Журнал iaop ноябрь-декабрь 2014

TRENDS & FORECASTS

PULSE FAST COMPANY

HOT SPOTS

FRESH FACES

Managing with Metrics p14-19

Countries Undergoing Change p36-38

Dave Brown’s View from the C-Suite p40-45

ISSUE 14 | NOV/DEC 2014THE MAGAZINE DRIVEN BY & FOR THE OUTSOURCING PROFESSIONALPUBLISHED BY WWW.IAOP.ORG

PLUS Photos from China Week and Asia-Pacific Outsourcing Summit p52-55

FOR 2015P24-34

PULSE ISSUE 14 | NOVEMBER/DECEMBER 2014

T R E N D S & F O R E CA S T 2 0 1 4 I S S U E

HOT SPOTSVietnam and Ukraine

Face Challenges p36-38

It’s a Whole New Game in 2015 p24-34

TRENDS & FORECAST KPMG’s Dave Brown and

his Canadian Flair p40-45

C-SUITE

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

Best of the Knowledge Center:- Managing with Metrics ............................................................................ p14-19- Evolving BPO Site Selection Considerations ......................................... p20-22

Financial Services and OCC Regulations ................................................ p10-11

THE MAGAZINE DRIVEN BY & FOR THE OUTSOURCING PROFESSIONAL

VIEW FROM THE C-SUITE

COUNTRIES GOINGTHROUGH CHANGE

4 PULSE Nov/Dec 2014

T R E N D S & F O R E CA S T 2 0 1 4 E D I T I O N

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

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

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

Taking the Pulse .......................................... p7

The Beat: News & Commentary ................. p8

The Sandbox ............................................. p12

“O” Book Club .......................................... p13

Joining IAOP: New Members & Benefits ..... p46-47

Pulse Professional ........................................ p48-49

Chapter Roundup - Spotlight on the Charlotte Chapter ................ p50

Pulse Flash: - China Week ............................................... p52-53- Asia-Pacific Outsourcing Summit .............. p54-55

PULSE FLASH: 2014 ASIA-PACIFIC OUTSOURCING SUMMITP 5 4 - 5 5©

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PULSE Nov/Dec 2014 5

T R E N D S & F O R E CA S T 2 0 1 4 E D I T I O N

For our annual Trends & Forecast issue,I have the opportunity to put on my shades and look at what may lie ahead for outsourcing. While the industry view can at times be cloudy, one thing is clear: Change will continue to be a constant as it has been over the last 10 years.

There are many models out there that we expect to come to the forefront in various degrees – from the ongoing influence of CSR and impact sourcing, to delivery models focused around captive centers, global business services, sourcing and procurement.

In this issue you’ll read some of the top predictions from our industry’s leading thinking around such important themes as: automation, SMAC, technology, governance, regulations, talent and more. Please see our cover story on what to look for in 2015 to stay ahead on the industry, as well as our View from the C-Suite interview with KPMG’s Dave Brown who talks about some of these models.

In this Pulse, you’ll find coverage of some of the events that have kept IAOP out on the road. IAOP Chairman Mike Corbett and I had the pleasure of joining members in Charlotte, N.C. to launch our new

chapter for this growing area. What a high level of engagement we saw! Many thanks to our chapter chairs for their hard work behind the scenes in starting this new chapter, which we expect will have tre-mendous involvement. See our Chapter Spotlight story for more.

IAOP’s 4th annual China Week also was a great demonstration of our continued growth and reach in this important region. With four stops over a week, the event really showcased the value and impact of our chapter network. Many thanks to our chapters in Beijing, Qingdao/Shandong, Nanjing and Shanghai for their involvement. For photo coverage, see Pulse Flash.

Also in Flash, you’ll find highlights from the Asia Pacific Outsourcing Summit in Singapore. A shout out to our speakers, panelists, chapters and partner, Outsourcing Malaysia, that came together to deliver a valuable conference for the industry. My special thanks to Ian Ferguson, Lead Co-Chair of IAOP’s Singapore Chapter, and Co-Chairs Geoffrey Lang and Tony Rawlinson for all of the hard work put in to make both the event and the chapter a success.

And off we go to Latin America where

we’ve partnered with the Inter-American Development Bank (IDB) for the Outsource2LAC event, Nov. 11-13, in Guatemala City.

In our other regular features, Best of the Knowledge Center and Sandbox look at the importance of data analytics, a growing trend. Also in the Knowledge Center, we explore the geopolitical realities of BPO site selection and our Hot Spot takes us to three countries undergoing change. The Vertical section looks at monitoring for OCC regulations.

In all our predicting, another point is clear to me: IAOP will continue its leadership in advocating, setting the standards and charting the course for this amazing industry that we are all involved in. Thanks to all our members for their involvement over the past year and for joining with us as we move forward in 2015.

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

DEBI HAMILLCEO IAOP

While the industry view can at times be cloudy, one thing is clear: IAOP will continue its leadership in advocating, setting the standards and charting the course for this amazing industry that we are all involved in.

TRENDS & FORECASTS ISSU

E

CEO’S DESK


N OV / D E C 2 0 1 4 I S S U E : 1 4

PUBLISHER

IAOPDebi Hamill, CEO EDITOR-IN-CHIEF

Sandy [email protected]

MANAGING EDITORJag Dalal, [email protected]

PULSE BLOG EDITORKate [email protected]

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

CREATIVE DIRECTORPamela Zarrella brandingwithpam.com

EDITORIAL BOARDMichael F. Corbett, Chairman, IAOP

Neil Hirshman, COP, Partner, Kirkland & Ellis

Eugene Kublanov, COP, Managing Director, KPMG

Curtis Bragg, Vice President, Strategic Integration, Business & Industry Facility Services, Aramark

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

ADVERTISING Scott [email protected]+1.845.452.0600 ext. 103

CONTRIBUTIONSPULSE welcomes contributors! Please email: [email protected]

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

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

PULSECONTRIBUTORS

JAG DALAL COP-GOV - World-recognized authority on outsourcing, IT management

and managing for high results. Founder and president of JDalal Associates, LLC and

IAOP’s Chief Advisor, Thought Leadership. Cooking, golfing and walking are his pastimes.

