional number of jobs in the primary offshore 34

GlobalizationToday June - July 2012

COMPLIMENTARY RESEARCH A net decline of 45% of total business services jobs between 2002 and 2016 Hackett estimates that, at the end of 2001, North American and Europebased companies with over US$1 billion in 2010 revenues employed about 8.2 million people in business services positions. (The total number of companies included in this analysis is 4,700.) Between 2002 and 2016, 3.7 million of these jobs will have been eliminated through a combination of productivity improvements (3.2 million, or 39%) and offshoring (2.1 million/25%), partially offset by 1.6 milion jobs (20%) created through economic growth (see Fig. 2 on previous page). This represents a net decline of 45% over a 15-year period.

destination geographies, led by India. Considering the decline in total business services jobs, the stable absolute number indicates only a small increase in the percentage of jobs moving offshore each year. Hackett research indicates that by 2016 the total cumulative number of offshored jobs will reach 60%- 65% of the total number of jobs with the potential to be offshored. Further analysis by business function shows that IT departments not only experienced the largest decline (as a percentage of the 2001 baseline number of jobs), but also bore the brunt of the reductions in absolute terms. It is important to understand that the lost IT positions strictly reflect jobs at companies with over US$1 billion in revenue. These cutbacks aside, as companies embed technology into an expanding range of products, new IT jobs in their product development organizations are being created. Finally, the IT industry (hardware, software and telecommunication) itself continues to grow, creating additional demand for IT workers. As a result, the picture of the IT job market is not nearly as bleak as suggested by the 15-year trend implied in Fig. 3. Instead, companies went from “making” technology to “buying” it, and from a sourcing model that changed from insourced to outsourced. This trend is irreversible; the rapid adoption of on-demand technology provisioning models such as software-as-a-service (Saas) is only accelerating the pace.

www.globalizationtoday.com

COMPLIMENTARY RESEARCH UNDERSTANDING THE DRIVERS OF BUSINESS SERVICES DELIVERY RATIONALIZATION

The previous section presented the macro view of the decline in traditional North American and European back-office jobs resulting from productivity gains and offshoring. Next, we turn our attention to the initiatives by individual companies that underlie this trend. The most powerful by far in the early 2000s was the consolidation of routine, transactional businesssupport activities into shared services centers. More recently, companies have expanded the portfolio of services offered by these organizations to include higher-value, knowledge-centric processes. Multifunction service centers have overtaken the previous model of singlefunction

the GBS is not far behind (Fig. 4). The evolution and expansion of GBS organizations is the driving force behind the productivity gains being anticipated. GBS organizations, like the companies they serve, function best if they move work to wherever it can be done most efficiently and effectively. (This is the “global” in “Global” Business Services.) The result is that GBS organizations are themselves also expanding their global footprint, moving substantial numbers of jobs to lowcost geographies. Thus, the rise of GBS organizations accounts for much of the rise in offshoring of business services jobs. A 2011 Hackett study of

entities, allowing further leverage of skills. Hackett’s 2011 study of these Global Business Services (GBS) organizations (as this nextgeneration approach to shared services is known) revealed that some companies now execute over 50% of their transactional business services work in a GBS organization. Notably, the percentage of knowledge-centric activities performed in

globalization trends showed that companies are planning to accelerate the movement of work into low-cost geographies across the entire spectrum of services (Fig. 5).2 The study data offers a microlevel explanation of the macro trend outlined in the first part of this research. (For more in-depth analysis of the evolution of GBS organizations, see the Related Hackett Research section.)

GlobalizationToday June - July 2012

A second driver behind the disappearance of business services jobs in developed economies is the broad-based globalization of all aspects of typical company operating models. As product/ service lines, go-to-market strategies and supply chains become more global, the portfolio of business services required to support these global operations must become more global as well. The result is that it is no longer natural or even appropriate for the center of business services delivery to remain in the traditional

domestic market. If, for example, India evolves into the optimal location for a global applicationdevelopment competency center, the Indian IT organization progresses from an offshore arm providing capacity to the North American or European-headquartered organization into the global IT center itself. The same transition could take place for elements of the procurement, finance and HR services portfolio. This explains the ongoing movement of business services capacity away from developed economies. www.globalizationtoday.com

COMPLIMENTARY RESEARCH Put slightly differently, the redesign of the value chain has forced companies to rethink business services delivery. The expansion of GBS organizations is certainly one aspect of this evolution, but the impact is much broader. The need to support a global operating model for the business translates into a need for global standards for information, process and technology platforms. Not only is this necessary to support the business, but essential if companies are to remain competitive. IMPLICATIONS FOR DESTINATION GEOGRAPHIES

