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Thriving in the As-a-Service Economy | Research Strategy Community

Phil Fersht

Founder and CEO, HfS Research

@pfersht

Where are we, what’s important and how do we get there?

Web www.hfsresearch.com

Blog www.horsesforsources.com

Email [email protected]

© 2015 HfS Research Ltd.

Overview:• 20 years’ business experience in the global IT and business process

outsourcing and shared services industry

• Industry analyst, author, speaker, strategist and blogger

• Advised on 100’s of global IT services, BPO and shared services engagements

• Facilitates the largest global network of enterprise services ad operations professionals

Career Experience:• Practice Lead, IT Services & BPO Research, Gartner, Inc

• Global BPO Marketplace Leader, Deloitte Consulting

• Consulting Practice Lead, IDC Asia/Pacific

• IT Markets Practice Lead, IDC Europe

Education:• BS with Honors in European Business & Technology, Coventry

University, United Kingdom

• Diplôme Universitaire de Technologie in Business & Technology from the University of Grenoble, France

[email protected]

Phil Fersht, Chief Executive Officer, HfS Research

mailto:[email protected]


Unbridled Opinion… Simply Calling It How It Is

www.horsesforsources.com

© 2015 HfS Research Ltd. Proprietary │

…With a More Serious Side Too!www.hfsresearch.com

© 2015 HfS Research

Source: HfS Research GBS and Outsourcing Studies 2013-2015Sample: n=704 Major Enterprises

38%

36%

35%

27%

40%

47%

42%

42%

48%

45%

52%

38%

37%

46%

46%

9%

12%

13%

33%

21%

14%

21%

23%

18%

22%

21%

35%

42%

37%

39%

53%

52%

51%

40%

39%

39%

37%

35%

34%

33%

27%

27%

21%

17%

15%

Sales

Analytics

Marketing

Payroll

Legal

Procurement

Supply Chain and Logistics

Industry-specific Processes

Human Resources

Customer Service

Finance and Accounting

Facilities Management

Print & Mail Operations

IT application maintenance & development

IT and Network infrastructure support

Shared Services Outsourced In-house (de centralized)

Outsourcing is still not the core delivery medium across

most enterprises

© 2015 HfS Research

Q. How will your Offshore Investments Change in 2015? (Outsourcing)

Q. How will your Offshore Investments Change in 2015? (Shared Services)

-13%-5% -5% -4% -3% -3% -5%

31% 29% 28% 26% 21% 18% 17%

-20%

-10%

0%

10%

20%

30%

40%

ApplicationDevelopment &

Maintenance

Finance andAccounting

ITInfrastructure

Industry-specificOperations

Procurement HumanResources

CustomerService

-9% -7% -6% -2%-3% -3% -4%

18%26%

19% 17% 20% 20% 16%

-20%

-10%

0%

10%

20%

30%

ApplicationDevelopment &

Maintenance

Finance andAccounting

ITInfrastructure

Industry-specificOperations

Procurement HumanResources

CustomerService

While offshoring continues to accelerate across

business functions in 2015…

Decrease Increase

Source: 2014 State of Industry Study, 2014. HfS Research in Conjunction with KPMG (Sample 312 Enterprises)


I. The Optimum Operating Model

Outsourcing Shared ServicesGBS BPaaS/SaaS/IaaS

Crowdsourcing

II. Empowering Talent to Make it PossibleCapabilities over Skills Defining

Outcomes Creativity Data Science

IV. Technology to Augment Knowledge Labor Digitization & Robotic Automation

Analytics Mobility Social Media Cognitive Computing

III. A Burning Platform for ChangeGlobalization of Labor High-growth

Emerging Markets Disruptive

Business Models Consumerization

The Foundations of today’s

Sourcing Industry

Tools/Infrastructure Governance

Agility Collaboration One-to-Many Outcome Focus

Plug-and-Play Services


The Eight Ideals of the As-a-Service Economy

LEGACY OUTSOURCING AS-A-SERVICE ECONOMY

Resolve problems by lookingfirst at the process

1. Design ThinkingGenerate creative solutions by understanding the business context

Complex, often painful technology and process transitions to reach steady state

2. Business Cloud “Plug and Play” business services

Fragmented processes requiring manual interventions, multiple technologies

3. Intelligent Automation Blending of automation, analytics, and talent

Ad-hoc analysis on unstructured data with little business context

4. Intelligent DataReal-time applied analytics models, techniques, and insights from big data

Governance staff manage contracts and service levels

5. Brokers of Capability Manage towards business outcomes, interpreting data, seeding new ideas

Reactive, post-event fixes based on threats based on protecting corporate assets

6. Holistic SecurityEnabling consumer trust/engagement; proactive emphasis on integrity & privacy

Legacy technology investments drain budgets to remain functional

7. Write Off LegacyUse of platform-based services makes many tech investments redundant

Pricing and relationships based on cost, effort, and labor

8. Intelligent EngagementPricing and relationships based on expertise, outcomes, and subscriptions

Simplification


Today’s Co-Conspirators

John AshworthVP Finance Transformation and Systems at Pearson plc

Steve TurpieDeputy ChairmanWest Suffolk NHS Foundation Trust


16%

8%

37%

21%

47%

62% 10%

SVP & Up

VP &Below

Absolutely critical Critical Significant Insignificant

Leadership has the desire to drive the change, not the

operational layer…How significant do you see the “As-a-Service Economy” for your organization?