JON BROWNING President and founder of Global BPO Solutions. Former Microsoft

director for customer care outsourcing strategy who co-founded the Contact Center

Buyers Forum. Likes adventure travel with his family and playing blues piano.

ATUL VASHISTHA COP – Globally recognized as a leading expert on globalization,

outsourcing and governance. Founded Neo Group in 1999 and is the author of three

books. Enjoys mentoring entrepreneurs, travel, paddle boarding and wine.


BLOG SPOT

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

TAKING THE

PULSE

To contribute to these stories, suggest other stories or comment, contact: [email protected]

LETTERS TO THE EDITOR

Send Pulse letters to [email protected].

COMING NEXT ISSUE IN PULSE: The 2015 Outsourcing World Summit Issue. Pick up your print issue in Phoenix and also read it online. It’s IAOP’s 10th birthday. Plus, read about the latest research findings, UK and Ireland in the Hot Spot, and more in this special annual Summit preview issue.

>

TRENDING LINKEDIN TOPICS

1) 5 Reasons Outsourcing Fails

2) The Age of the Ubiquitous Customer: Can You Afford Not to Provide Omni-Channel Support?

3) Managing Better: 7 Tips for Bringing Virtual Teams Together

[WE WELCOME GUEST BLOGGERS!Join the dialogue at iaoppulseblog.blogspot.com

“Whatever you’re using to achieve cost savings today won’t be able to deliver the same ROI indefinitely – the geo-political environment is changing, business operations are changing, values are changing and technology is changing. If everything outside an organization is changing, it stands to reason that the organization will have to change as well – but how?” – from 3 Emerging Trends in Procurement Technology by guest blogger, Patricia Dreghorn, Global Technology and Strategy Director for Xchanging

“More than a buzzword, digital disruption is creating unique opportunities for businesses looking to adopt a sustainable strategy for customer engagement. As new digital technologies emerge, industries must respond in turn, adapting and innovating in order to drive business outcomes. With a firm grasp on how to employ technologies to advance business objectives, companies can increase their reach, bring products to market faster, and bridge the gap between limited resources – in effect, surviving, and even thriving, through disruption.” – from Digital Disruption: The Impact on Global Talent by guest blogger, Atul Vashistha, COP, CEO of Neo Group

SHE’S GOT TALENTCONGRATULATIONS TO ARLENE ELK VMO-ITO Project Lead, PPG Industries, Inc. who won aniPAD mini for taking the IAOP/KellyOCG Talent Survey. See our next issue of Pulse for the survey results.


Opportunities exist for providers who find unique niches in everyday life around us. Outsourcing college sports marketing and mining data retailers gather at the supermarket represent two verticals with growth potential that IAOP Chief Advisor of Thought Leadership Jag Dalal, COP-GOV, dishes about this issue.

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THE NEWS HEADLINES THE IAOP DISH

EQUALS POTENTIAL GAINS FOR PROVIDERS This interesting article points to the “undeclared” value of a company asset called “data.” It shows the value of data at companies ranging from Google to Kroger grocery stores. In some instances, this value is actually greater than their other “reportable” assets, such as buildings and equipment.

Data analytics is the “killer app” for the coming decade and companies are trying to find the magic bullet that will allow them to be the first with it. Data analytics or data mining is a “hidden” gem for outsourcing service providers that I believe is highly underused. BPO outsourcing providers have access to information and transactions that can allow them to mine the data and provide higher level value to their customers. This is a topic Dalal will discuss with COPs at the Outsourcing World Summit, Feb. 18, in Phoenix, Az.

AN ASSET THAT’S HARD TO MEASURE

OCT. 12, 2014 WALL STREET JOURNAL, WHAT’S ALL THAT DATA WORTH?

Corporate holdings of data and other “intangible assets,” such as patents, trademarks and copyrights, could be worth more than $8 trillion, according

to an economist at the Federal Reserve Bank of Philadelphia. That’s roughly equivalent to the gross domestic product of Germany, France and Italy combined.

These intangibles are becoming a more important part of the global economy. The value of patents has become a major driver of both mergers and lawsuits for technology giants like Google, Apple and Samsung Electronics.

The Beat / NEWS & COMMENTARY AS COVERED BY JAG DALAL

TREND CAN BE A WINNER The chill is in the air in the Northern Hemisphere and the joy of spring awaits the Southern Hemisphere. It means it is sports season everywhere – international cricket in India, baseball championships in the U.S., UEFA qualifiers in the Europe and friendly soccer matches in South America.

Many universities have outsourced traditional back office operations, such as real estate management, mail distribution, HR and IT. This in-depth research paper shows how colleges have now outsourced their marketing.

It has some very interesting observations about “governance” and “good contracting,” which are all too familiar to us in this profession. Read this report and dial in your favorite team and see yet another outsourcing opportunity.

OUTSOURCING COLLEGE SPORTS MARKETING

FEB. 11, 2014 THE SPORT JOURNAL, OUTSOURCED MARKETING IN NCAA DIVISION I INSTITUTIONS: THE COMPANIES’ PERSPECTIVE

This study found more and more collegiate athletic departments have adopted outsourcing as a strategy which

uses their corporate partners, such as State Farm, Burger King or Verizon Wireless, to help them earn additional revenue in exchange for advertising at the sporting events.

A growing trend for major NCAA Division I schools is to outsource its marketing efforts to an outsourced marketing company that specializes in the sales of inventory, such as commercials on radio broadcasts or coaches’ television show, corporate hospitality at home sporting events, signage at athletic facilities and more.

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FINANCIAL SERVICE FIRMS USE SHARED APPROACH TO MONITOR SUPPLIERS AND MANAGE RISK By: Atul Vashistha, COP, CEO, Neo Group

Utilities work well when there is a common challenge, little or no market differentiation for solving it, a benefit in applying scale and expertise, and “network value” in solving the problem beyond a single user’s needs. Metcalf ’s Law, applied originally to communications, roughly states that the value of a network increases by an exponential value to each device on the network. One fax machine was worthless. The higher network value in meeting compliance issues is driven by the leveraged use of information in that network.