While services industries in India, China and other low-cost geographies continue to grow, one important driver of this expansion – North American and European companies moving business services work offshore – will level off significantly during the next few years (Fig. 6).There are several reasons for this. First, the number of business services jobs being offshored is rapidly declining because the majority of these jobs have been moved already. In addition, the lack of sufficient economic growth to offset

GlobalizationToday June - July 2012

the impact of productivity improvements is also taking a large bite out of the number of offshorable jobs. Many of the new jobs created through growth are less suitable for offshoring (e.g., controlling and analysis), whereas those eliminated through productivity improvement are largely of the offshorable variety (e.g., transaction processing). A decade from now, the landscape will look fundamentally different, as demand by Western companies for traditional offshore capacity will have largely dried up. To maintain growth of their business services industries, low-cost geographies need to replace this demand with: 1. Domestic demand, including local industries and local operations ofWestern companies in low-cost countries. 2. Demand for new services beyond traditional finance, HR, procurementand IT “back-office” services. 3. Demand from technology providers (software, services and hardware),in particular in the information technology industries.

COMPLIMENTARY RESEARCH In the more advanced low-cost destinations such as India, all three sources of demand are currently driving strong growth. In China, nurturing greater domestic demand will be of particular importance. FOCUS: INDIA

India remains the destination of choice for most companies that have established GBS organizations or plan to do so. Hackettâ&#x20AC;&#x2122;s 2011 Business Services Globalization research identified India as the number-one location for GBS centers: 74% of companies consider India to be a top potential destination for new capacity, followed by China at 55%. Nevertheless, Indiaâ&#x20AC;&#x2122;s overall share in total business services capacity in low-cost destinations is expected to decline slightly, from 39% in 2011 to 38% in 2013. Combining anticipated growth by region with projections of business services jobs moving into low-cost geographies between 2012 and 2016 reveals that India will create fewer than 300,000 jobs from these traditional source of demand (Fig. 7). (Note that this does not include any demand from technology services providers; demand for business services outside of the areas of finance, HR, IT and procurement; or domestic demand.) STRATEGIC IMPLICATIONS

Projections of continued elimination of business services work in developed economies will have major ramifications for developed and emerging economies alike. First, companies need to plan for a reduction in the size of their business services organizations in developed markets. In Europe, there may be legal hurdles to downsizing, while in the US, offshoring can be a public relations nightmare. Also, employee engagement tends to suffer when there are questions about job security.

Companies need to rigorously adopt best practices for handling downsizings, including clear and open communication and reliance on natural attrition to the maximum extent. As the composition of the global labor force changes, strengthening talent management practices will be of paramount importance. Traditional talent management practices based on a top-down, command and control culture are ineffective for managing a global service delivery organization. Talent management practices must balance global process standards with local cultural differences. Operations in emerging markets also must make preparations. There is an urgent need to elevate the capabilities of staff to be able to function in a globally connected organization. This transition may involve transfer of senior executives into these geographies, developing local leadership talent, and facilitating the adoption of company cultures and values. India, which has the longest history of providing business services in a global context, will be most affected by this transition. www.globalizationtoday.com

COMPLIMENTARY RESEARCH

About the Advisors

Erik Dorr

Senior Research Director, Finance and EPM Executive Advisory Programs Mr. Dorr started his professional career of over 20 years as an IT consultant, and then moved on to a CIO position at a large manufacturing company. Michel Janssen Next, he worked as a Principal and Chief Research Officer research analyst covering Mr. Janssen is responsible enterprise business applications and technology for developing The Hackett strategy. Leveraging the extensive experience Group’s core intellectual he gained working with financial organizations property, including and optimizing financial processes, he was thought leadership. He named to his present role in early 2010. works with the company’s Executive Advisory Council to understand the Martijn Geerling strategic impact of new and emerging trends Europe Practice Leader, Global Business Services on the business functions. He also heads Hackett’s team of researchers and analysts Mr. Geerling has over in the US, Europe and India in the design 10 years of consulting and implementation of research studies; experience in business analysis of results; and production of resulting process redesign, shared findings. Previously Mr. Janssen was president services development, of Supplier Solutions for Everest Group and outsourcing and benchmarking. During this co-founded the Everest Research Institute. In addition, he provided strategic oversight time he has worked with for Everest’s Outsourcing Center, the world’s global companies delivering transformation largest outsourcing community and vehicle engagements in finance and other business for identifying early industry trends. He was functions. Prior to joining The Hackett Group, also a senior director in Gartner Group’s he worked at KPMG Consulting assisting Strategic Sourcing practice and held numerous clients in finance function optimization and management positions with EDS. compliance management. 40