Source: "Ideals of As-a-Services" Study, HfS Research 2015

Sample: Enterprise Service Buyers = 178


Decision-makers willing to dump legacy service provider

relationships as Design Thinking emerges as the realistic strategy

61%

61%

44%

44%

39%

44%

25%

41%

36%

28%

Invest in effective analytics tools & skills

Replace your existing (legacy) service provider(s)with "As-a-Service" driven providers

Accomplish creative problem solving/"DesignThinking"

Write-off legacy IT investments and move straightinto cloud delivery of processes supported by As-a-

Service partner(s)

Hire new operations talent to redesign processes

% Significant Impact

SVP & Up

VP & Below

How much impact would taking the following actions help you reach your desired “As-a-Service” end-state, if you were to make them today?




Many senior leaders have negative view of providers’

willingness to change the legacy model

56%

47%

44%

26%

22%

17%

28%

21%

19%

29%

22%

21%

Few available "plug and play" services

Lack of willingness from our service provider(s) tocannibalize their existing revenue models

Lack of support from our service provider(s) to sharerisks/gains with us

General inertia in our organization to change from thestatus quo

Lack of trust in service providers

We don't have the talent inhouse to evolve the currentmodel

% Highly Significant

SVP & Up

VP & Below

How significant are the following obstacles holding back your enterprise’s move to the “As-a-Service Economy”?




4%

3%

2%

36%

26%

27%

43%

32%

54%

11%

19%

15%

7%

19%

2%

<$1B

$1B - $10B

>$10B

We are already there Within 2 years Within 5 years Within 10 years Never

While 7 out of 10 major enterprises are really just

paying lip service…How quickly will your core enterprise processes be delivered “As-a-Service”?




Two-Thirds of Enterprises Lack “As-a-Service”

Skills…

Source: HfS Research State of Industry Study 2014, conducted in conjunction with KPMG(Sample 312 Enterprises)


The Capabilities to get us to the As-a-Service Economy will

take time to develop…

As-a-Service Economy

< 3 years

Influencing senior executives

Design Thinking

Use of automation as first building blocks to decouple labor from routine service delivery

3 – 6 years

Real-time Analytics Modeling

Intelligent Robotic Automation

Defining & impacting value beyond cost

> 6 Years

Augmenting Labor with Artificial Intelligence

Identifying new ways to drive cost reduction & value

Legacy Simplification


1) How much IMPACT would each Ideal have on your organization if it was in place today?

2) How much PROGRESS do you expect your organization to make in achieving each As-a-Service Ideal end state in the next two years, based on your leadership’s current intentions and concrete investment plans?

3) How SIGNIFICANT would be the impact of your organization NOT investing in each As-a-Service Ideal?

4) How much to you care PERSONALLY about this, or are you more than content to keep the lights on and avoid all the disruption “noise”?

Workshop task for today…


The Eight Ideals of the As-a-Service Economy

LEGACY OUTSOURCING AS-A-SERVICE ECONOMY

Resolve problems by lookingfirst at the process

1. Design ThinkingGenerate creative solutions by understanding the business context

Complex, often painful technology and process transitions to reach steady state

2. Business Cloud “Plug and Play” business services

Fragmented processes requiring manual interventions, multiple technologies

3. Intelligent Automation Blending of automation, analytics, and talent

Ad-hoc analysis on unstructured data with little business context

4. Intelligent DataReal-time applied analytics models, techniques, and insights from big data

Governance staff manage contracts and service levels

5. Brokers of Capability Manage towards business outcomes, interpreting data, seeding new ideas

Reactive, post-event fixes based on threats based on protecting corporate assets

6. Holistic SecurityEnabling consumer trust/engagement; proactive emphasis on integrity & privacy

Legacy technology investments drain budgets to remain functional

7. Write Off LegacyUse of platform-based services makes many tech investments redundant

Pricing and relationships based on cost, effort, and labor

8. Intelligent EngagementPricing and relationships based on expertise, outcomes, and subscriptions

Simplification

Thriving in the As-a-Service Economy | Research Strategy Community

Phil Fersht

Founder and CEO, HfS Research

@pfersht

Where are we, what’s important and how do we get there?

Web www.hfsresearch.com

Blog www.horsesforsources.com

Email [email protected]

where are we, what’s important and how do we get there? · where are we, what’s important and...

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