BANKS AND MORTGAGE COMPANIES USE COMMON APPROACH It’s not without precedence. More than a decade ago, the retail bank giants Bank of America, Wells Fargo, JPMC, Capital One and BB&T saw and understood the value of a common utility for check fraud and Early Warning was born. It serves not only the needs of its founding banks, but those of hundreds of other banks, far more efficiently and expertly than any one bank could achieve alone. In the mortgage arena, MERS successfully performs servicing rights tracking for hundreds of mortgage companies where there is no competitive advantage in the companies doing it themselves. In Trade Settlement and other areas, DTCC has provided utility value to its members since the 1970s. And, more recently, MarkIt and Genpact teamed up to provide what essentially is a KYC utility, with an impressive ‘starter kit’ of bank customers, including Deutsche Bank, UBS, Citi and HSBC.

Effectively monitoring global services brings enormous business benefits to companies that do it and do it well. For financial services firms, continuous supplier monitoring can help manage risk and meet regulatory requirements. Companies that monitor their suppliers and supply locations are more apt to understand, plan for and avoid the risk of disruption or failure. Such organizations can frequently spot opportunities that arise among locations or suppliers. These companies typically make better-informed decisions about the future work they award, precisely because they are up-to-date on the current comparative risks of one supplier or location over another. Another benefit for financial services firms is paramount: they need to do so in order to meet the stringent third-party monitoring guidelines of the Office of the Comptroller of the Currency (OCC) and other regulators. Or, they risk significant fines.

USING UTILITIES

This point tips the scales toward using “utilities” to meet the demands of regulators. In financial services, where so much hinges on Reputational Risk, the benefits of investing in proprietary compliance activities and solutions has always been clear. But the regulatory imperative to provide monitoring of third-party, and even fourth-party risk, effectively makes the motive, basis, and even the measures for meeting the guidelines a common objective for all firms subject to those regulatory demands. In that environment, banks can only win by commonizing their process through a shared approach or “utility.”


Why build my own windmill when the whole community needs one?

Why not a common standardized approach for global supplier and location monitoring?

It makes sense.

Check out, www.supplywisdom.com, formerly globalsupplyriskmonitor.com. It’s a utility that has over 100 companies leveraging the benefits of supplier and location monitoring. And it’s available as a special benefit to IAOP Corporate Members.

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Managing Director, Trellis

K AT I E G O V E

In this issue’s Knowledge Center, we look at the importance of Managing with Metrics. We asked a customer, provider and advisor: How important is measuring and analyzing data to your organization? Are data mining and analytics growth areas for outsourcing?

Sandboxthe

COP

D O N A L D M O N E S

“Data analysis is the key factor in managing relationships. It is critical to be able to measure the effectiveness of any outsourcing relationship both in the contract terms and in the subjective measures such as customer satisfac-tion. I truly believe that most buyers underestimate the effort involved and importance of data analysis and metrics, and don’t have the capabilities to capture, analyze and report on the health of outsourcing engagements. Outsourcing this capability will be even more important going forward with buyers using cloud-based tools to analyze the numerous data points of multi-vendor engagements.”

C U S T O M E R“Being able to manage and analyze

data on behalf of clients and from their

business perspective is a critical growth

area for the future of outsourcing. Clients

come to outsourcing engagements

with significantly more accessible -

yet underutilized - data that needs to

be leveraged to deliver advantages.

However, properly leveraging data is a

high-value skill that few organizations,

including suppliers and customers,

master. The outsourcing providers that

are able to deliver this kind of value

to clients will be the ones that will

differentiate themselves and will be

much more successful in the future.”

A DV I S O R

Chief Executive Officer, ReSource Pro

DA N E P S T E I N

“In the future we will all be working

for data scientists. Perhaps this is

only a slight exaggeration. Data is so

important because it helps us under-

stand causes, context and, therefore,

guides solutions. While a company’s

overarching mission and objectives

may still lie above data, only data can

inform, indicate and guide execution

against those objectives. We see

ourselves (and assume others in our

space) evolving into analytics

companies wherein all our solutions

are guided and informed by an under-

standing of the numbers behind our

clients’ and our own business.”

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“

THE PULSEOLATEST RESEARCH, REPORTS AND READS FOR OUTSOURCING

PROFESSIONALSBOOK CLUB

Overview: Many books weave platitudes, promising the keys to success in leadership, secrets that will transform you into the great leader - the one. The fact of the matter is, however, that true leadership really isn’t about you. It is about giving back, offering your best to others so that they can find the best in themselves. The methodologies in this book help you become the leader you were meant to be by bringing your goals and other people’s needs together to create a powerful, combined vision.

Reviews:

“As the outsourcing profession blooms, we are finding a dearth of good leaders, especially for young startup companies. It is not that the leaders there don’t have the vision. It is that they have a narrower view of leadership. This book is not pithy submission of high ideals and age-worn clichés but a useable guide to developing leadership talent. Each chapter has defined steps that guide the reader through their own thinking process and help develop their own leadership style. A must read for both young and experienced leaders alike.”

– Jag Dalal, COP-GOV, Chief Advisor, Thought Leadership, IAOP

“Among the thousands of books on this subject, I am amazed that Wilder and Kane have not only found a new approach, but one that makes a difference. Leaders and mentors of all stripes should read this book for what it is - a martial arts manual on leading that shoves us face-to-face with the ‘how to’ of developing, strengthening, and nurturing the sinews and muscles of real leadership. ”

– Colonel Anthony A. Wood, USMC (ret)

“Finally a book that will actually move the needle in closing the leadership skills gap found in all aspects of our society.”

– Dan Roberts, CEO and President Ouellette & Associates, and a noted author on IT leadership

Available formats: Print and digital versions (ebook).

Why we like it: Management and leadership books generally fall into two categories that can be broadly described as “see if you can learn from how other leaders have succeeded” or a “five-minute guide to becoming a leader.” Or they are academic tomes that require you to take a course in management to follow what they mean by their definition of a leader.