GlobalizationToday June - July 2012

SAVE THE DATE! Outsourcing in Latin America: Trends, Challenges and Opportunities IAOP’s second annual Latin America

Outsourcing Summit , taking place October 1-2 at Hotel Unique in Sao Paulo, Brazil, brings together IAOP’s global community and leaders from across the Latin American business community to examine and leverage the growth taking place across the region. As companies are increasingly looking to use outsourcing more strategically as a tool to yield significant cost savings, improve efficiency and drive growth, the Summit will focus on the trends, challenges and opportunities in the region, including the findings from IAOP‘s extensive research on the state of the Latin American outsourcing industry. The Summit is being produced by IAOP and BRASSCOM with the support of Fortune magazine and will feature keynote sessions, educational breakouts, networking and more. For information on speaking, registering or sponsoring, visit www.IAOP.org/LATAM or email info@iaop.org.

October1-2, 2012 São Paulo, Brazil

THOUGHT LEADERSHIP

TACKLING THE IT SKILLS GAP

By John McGlinchey As new technologies continue to develop, to support global businesses, there is an ongoing dilemma that must be tackled. New forms of electronic communication have led to a lack of skills. At least half of businesses worldwide report an increasing IT skills gap within their organisation, according to our research. Despite all the recent media attention, businesses still haven’t found enough qualified workers and now it is clear that this is affecting the IT industry worldwide. John McGlinchey, Vice President Sales & marketing for EMEA, CompTIA reports on the need for better skills management. So, what are the specific challenges that businesses face regarding the skills gap? Companies are most concerned with protecting themselves in regards to security (South Africa 92% and Japan – 94%) and infrastructure of IT systems (South Africa – 98% and Japan – 94%). Other areas of concern include the management of networks and data centres. In the business world it seems priorities are not so much about what new technologies to teach, such as cloud computing and social networking technologies, but the ability to anticipate and implement these trends with ease. THE HUMAN FACTOR

Clearly, education and training industries needs to empower people, particularly in North America. The negative impact of the skills gaps affects staff 42

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productivity (48% of businesses in Canada and 41% in the USA) and customer relations (38% - Canada and 32% - USA); this highlights the need to invest much more in people, as well as products and operations. If the role of training organisations is about working with people, then IT trainers are in the best position to understand their clients’ needs and appropriately direct resources into those much needed areas. Now, more than ever, input is needed from IT trainers about what they can do to help, not just for new career entrants, but for existing employees too. Technology is moving rapidly and the increasing skills gap illustrates that businesses and relations are struggling to keep up by themselves. There are skilled staff available in the global market place, but they are few in number and around half of businesses in Japan (39%), South Africa (50%), UK (41%), Canada (47%) and the USA (43%) feel that they are lacking the resources needed to train up their existing staff. Even in a technologically forward country such as the USA, the resources are available, but they are just not adequate enough to meet requirements. The countries hit hardest by lacking skills are Japan and South Africa, with more than 60% of businesses in each of those countries indicating that they are feeling the effects.

THOUGHT LEADERSHIP But on a positive note, almost three quarters of organisations are now proactively seeking to address the issue by training or retraining existing staff for the skills they require, in Japan (64%), Canada (68%), USA (57%), UK (70%) and South Africa (66%). A small number are planning to contribute to school education programmes, but the general concensus is to work with solutions more within the business. Plus, there’s little point in helping the community if the business cannot resolve its own issues. There needs to be equal attention in providing services both for new career entrants and experienced employees. WHAT NEEDS TO BE DONE

Training organisations hold a very essential role and have the resources and expertise that companies are missing to set up valuable training infrastructures. The function of the IT trainer is to deliver the desired skills programmes and to ensure courses available are relevant. This can be done much easier and more effectively, with a training process in place. Additionally, research supports how crucial this is, as many businesses from Japan (57%) and the USA (56%), arguably two of the leading technologically forward countries in the world, said they had no process in place at all for monitoring skills. This means that they have no idea of what skills they are missing; they feel the effects but don’t know what the causes are. This must be addressed otherwise the problem will get worse. NEED FOR BETTER SKILLS MANAGEMENT

Unfortunately, professionals all over the world do not believe that their HR and executive management are paying enough attention to IT skills. This is concerning because without their understanding and support as decision-makers, nothing can change. It is the employer’s responsibility to assess and ensure employees are suitably qualified and well-resourced to carry out their work.