This book is a practical guide that helps readers take action to improve their leadership skills. Skills are divided into manageable categories and authors provide a step-by-step guide in developing those skills. It is a manual for the leadership journey, which is a marathon and not a sprint.

Tell us what you think: Pulse wants to hear what you think of this book. Share you review with us at [email protected]

Title: Sensei Mentor Teacher Coach: Powerful Leadership for Leaderless Times

Authors: Lawrence Kane, COP-GOV and Kris Wilder


PULSE

WITH METRICS

MANAGING

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

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Reportedly, former New York Mayor Michael Bloomberg had a sign in his office: “In God I trust, all others bring data.” To be more accurate, that sign should have read: “In God I trust, all others I manage with numbers.”

Businesses, large and small have used data, numbers and metrics to make decisions and manage their business. Occasionally, you do come across someone who claims to manage with their “guts” and only uses numbers where absolutely necessary. However ...

GOOD INSTINCTS ARE OFTEN BASED ON EXPERIENCE

AND ON UNDERSTANDING NUMBERS. THIS ARTICLE

REVIEWS WHAT IT MEANS TO MANAGE WITH NUMBERS

AND WHAT TYPES OF NUMBERS/DATA MAKE SENSE.

Let’s take an example we are all quite familiar with – the weather. A temperature or barometric pressure is just data and has no inher-ent usefulness. To turn that data into metric, we need to have an association with commonly known “rules” – such as water freezes at 32 degrees Fahrenheit. Although, it is a good metric, it still doesn’t have

relevance to a person wanting to know how to dress to go out at that moment. That requires association of data with “experience” (what some call a “gut feeling”). For a person used to living in cold weather, a temperature reading of 50 may seem comfortable, while for someone from the desert, it may be cold. In order to be better prepared for a change later in the day, one needs to know the projected trend and associated data.

Based on meteorological studies and experience, one can predict an incoming storm pattern based on the combination of temperature and barometric pressure readings.

USEFULLNESS IN MANAGING

DATA

METRICS

MANAGEMENTINFORMATION

/PERFORMANCE INDICATORS TREND

EXPERIENCE

RULES

The relationship between data, metrics and management information needs to be clear. As the accompanying figure shows, there is a linear relationship between these elements and when pulled together, they become a useful tool for management.

UNDERSTANDING METRICS

This then becomes “management information” that can be used to plan ahead. Often this management information is referenced as “performance indicators.” A series of readings, observations and effect analysis then becomes the basis for establishing trends and projections and become weather forecasting. Raw data without rules, experience, trends and association are just numbers and not too useful in understanding the weather.

Similarly, an insurance company collects demographic “data,” applies “actuarial rules” to create metrics and compares similar groups to establish the range of “management information” for risk management profiles used in creating appropriate policies.

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

MANAGING WITH METRICS ...

IN A SALES ENVIRONMENT, market size is “data.“

A target market for the product takes that data

and applies “rules“ to create sales target metrics.

Dissecting target market into sales territory and

marketing approaches uses the metrics to create

management information for revenue generation.

Certain attributes of data are essential in order for them to be turned

into metrics and eventually management results. These attributes are:

• VALIDITY ... a valid measure is one that captures the essence of what it professes to measure and is taken as credible.

• RELIABILITY ... a reliable measure has a high likelihood of yielding the same results in repeated trials, so there are low levels of random error in measurement.

• RESPONSIVENESS ... a responsive measure should be able to detect change.

• FUNCTIONALITY ... a functional measure is directly related to objectives.

• UNDERSTANDABILITY ... an understandable measure is easily understood by all, with minimal explanation, and can be taken as credible.

• AVAILABILITY ... an available measure is readily available through the means on hand.

• ABUSE-PROOF ... an abuse-proof measure is unlikely to be used against that which is, or those who are, measured.

ATTRIBUTES OF

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TYPES OF METRICS

THIS LEADS TO TWO TYPES OF BUSINESS METRICS:

1.In-process measures - those that manage process activities and their outcome such that when put together, results will happen. In the driving to work example, if the driving speed is planned, measured and achieved, we will arrive at the destination at the expected time. As the driving speed changes from the norm, we begin to adjust our expectations of the result. At that point, we only have driving speed – an in-process measure - under our control to help achieve the end result.

2.Results measures. In short, “results will happen, if the process is under control as measured by in-process measures.” This is the basis for the science of statistical process control and is the foundation for creating more efficient processes.

In order to achieve a planned sales target, a business manages the client acquisition process.

The attached diagram, commonly known as the “sales funnel process,” shows an example of how in-process sales measures ensure an appropriate number and type of prospects end up as customers.

As we already saw in our driving example, the more we manage the process, the more metrics we collect, the better we get at predicting results and eventually, we no longer think about the end destination but only the in-process measures that ensure results. A stable process thus leads to replicable results and allows us to “fine tune” the process for higher/better results.

PROCESS MEASUREMENTS:

Different types of metrics help us manage our business and even our everyday lives. We all live and manage by processes: a process for getting ready to go to work; a process for driving to the destination; a process for issuing an insurance policy; and many others.

When the process is well defined, understood and

under control we achieve the results we are looking for. Driving to a “destination on time” process requires knowing the route, driving skills and experience of traffic patterns. If we manage the process correctly through each step, we get to our desired destination on time every time. In fact, we already know that if the process is stable and predictable, we don’t have to think about the destination at all but just manage the variables.

In the science of management, there are business processes that control everything a business does. Client acquisition, client service and client support are examples of such processes. Each has well defined steps in the process. They don’t have to be the most optimized steps – just as a planned longer route is not different than a short cut. So, if we manage the business processes and make sure they are under control, results will happen without having to watch for them all of the time.