THE FUTURE

The message coming out of CompTIA’s research is that on-going skills development and resources are crucial for keeping up with changing business challenges globally. The skills themselves are not the issue, rather the need for well-defined, formal training processes that are recognised and supported from the top. It is promising to see a large proportion of respondents recognise the skills gap and are seeking formal training as a solution. But many organisations, and many countries, clearly still have some way to go. IT trainers will have a significant part to play in closing the IT skills gap and their contribution will enable businesses to close it at a much faster rate. This article was based on research from CompTIA’s ‘State of the IT Skills Gap’ online survey conducted between December 2011 and January 2012 of 1061 IT professionals and managers. ABOUT THE AUTHOR

John McGlinchey works for CompTIA, the global association for the technology industry, as Vice President of their European and Middle East operation with offices in the UK, Germany and the Middle East. He has worked in the IT industry for over 17 years, primarily in IT education.

www.globalizationtoday.com

Observations from China

OBSERVATIONS FROM CHINA…

By Ted Weyn, Managing Partner - HCMWorks

Daily Observations from the 2012 International Services Outsourcing Conference, Changsha China. As a member of the Sourcing Interest Group (SIG) delegation, Ted attended the 3rd Changsha International Outsourcing Conference in Changsha the capital of the Hunan Province. He shares his experience and observations over the 3-day event.

Day 1: SLEEPING GIANTS EVERYWHERE.

After arriving the evening before the conference, I was struck by the sheer development of this socalled “smaller” city within China. The scale of this country is quite awesome and to think that Changsha, not really a household name, it is a city within China that boasts: • A Population over 7MM • In 2011, Changsha’s GDP has reached a total of 561.93 billion Yuan (USD 88,5 billion), an increase of 14.5% over 2010. • Sum GDP of Changsha ranked the 7th of China’s capital cities • Has close to 50 Universities • The city blends the over 3,000-year ancient history with the skyline filled with construction cranes atop what seems like every building along the Yangtze River. However, amongst all this growth and innovation lies an entrepreneurial 44

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spirit and desire to succeed that is limited by only by its own learning potential. What was clear from the regional delegate companies of Changsha was an unquenchable desire to learn how to grow and expand their businesses internationally. What was also apparent was that these companies lacked understanding of very basic Western business

Observations from China

knowledge. Rudimentary business concepts applied by Western Businesses pertaining to such areas as; business management, human resources, and selling to global 1000 type customers were the prevailing acumen of the delegates. Many that I spoke to had not traveled outside of China in their lives, yet desired to be global in scope.

the recent college student who just graduated and is ready to go. Rich with enthusiasm and desire but light in experience and credibility. How does a company with so much spirit to be successful and with overwhelming confidence in their ability to deliver, penetrate the global marketplace? The consensus answer was it was going to take time. Like the college grad, it’s only entry-level jobs and building a resume of RECENT “BUSINESS” GRADUATE CLIMATE success that will get you promoted. Not many graduate and get hired as the CEO unless you’re The best way I described the delegates from starting your own company. The important Changsha’s services business community during part, however, to recognize is that with it’s sheer my panelist discussion was that Changsha is mass, China will mature on an accelerated www.globalizationtoday.com

Observations from China timetable. Using it’s own internal business base as a source of building its scale and experience, the companies will be able to compete with and all global players within a short period of time. CULTURAL RISK DIFFERENCES

The Changsha delegation was also introduced to this concept of risk mitigation for the Fortune 500 sized buyers. Culturally in China the “contractual agreement” is typically the binding agent for any deal. “I have something you need we agree and sign”. There is very little in the way of corporate supplier due diligence on the selection of suppliers in China in the same way western, and more so North American, companies do before making decisions to selecting a strategic outsourcing vendor. The day was full of interesting cultural, culinary and business aspects. Tomorrow we will be educated on the different business offerings available in business services outsourcing within Changsha. Day 2: LEARNING THE CHANGSHA BUSINESS MARKET

The second day of the conference kicked off with two segmented presentations by local Changsha Businesses who are seeking to bring outsourced services to North America. Delegates were provided insights to companies from Changsha segmented into two areas; Service Providers and businesses from the Qing Zhu Lake Eco-Tech Zone. HCMWorks attended the Service Provider breakout sessions. We were presented from 6 service-based companies ranging from innovative software development, to eBook documentation creation and cartoon animation services. As noted in day one, we saw a diverse range of business maturity from the presenters and a broad 46