PROSPECT

LEAD

QUALIFIED OPPORTUNITY

PROPOSAL

WIN

DEFINITIONS ASSUMPTIONS

PHASE 1: Identify candidates meeting target criteria

PHASE 2: Meets crieteria; willing to talk so we can qualify the opportunity

PHASE 3: Their needs fit our services; capable of buying a solution

PHASE 4: Proposal provided and accepted

SALE CLOSED

10

60%

4 40%

2 20%50%

1 10%50%

To win one contract requires a pipeline of 6 leads

EXAMPLE:

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MANAGING WITH METRICS ...

CSF AND KPI:Experience has also shown only a small number of measures affect the

stability of process and help achieve business goals. Two related

concepts drive the definition and selection of metrics: CSF – Critical

Success Factors and KPI – Key Performance Indicators.

CSF - CRITICAL SUCCESS FACTORSThe concept of Critical Success Factors was introduced in an article in the Harvard Business Review in 1979 stating, “Chief executives define their own data needs,” based on previous work done by McKinsey consulting.

Wikipedia references the following definition for CSF: “Critical success factors are those few things that must go well to ensure success for a manager or an organization, and, therefore, they represent those managerial or enterprise areas that must be given special and continual attention to bring about high performance. CSFs include issues vital to an organization’s current operating activities and to its future success.”

For example, to an insurance company, CSF can be client retention or managed risks. These factors are not measures but inherent strategies and action that ensure success. KPI - KEY PERFORMANCE INDICATORSThese are the metrics that measure and evaluate progress against the business vision/goals. Many performance indicators manage the business processes and results but only a selected set of indicators ensure the process is under control and providing positive direction. In our earlier example of driving, speed and traffic congestion may be the key performance indicators in ensuring the driver gets to the destination on time. These indicators are generally grouped in a fashion to measure various aspects of business. “Balanced Scorecard” is an example of such a grouping.

PERFORMANCE MANAGEMENT AND METRICS are critical to

the success of an outsourcing relationship. Quality

principles and application are equally important to

maintain and enhance performance levels.

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By: Jag Dalal. COP-GOV, Chief Advisor Thought Leadership, IAOP

ACTION PLAN:

TYPICAL STEPS IN IMPLEMENTING A PROGRAM USING METRICS ARE:

1.Create a business vision and goals and identify the end result you wish to achieve (e.g. revenue goal, EBITDA targets, market penetration)

2. Identify Critical Success Factors since they will help guide the framework and Key Performance Indicators

3. Identify controlling management framework such as “balanced scorecard”

4. Identify KPIs and other performance metrics - in-process and results

5. Select data that would yield the management information metrics

6. Design/modify existing systems to collect and track the data and produce necessary reports

7. Once there is enough history, establish trend reports and if possible, develop a management “dashboard”

8. Use the metrics in the management processes (planning, controlling)

An action plan for implementing a program of metrics is both easy and hard. It is easy because all businesses have data available. It is hard because the data may not meet the criteria for metrics defined above. It is also difficult because often businesses have not managed using “metrics” and therefore, may have resistance inertia (“I have done well all these years without managing with metrics…”). However, once you create a system of management using metrics, you will wonder how you did so well without them.

We manage many

actions in our

lives with metrics

without realizing

it. We even use

some metrics when

we think we are

managing based on

"gut." The time has

come to formalize

these metrics and

turn the "art" of

managing into a

"science."

We manage many actions in our lives with metrics without realizing it. We even use some metrics when we think we are managing based on “gut.” The time has come to formalize these metrics and turn the “art” of managing into a “science.” Then, we can hang a sign in our offices that says: “In God I trust, all others I manage with numbers.”

FOR MORE ON THIS TOPIC, HEAR DALAL’S TALK AT THE ADVANCED COP WORKSHOP AT THE OUTSOURCING WORLD SUMMIT, FEB. 18, IN PHOENIX, AZ.

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The BPO industry has always been in search of the next great outsourcing location - one that combines scalability with cost that is competitive to other low-cost markets.

Both outsourcing providers and customers face new challenges when expanding into previously uncharted locations that will change the global BPO landscape. Intense competition among providers for experienced workers is affecting performance and driving costs steadily upward.

As a result, some long-established BPO locations are becoming more difficult to sustain performance at, partly because of skewed market conditions where demand is outpacing supply.

The Rapid Rise of Costa RicaA few years ago Costa Rica was a very attractive lower-cost nearshore market for English-language contact centers. But many BPO companies rapidly entered the market and were vying for the same labor force.

According to CINDE, the Costa Rican Investment Promotion Agency, the services sector employed about 46,000 people in 2012, compared to only 1,000 people in 2000. As a result, the market quickly adjusted itself out of the lower-cost range and worker attrition has been chronic in recent years due to market demand.

Costa Rica is still a good market with proven ability to provide BPO services, but with 2 percent of the country’s entire workforce already employed in the services sector, we shouldn’t expect a significant increase in scalability. Costa Rica is a good example of what is currently in progress in several smaller markets that are trying to compete as alternatives to the Philippines and India.

Evolving BPO Location ChallengesWhen thinking about a site strategy, basic questions must be addressed. For example:

• What number of providers and sites maximizes cost efficiency and overall pricing leverage?

• What is the minimum number of sites that provides good overlapping coverage and maximizes agent utilization?

GEOPOLITICAL REALITIES TO CONSIDER IN BPO SITE SELECTIONEVOLVING

BPOLOCATIONCHALLENGES

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But today, we have new challenges and also must consider a different category of site risk including the long-term scalability of the labor market. There is no better place to illustrate this than the Philippines - where 770,000 of the 1.8 million global outsourced contact center workers are employed today.

Many of my buying peers in the industry are concerned about the long-term health of the Philippines BPO market. In 2012 and 2013, the Philippines saw the largest two-year GDP growth since the 1950’s averaging 7 percent and the industry is forecasting demand for another 150,000 contact center jobs in the next two years.

Normally in a classic supply/demand model, there would be a balance and increased demand would be moderated by increased labor costs. But today we see increasing demand regardless of labor cost changes because the Philippines is still one of the least expensive BPO labor markets and very few scalable alternatives exist at comparable cost.

As a result, today we already see very high attrition rates comparatively in major hubs like Manila and Cebu because of the high demand for experienced workers.