GlobalizationToday June - July 2012

variance of services offered. The summarized observation from these presentations was that innovation and spirit, that was contagious on Day 1, was continued. However, the organizations still have a ways to go before they are organized in such a way to provide the required confidence that larger Fortune 500 companies demand. We didn’t see any representation of corporate readiness that would enable these companies to bring enterprise scale to the Western market today. Smaller projects will be the near term test of these Chinese outsourced providers. Our view is that China is experiencing very similar attributes to that of the early India outsourcing days. They are rapidly mobilizing to provide centers of excellence that global businesses can rely upon to provide outsourced services but still lack the maturity to win large-scale enterprise engagements. Providers demonstrated business cases of work currently being performed but nothing on the size and scale that the mature global outsourcing providers due today. You will see that this could rapidly change. The day then moved into smaller selected 1:1 meeting presentations where the SIG Delegates were offered the chance to meet with 4-5 companies for a 1-hour session. These sessions were met again with enthusiastic questions from the Changsha businesses feverishly trying to understand what their companies had to do to position themselves as credible outsourcing alternatives. The openness and desire to absorb the information provided by all delegates continued to support the humble approach these companies are taking to learn and ensure success. The day was closed with a formal dinner hosted by the Deputy Mayor of Changsha and all the delegates. A beautiful and fascinating experience of local Chinese culture that welcomed and thanked the delegates to the Changsha City. Local Chinese dinner formalities, toasting and cuisine was provided with full fanfare.

Observations from China

Day 3: SITE VISITS. SEEING & BELIEVING

Early Saturday morning the complete delegation boarded a bus and was taken to three corporate development parks to visit a various range of businesses locations. There is no doubt that the construction of these corporate business parks are taking on the size and scale that would impress any business executive. The Chinese government is certainly investing in a way reminiscent to the movie Field of Dreams embracing the â&#x20AC;&#x153;if they build it, they will comeâ&#x20AC;? approach to the global market. The one corporate park we visited that gave us a view of their smallscale model (about 50ft X 50ft) of the future corporate park, reported having over 1000 new companies entered their current development in 2011. This corporate park (1 of approximately 20+ like it) are being built in the surrounding area much like a speculative residential subdivision, these corporate parks have business lots open and will build to client exact size and internal specifications on a wide range of square meters/feet. We also visited more remote parks that are on the outskirts of the city and have not had the infrastructure of residential, commercial support services and public transportation brought to those areas but are clearly being readied for the future. All delegates were impressed by the tour of the Green Apple Company who specializes in document scanning and eBook creation services. We walked into a converted exhibit center with

over 1,300 work stations converting publications from old printed formats to eBook and electronic formats in over 6 different languages. The Green Apple Company warmly greeted the delegates and professionally presented the efficiency and technology that enables them to deliver this process on a faster and more efficient process than other outsourced markets. Finally, delegates were given a tour of the city along with a visit to a local marketplace and capped off with a local governmental visit to the Riverside Palace for the weekly public riverside fireworks display and a spectacular show of traditional Chinese music, dance, acrobatic and vocal entertainment spanning the cities 3,000 year history. SUMMARY

This 3-day conference was coordinated by Royal Du of Clochase and his team in concert with the Commerce Bureau of Changsha. The attention to detail and optimization of content was expertly executed. The services provided to ensure that all delegates were not only provided the knowledge they came to seek but to experience the rich and exciting culture of Changsha was perfectly executed. If you are interested or have a market interested in Chinese business, we highly recommend you look to put this conference on your 2013 calendar. www.globalizationtoday.com

WHAT’S HAPPENING AT THE IAOP

IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP IAOP

CONFERENCES & EVENTS THE 2012 LATIN AMERICA OUTSOURCING SUMMIT October 1-2 at Hotel Unique in Sao Paulo, Brazil

Building on the momentum of the first Latin America Outsourcing Summit, held in Colombia in 2011, which drew over 300 outsourcing professionals, we are excited to announce The 2012 IAOP Latin America Outsourcing Summit, which will bring the thought-leadership and global network of the International Association of Outsourcing Professionals® (IAOP®) together with leaders from across the Latin American business community. An exceptional opportunity for individuals and organizations involved in 48

GlobalizationToday June - July 2012

WHAT’S HAPPENING AT THE IAOP MEMBERSHIP Membership in IAOP provides access to an extensive array of services, and just as importantly distinguishes organizations and professionals as leaders in the field of outsourcing. 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.

MEMBER SERVICES IAOP membership provides access to a wide range of services designed to help you and your organization improve outsourcing outcomes. Many of these services are included as part of 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.

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

• Globalization Today - The official publication of 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.

PROVIDER/ADVISOR CORPORATE MEMBERSHIP Outsourcing service providers and advisory firms should join IAOP as Provider/Advisor Corporate Members. This membership provides the same organization-wide access to 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.

outsourcing as customers, providers, and advisors with operations in the region or looking to do business in this exciting region to both understand and leverage the explosion of outsourcing taking place across this part of the world. With Brasscom as our partner, the support of our members in Latin America, and São Paulo, Brazil as the backdrop, this event will unlock the power of outsourcing for all of Latin America and for the global community of outsourcing professionals. For information on sponsoring or speaking, go to www.IAOP.org/LATAM.

• IAOP’s Knowledge Center - This online repository houses more than 1,000 articles, including chapter meeting presentations, conference proceedings, industry whitepapers, research articles and more. • Global Chapter Network - Through its active and expansive chapter network, IAOP members can share their expertise and find knowledge on best practices for specific industry segments, topics and geographic areas within outsourcing. • Conferences & Events - IAOP hosts the world’s best-known and most highly-respected executive conferences on the topic of outsourcing, including The Outsourcing World Summit®. • Outsourcing Professional Certification Frameworks (OPCF) - RIAOP’s trainings and certifications are the industry’s de facto. Members receive substantial discounts. • Value Health Check Survey - This web-based diagnostic tool provides outsourcing customers and service providers with rapid insights to realizing outsourcing value. • NEW! Global Supply Risk Monitor - A unique web-based product that enables clients to monitor, predict and manage the various risks in their services supply chain (captive centers and outsourced services such as ITO, BPO, KPO etc) across countries, cities and suppliers, in real-time. • BestOutsourcingJobs.com - Companies seeking the best talent for outsourcing jobs, as well as professionals looking for employment opportunities, will benefit from this IAOP member service. For more detailed information on each of these member services, visit www.IAOP.org/MemberServices.

www.globalizationtoday.com

WHAT’S HAPPENING AT THE IAOP

CALENDAR OF EVENTS

IAOP CHAPTER MEETINGS

CORPORATE & PROFESSIONAL DEVELOPMENT GLOBAL OUTSOURCING TRAINING FROM IAOP

IAOP Training- Maintain Your Competitive Advantage •

JUNE 1

SOUTH AFRICA CHAPTER MEETING

•

JUNE 14

BRUSSELS CHAPTER MEETING

•

JUNE 26

UK & IRELAND CHAPTER MEETING

•

JUNE 28

AUSTRALIA CHAPTER MEETING

•

JULY 26

CHICAGO CHAPTER MEETING

The calendar is frequently updated – to stay current, check IAOP’s website for details at www.IAOP.org/calendar. IAOP Professional Members may attend an unlimited number of chapter meetings. IAOP also offers complimentary Associate Membership which allows non-members the opportunity to attend up to two chapter meetings as IAOP’s guest. Go to www.IAOP.org/chapters for more information and to register. THE 2013 OUTSOURCING WORLD SUMMIT®

February 18-20, 2013 | JW Marriott Phoenix Desert Ridge | Phoenix, Arizona

Save the Date! Register by 5/31 and get $400 Off PLUS a Free Room Night!

97% of 2012 Summit delegates rated The Outsourcing World Summit ‘good to excellent’ when compared to other industry events. We aren’t surprised. Every year, hundreds of outsourcing executives from across the industry and around the world who are seeking the very latest insights and ideas attend the Summit. Educational sessions deliver specific actionable solutions to current challenges faced by experienced professionals. Case studies feature actual experiences and the lessons learned, and discuss new ideas, approaches and opportunities. The Outsourcing World Summit has become the event that executives attend each and every year to stay informed of the latest developments affecting the outsourcing industry and their profession. For more information and to register, visit www.IAOPorg/Summit. 50

GlobalizationToday June - July 2012

• Outsourcing Professional Course Catalog: Here you will find trainings offered by IAOP such as its COP Master Class, Outsourcing Governance Workshop & Service Provider Business Development Workshop along additional trainings pre-approved for certification. • 2012 COP Master Classes Currently Accepting Enrollment • JUNE 11-14: ASIA E-UNIVERSITY, KUALA LUMPUR • JUNE 25-28: KINGBRIDGE CONFERENCE CENTRE, TORONTO, CANADA • JULY 23-26: ASIA E-UNIVERSITY, KUALA LUMPUR • SEPT 17-20: ASIA E-UNIVERSITY, KUALA LUMPUR • SEPTEMBER 17-20: INVERNESS HOTEL AND CONFERENCE CENTER, DENVER, CO • SEPTEMBER 24-26: BREUKELEN, THE NETHERLANDS • SEPTEMBER 26-28: HONG KONG MARCO POLO HOTEL CERTIFICATION FROM IAOP

IAOP certifications are now available at every step in the career pathway. Register for our free “Ins & Outs of Certification” webinar at www.IAOP.org/ COP/Webinar to learn more about the following certification options: • Certified Outsourcing Specialists • Certified Outsourcing Professionals

For more information on any of IAOP’s Corporate & Professional Development programs email copprogramservices@iaop.org

PROFESSIONAL DEVELOPMENT RESOURCES AVAILABLE

• www.iaopbookshop.com • 10-Question Quiz: Do You Have What it Takes to Become Certified at www.IAOP.org/becomeCOP Outsourcing Professional Body of Knowledge

WHAT’S HAPPENING AT THE IAOP

CERTIFICATION

WHY CERTIFICATION WILL BENEFIT YOU

IAOP, through our Outsourcing Professional Certification Framework (OPCF) is addressing 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.