Real estate costs also are contributing to rising prices that buyers are now seeing. The BPO industry is forecasted to require an additional 400,000 square meters of office space next year in the metro-Manila area but estimates say only about 320,000 are readily available to meet this need.

As a result, rental costs are likely to increase significantly in the coming years. And since 15 to 20 percent of outsource pricing comes from facilities costs, this will likely be passed on to the buyer of the services.

Over time, we could find that traditional Philippines locations may evolve away from the low-cost BPO market that we see today.

To continue growth in the Philippines many companies are now investing in locations that were previously avoided due to risk. Davao is a great example in the Mindanao region. Previously, it was thought to be more risky because

of anti-government activity in the area. But now because of calmed tensions in the region and a spike in market demand, it is an upcoming outsourcing market and many of the major providers are already established today in Davao.

Emerging Tier Three MarketsWe are seeing rapid expansion into tier three and even smaller markets because of these new challenges and it should have some counterbalance effect on attrition and labor cost increases.

In fact, many workers today who have had to leave their families to travel to tier one and tier two markets for work can now stay in their home town as BPO comes to them. This has had the positive side effects of reduced attrition rates in these locations while stimulating local economies.

Site Strategy ConsiderationsFor providers, there are many factors to consider when investing in new markets but ultimately it comes down to three main themes:

• Is the site scalable? • Will it be profitable? • And are the risks acceptable?

But buyers also should have their own expansion criteria. It’s important to balance your site portfolio not only for re-dundancy or to inspire competition, but also for geopolitical risk management as well as testing new growth markets.

Sustainable Labor Supply Many of the larger providers have said they need scalability of between 250 to 500 workers before a new site venture is worth the effort and risk. Unfortunately, this can rule out many potential locations that otherwise would have been good sites but economies of scale help keep pricing at competitive rates.

But it’s not just a ready labor supply that determines loca-tion success. Buyers must also agree on the value and one of the key questions is whether or not they feel comfortable sending a team to the location for an extended stay during the initial setup of operations.

Crime and unrest are truly global issues but there are BPO locationswhere rightly or wrongly, they are flagged as areas of big concern and many buyers I know will not send teams to these locations, regardless of how attractive the markets look.



IN SEARCH OF THE NEXT GREAT LOCATION

These perceptions can change and Davao, Philippines is a great example of a location that has become a major BPO site as a result of easing tensions in the area. Now, most buyers have few reservations about sending people to Davao.

Impact Sourcing Alternatives and the Path to Scalability

Expanding BPO presence into underserved communities, areas of high unemployment where there are few opportunities for good jobs is known as impact sourcing.

Impact sourcing adds lower-cost, skilled workers to the BPO labor force while bringing new opportunities and raising the economic status for disadvantaged communities. This can lead to a lifetime of sustainable employment and more economic stability for these emerging locations.

A lot of companies are starting to take notice of impact sourcing locations. The Rockefeller Foundation has established the Digital Jobs Africa Initiative and many large providers are already involved in this effort. (For more, see Pulse Issue #11)

Providers see the necessity to expand into these areas, but they need for their clients to also see the potential in these locations. Simply put, without customer demand, outsourcing providers will not invest in these areas and these markets could go untapped for years.

Focus on Africa

Today, many cities in Africa hold good promise as BPO expansion sites and there’s a strong business case to consider these locations. Many who work in the region believe that 100,000 to 200,000 new BPO jobs are possible in Africa in the next seven years. Expansion into these locations will drive competition to other markets like India and the Philippines and help keep costs in those regions under control.

And it’s good for business - this type of expansion helps open new sales markets as we see a growing middle class in the region. Eleven of the top 20 fastest growing GDPs are now in Africa.

For the longer term, South Africa has very good potential to provide BPO support at a scale that could relieve some of the demand pressure on the Philippines. Already South Africa is becoming a strong choice for European time zone English and providers are now looking at how to develop the overnight labor market in Cape Town and Johannesburg to compete with the Philippines to support customers in the United States.

To be sure, there are many obstacles to overcome before South Africa and other impact sourcing locations will achieve their full potential. But now is the time to consider early investments in these markets to test their viability and encourage outsourcing providers to invest in these developing locations.

Watch for Early Warnings

It’s always a good idea to regularly evaluate your site strategy to determine if labor costs are rising or the local labor environment is changing. BPO industry growth is on track to outpace supply in some markets and we must be alert in our location strategies to recognize the early warning signs and always be looking forward to developing new markets.

It’s important for buyers to understand the key drivers that outsourcing providers consider when investing in new markets. But buyers also need to consider their own criteria. Finally, let’s keep in mind the developing markets in Africa and the long-term promise of impact sourcing in these and other locations.

By Jon Browning, President and founder of Global BPO Solutions and former Microsoft director for customer care outsourcing strategy.

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THE 2015OUTSOURCING WORLD SUMMITJW Marriott Phoenix Desert RidgePhoenix, ArizonaFebruary 16-18, 2015

www.IAOP.org

networking community

EDUCATION Global Services Mall Collaboration

P

ublisher’s Cup Golf

Summ

it Hub Outsourcing Hall of Fam

e

COP workshops

Global Outsourcing100

100+ SPEAKERS

INNOVATION

STRATEGYMANAGEMENT IMPLEMENTATION

YOU ARE

HERE

Feb. 16 - 1

8, 2015Phoen

ix, AZ

GEO

Awards

EARLY BIRD SAVINGS

GOING ON NOW!WWW.IAOP.ORG/SUMMIT

NEW GAME TIME

IN 2015IN OUR ONGOING PURSUIT OF STAYING AHEAD OF THE

LATEST TRENDS IN OUTSOURCING, PULSE ASKED IAOP MEMBERS

TO DO SOME STAR GAZING INTO WHAT 2015 MAY HOLD.