As the management practice of outsourcing continues to mature, achieving a professional certification will ensure that outsourcing professionals are capable of meeting the design, implementation and management demands of projects across the globe. The use of outsourcing within organizations has increased as companies are starting to see that to build a bigger and better structure within, outsourcing is one of the most important pieces. Be prepared to take on the gravitational changes to outsourcing by becoming a Certified Outsourcing Professional or Associate Certified Outsourcing Professional. Don’t just follow the trend; lead your company to success by initiating it.

IAOP certifications are now available at every step in the career pathway: Certified Outsourcing Specialists

• Certified Outsourcing Specialist-Transaction Processing - (COS-TP) • Certified Outsourcing Specialist-Finance & Accounting - (COS-F&A) • Certified Outsourcing Specialist - Human Resources - (COS-HR) • Certified Outsourcing Specialist - Foundation Principles (COS-FP) New!

Certified Outsourcing Professionals

• Associate Certified Outsourcing Professional (aCOP) • Certified Outsourcing Professional - (COP) • Certified Outsourcing Professional - Governance (COP-GOV) New! • Certified Outsourcing Professional - Business Development (COP-BD) New! • Certified Outsourcing Professional - Human Resources - (COP-HR) Currently Under Development

For more information on any of IAOP’s programs and services, email info@iaop.org. FREE WEBINARS: THE INS & OUTS OF CERTIFICATION

Want to understand your certification options and how one of IAOPs designations can benefit you and your company? Regular complimentary webinars are held on COP Certification/Master Class, COP Recertification, and the OPCF Framework of Certifications. Companies can request a special webinar for their teams. Space is limited and preregistration is required. All attendees will receive a special gift from IAOP. Recorded versions are also available for 24/7 replay. Contact Courtney Coon at courtney.coon@iaop.org for dates and registration information. For more information on any of IAOP’s programs and services, email info@iaop.org. www.globalizationtoday.com

WHAT’S HAPPENING AT THE IAOP

10-QUESTION QUIZ: FIND OUT IF YOU HAVE WHAT IT TAKES TO BECOME CERTIFIED

Are you prepared to successfully manage outsourcing initiatives? Do you have the knowledge and experience needed to join the industry’s most elite Certified Outsourcing Professionals? Begin your journey to earning one of IAOP’s most distinguished designations by testing your outsourcing professional skills with IAOP’s 10 question quiz at www.IAOP.org/Quiz. Once you have completed the quiz email it to copprogramservices@iaop.org for your results. Those who submit the quiz will receive a complimentary electronic sample of the Outsourcing Professional Body of Knowledge (OPBOK) from IAOP partner Van Haren Publishing. THE COP DIRECTORY IS YOUR GUIDE TO THE MOST QUALIFIED OUTSOURCING PROFESSIONALS!

Want to see who the COPs are in your company? Looking to work with the industry’s most elite professionals? Head on over to the NEW COP 52

GlobalizationToday June - July 2012

Directory where you can search by Name, Country and Company! For current COPs this is a great way to keep your information up to date at all times. Just login to your MY IAOP and enter your updated information into your Member Profile. It will automatically update in the directory. Check out the new COP Directory: www.IAOP.org/COPDirectory. PROFESSIONAL DEVELOPMENT RESOURCES AVAILABLE

No matter what industry you are in, IAOP has resources available for all outsourcing professionals. For the latest titles from IAOP, ITSqc and others please visit www.iaopbookshop.com, and get 15% off of any title you order. Also new from IAOP are titles from the American Bar Association found at the IAOP/ABA Legal Bookstore (www.ababooks. org/affiliate/iaop). For more information on any of IAOP’s programs and services, email info@iaop.org.

IAOP membership 85% of IAOP members credit IAOP for improved outsourcing outcomes at their organizations

MEMBER SERVICES KNOWLEDGE CENTER

Search more than 1,000 articles, studies, white papers, reports, and conference proceedings in the industry’s premier repository.

CHAPTERS

Share your expertise and gain knowledge on best practices for specific industry segments, topics and geographic areas.

G L O B A L I Z AT I O N T O D AY

Read about the latest trends, research and hot topics in the official magazine of IAOP.

VA L U E H E A LT H C H E C K S U R V E Y

Optimize the health and value in your existing outsourcing and/or shared service center relationship with this diagnostic tool.

G L O B A L S U P P LY R I S K M O N I T O R S M

Monitor, predict and manage various risks in your services supply chain across countries, cities and suppliers in real-time.

BESTOUTSOURCINGJOBS.COM

Find the industry’s best talent or your next career.

IMPROVING OUTSOURCING OUTCOMES BY CONNECTING YOU TO THE RESOURCES YOU NEED.

IAOP® is the global, standard-setting organization and advocate for the outsourcing profession. With more than 110,000 members and affiliates worldwide, IAOP is the leading professional association for organizations and individuals involved in transforming the world of business through outsourcing, offshoring, and shared services. A Global Community IAOP has members in nearly 50 countries. Each member has direct, online access to each other and to IAOP’s entire portfolio of services, including its vast chapter network, regional-level events, certifications and corporate and professional development programs. MEMBERSHIP Customer Corporate Membership provides organization-wide access to the association’s research, training, certification and networking programs — all designed to help companies

International Association of Outsourcing Professionals® (IAOP®)

Tel +1.845.452.0600

Fax +1.845.452.6988

achieve better business results through outsourcing. Provider/Advisor Corporate Membership provides the same organization-wide benefits of Customer Corporate Membership, but also includes member-only sponsorship opportunities that serve the marketing and business development needs of these companies. 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.

To learn more about IAOP membership or to become a member, visit www.IAOP.org.

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

SCRAPBOOK

Global Outsourcing Social Responsibility Impact Award (GOSRIA) IAOP and Information Services Group (ISG) presented their inaugural Corporate Social Responsibility award to CBRE Group, Inc., during the ISG Americas Sourcing Industry Conference, May 24th. IAOP’s CEO, Debi Hamill, and Director of Corporate and Professional Development, Pam O’Dell, were on hand at the ceremony. The award, established by IAOP and ISG, recognizes service provider excellence in Corporate Social Responsibility (CSR). The winner demonstrates exemplary leadership in, and ongoing commitment to, activities that foster community involvement, fair operating and labor practices, respect for human rights, attention to environmental impacts, consumer issues and good governance. CBRE, a global commercial real estate services company headquartered in Los Angeles, was selected as the recipient for 2012 based on achievements such as becoming the first carbonneutral global real estate outsourcing firm, markedly increasing corporate and employee giving to charitable and community organizations, and significantly expanding and improving its ethics and compliance program. CBRE was selected from among applicants for the IAOP 2012 Global Outsourcing 100®. In addition, ISG will make a $5,000 donation in the name of CBRE to Rebuilding Together, the nation’s leading non-profit organization providing critical home repairs, modifications and improvements for America’s low-income homeowners. CBRE supports Rebuilding Together through a corporate partnership program. 20

GlobalizationToday December 2010

Global Human Chapter Webinar The challenges of managing a global workforce are growing more daunting by the day. Your business is moving faster than ever before requiring unprecedented flexibility in scaling teams up and down in order to meet company goals. Regulators are paying closer attention to worker classification as they try to wrap their own heads around these more flexible workforces. Adaptations you made over the last decade to your services supply chain might be reaching the limits of further meaningful cost savings or efficiency gains. In the face of these challenges, a new solution is demanded to keep your company accelerating, but it’s difficult to see what it might look like. Today, thanks to The Human Cloud, you have that solution. The Human Cloud is a global pool of pre-vetted, talented professionals available whenever a company needs work done. This new workforce is specialized, independent and accessible on-demand. It’s a fully compliant solution that can deliver both flexibility and high level talent. Imagine that your team identifies a problem and can hire a qualified statistician from England or an expert toxicologist in Australia on a project-to-project basis -- that same day. The confluence of several factors – the world going online, improvements in communication tools, successful adoption of cloud computing, and companies’ demand for speed – has made it possible. Now companies can transform their supply chains to reduce costs, gain agility and improve quality. To learn how companies implementing this model are achieving inspiring results – 50%+ cost savings, 50%+ faster project cycles, and a 75%+ reduction in time to hire – join us on July 26, 2012 at 12 noon EST for a webinar where Elance, the world’s leading on-line employment platform will share case studies and best practices. Please register for this free webinar at www.IAOP.org/Chapters/GHC.

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

www.IAOP.org/OPCF.

I’M A COP

*Expect better, more consistent results with me.