JUDGING FROM WHAT THEY FORECAST,

IT’S A WHOLE NEW GAME

S TO RY B Y S A N DY F R I N TO N

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THE SKILLS THE PLAYERS EQUIP THEMSELVES WITH WILL CHANGE – LOOK FOR HIGHER SKILL LEVELS, GREATER TALENT AND DEMAND FOR MORE SPECIALIZATIONin areas providing data analytics, business intelligence and SMAC. Automation – and even robotics potentially - will let us do more with less. • Even how we judge who wins won’t be the same as in the past. Instead of the lowest bid always being picked, you’ll hear more talk about business outcomes and value creation. • Analytics and insights will become crucial to measure those game stats that will go into deciding who gets the next big deal. • Among the top 10 trends seen ahead (in no particular order) by our IAOP trend watchers are: business outcomes, partnerships, new talent needs, cloud, automation, analytics, governance, risk monitoring, consolidation and CSR. For the full trends submitted by our IAOP thought leaders, see our Knowledge Center.

TRENDS & FORECASTS


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THE COMPETITION MAY LOOK DIFFERENT EXPECT MORE CONSOLIDATION, JOINT VENTURES AND TRADITIONAL PROVIDERS THAT DON’T CHANGE TO FOLD. RISK ASSESSMENT AND MONITORING WILL BECOME MORE IMPORTANT IN THESE NEW TIMES IN DETERMINING OUTSOURCING LOCATIONS.

TRENDS & FORECASTS

“GLOBALLY 2015 WILL CONTINUE TO BE UNSETTLING FROM POLITICAL-ECONOMICAL POINTS OF VIEWS.” – JAG DALAL, COP-GOV, IAOP’S CHIEF ADVISOR OF THOUGHT LEADERSHIP

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John C. Maher, COP, Executive Managing Director, CBRE, says his company has been seeing this shift to business outcomes and expects the momentum to pick up. Increasingly, he predicts, customers will ask: How do we achieve the best business outcomes?

“Companies need to hold their partners accountable for outcomes, not just costs. They need to tap into the resources of their partners and say ‘we want your knowledge, your expertise, your process automation, bring that all to me,’” said Maher, a member of IAOP’s strategic advisory board.

Another board member, Atul Vashistha, COP, CEO, Neo Group, says his firm has seen a steady shift from a focus on task to process to outcomes – steadily transforming global sourcing from a purely bottom-line, costs savings exercise toward a top-line, revenue-generating opportunity and paving the way for innovation.

David Brown, Global Lead, Shared Services and Outsourcing Advisory, KPMG, also on the IAOP board, predicts dis-satisfaction will continue to rise if customers feel providers are not working proactively to provide value above and beyond the core table stakes of price and service quality.

“As the market continues to demonstrate, outsourcing is no longer about simply achieving cost reduction targets and streamlining functional operations,” Brown says. “It’s

about moving organizations into a new, future state that’s inherently more effective. It’s about leveraging enabling technologies, incorporating data analytics and bringing new solutions to the table that are based in the creation of value.”

Bobby Varanasi, COP, COP-GOV, COOPM, Chairman/CEO, Matryzel Consulting, says these factors will lead to increased contract re-negotiations in the coming year.

“The increasing irrelevance of traditional service providers will come to a head,” he says. “Almost all outsourcingdeals premised on standard goals will end up getting renegotiated (or offered out to more innovative players), premised purely on shifting to outcome-centric perfor-mances, coupled with a plug into new technologies. Value at risk will drive all deals and models. The days of ‘hands-off fee-for-services models’ are over.”

Anupam Govil, Partner, Avasant & President, Avasense, sees transactional outsourcing models being replaced by transformational and outcome-linked models.

“Over the next year adoption of digital transformation solutions are expected to revolutionize the business of outsourcing both for the end-clients as well as for service providers,” he says. “It is safe to assume that businesses failing to transform themselves by adopting evolving technologies and business models may soon go offline all together.”

PREDICTION: OUTSOURCING HAS MOVED BEYOND COST. BUSINESS

OUTCOMES AND VALUE CREATION ARE THE NEW

REQUIREMENTS. PROVIDERS THAT DON’T DELIVER

BEYOND THE TRADITIONAL EXPECTATIONS WILL LOSE.

“Companies need to hold their partners accountable for outcomes, not just costs. They need to tap into the resources of their partners and say ‘we want your knowledge, your expertise, your process automation, bring that all to me.” – John C. Maher, COP, Executive Managing Director, CBRE

John C. Maher, COP, Executive Managing Director, CBRE

IAOP Strategic Advisory Board Member Peter Ankerstjerne, CMO, ISS World Services, says: “Increased transparency, more clarity on what is and what is not core, and the continued application of outcome-based contracts will enable outsourcing partners to move closer together and establish much stronger interdependencies to pursue common goals based on a strategic and cultural alignment.”

According to Vashistha, “As businesses seek to reap returns, they will insist on establishing deeper relationships (partnerships) with their suppliers, and will expect suppliers to have an intimate understanding of the industry, sector and have deep domain knowledge in order to provide meaningful, actionable analytics and business insight.”

PREDICTION: CUSTOMERS AND PROVIDERS WILL HAVE CLOSER RELATIONSHIPS AND BECOME PARTNERS.

“Increased transparency, more clarity on what is and what is not core, and the continued application of outcome-based contracts will enable outsourcing partners to move closer together and establish much stronger interdependencies to pursue common goals based on a strategic and cultural alignment.” – Peter Ankerstjerne, CMO, ISS World Services

“There’s a major talent crunch on the way,” predicts Brown. “As we continue to see tech-enabled solutions replacing traditional processing capabilities, technologists and data scientists will become more critical than ever to the delivery models of the future. Companies will need to figure out whether they’re positioned to attract and retain these in-demand resources or if they’ll need to pursue outsourcing relationships in order to plug these skill gaps.”

Online talent communities will emerge as one solution, in response to workforce challenges outsourcing providers face, enabling companies to deliver high-demand talent to their operations with speed and quality, at a significantly lower cost, according to KellyOCG.

“Talent communities reflect changing demographics and new realities about how people today are choosing to work,” says Tom Kaminsky, Vice President, RPO Practice Lead, Americas, KellyOCG. “Companies who leverage these shifts can reach across all labor categories – temporaryworkers, full-time hires, independent contractors, project-based workers, interns, alumni, retirees, and others – and give them reasons to stay connected.”

Talent communities should have a customer mindset, be authentic, deliver high-quality content, have a consistent voice and boundaries in communications, and use superior technology to target the talent needed, Kaminsky says.

As companies increase their spend on social and digital technologies, Vashistha expects to see more companies creating the “Chief Digital Officer” role in 2015, while others will add this role to their CMO or CTO or CIO. This will benefit domestic and nearshore players and require resources that understand customer engagement and related technologies.

PREDICTION: WITH NEW SKILLS REQUIRED, TALENT WILL BE MORE IMPORTANT THAN EVER. DEMAND FOR THE BEST WILL ONLY INTENSIFY AND COMPANIES WILL LOOK AT NEW WAYS OF RECRUITING AND RETAINING THEIR WORKFORCE. NEW TITLES IN THE C-SUITE WILL EMERGE.

Peter AnkerstjerneCMO, ISS World Services


TRENDS & FORECASTS

TRULY BECOME TEAMMATES AS PARTNERSHIPS BECOME MORE ESSENTIAL THAN EVER BEFORE.

OUTSOURCING CUSTOMERS, PROVIDER AND ADVISORS WILL

“TALENT COMMUNITIES REFLECT CHANGING DEMOGRAPHICS AND NEW REALITIES ABOUT HOW PEOPLE TODAY ARE CHOOSING TO WORK,” – TOM KAMINSKY, VICE PRESIDENT, RPO PRACTICE LEAD, AMERICAS, KELLYOCG


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TRENDS & FORECASTS

“WE’RE SEEING A LOT OF

AMBITIOUSAND SOPHISTICATED COMPANIES IN THE MARKET THAT ARE REALIZING SIGNIFICANT BENEFITS BY SHIFTING FROM ‘ON-PREMISES’ TO ‘AS-A-SERVICE’ DELIVERY MODELS. IT’S ALREADY TAKING PLACE AND WILL LIKELY CONTINUE TO

PICK UP MOMENTUM OVER THE NEXT SEVERAL YEARS.”– DAVID BROWN, GLOBAL LEAD, SHARED SERVICES AND OUTSOURCING ADVISORY, KPMG

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Many customers will require cloud-based services from their providers, altering how agreements are made, predicts Jag Dalal, COP-GOV, IAOP’s Chief Advisor of Thought Leadership and strategic advisory board member.

KPMG’s Brown also expects to continue to see the proliferation of cloud, which he says has already established itself as a serious alternative. He predicts successful providers will be those that can bridge the divide between cloud/infrastructure and process delivery.

“We’re seeing a lot of ambitious and sophisticated companies in the market that are realizing significant benefits by shifting from ‘on-premises’ to ‘as-a-service’ delivery models,” he says “It’s already taking place and will likely continue to pick up momentum over the next several years.”

According to KPMG International conducted research (Executive Report: The State of Services and Outsourcing in 2014), close to one-in-three organizations already is using or about to use BPaas/cloud as an alternative to legacy outsourcing in areas like Human Resources, Finance, Accounting, Procurement, etc.

Govil says “organizations will wholeheartedly embrace the cloud beyond their non-core applications as it is key to driving agility in a rapidly shifting business environment. Moreover, the need for real time analytics and omni-channel connectivity with the digital consumer will drive greater cloud adoption across the organization.”

PREDICTION: AUTOMATION WILL CONTINUE TO MAKE SIGNIFICANT GAINS.

The next wave in business process management and decision automation/rule-based automation will improve quality and reduce labor costs, Vashistha predicts.

PREDICTION: THE CLOUD WILL TAKE ON EVEN MORE IMPORTANCE IN THE FUTURE, CREATING GROWTH OPPORTUNITIES FOR PROVIDERS THAT SPECIALIZE IN CLOUD PLATFORMS.

“Smart people are going to have to figure out how to deploy automation by redesigning business processes and by preparing organizations – and all of society – for change. We will need social engineers to figure out what the humans will meaningfully do in a more automated world.” – Dr. Mary Lacity, Curators’ Professor of Information Systems, College of Business, University of Missouri

“With new test automation technologies such as Business Rules-Based Test Automation, accelerated testing can be achieved, with anywhere from a 40 to 60 percent reduction in labor effort,” he says.

Says Brown: “Whether you’re talking about back office processing, front office customer interactions or anything in between, organizations now have access to the tools and applications to target and interpret meaningful data, software solutions that can automate – even robotize – processes like never before and all of this is happening in a culture that’s more mobile than at any other point in time…And this will likely be achieved with less human intervention and oversight than at any time in history.”

Services will follow the same economic cycle as manufacturing, which will mean more re-shoring and more automation, predicts Dr. Mary Lacity, Curators’ Professor of Information Systems, College of Business, University of Missouri.

“For a long time, labor arbitrage was driving location decisions, but as technology has finally started to deliver on its promises, we will see a complete shift in the underlying economic drivers of services sourcing, just like we have already experienced in manufacturing,” Lacity says.

Dr. Mary Lacity, Curators’ Professor of Information Systems, College of Business, University of Missouri.

“In 2015, we expect to see increased predictive analyticsuse in favor of descriptive analytics,” says Vashistha. “Companies that are able to industrialize the new process will rise above the competition, as this will be an ongoing process of continuous improvement. These all will need to be included in sourcing and ongoing governance.”

PREDICTION: ANALYTICS THAT DELIVER BUSINESS INSIGHTS WILL HAVE SIGNIFICANT IMPACTS. BUSINESSES WILL EXPECT TO BE ENABLED, REQUIRING TEAMS THAT HAVE DEEP KNOWLEDGE OF BUSINESS INTELLIGENCE TOOLS, ACCESS TO RICH DATA, AND ANALYTICAL MODELING SKILLS THAT PRODUCE OUTPUT WITH ACTIONABLE INSIGHTS.

“Companies that are able to Industrialize the new process will rise above the competition, as this will be an ongoing process of continuous improvement. – Atul Vashistha, COP, CEO, Neo Group

“As companies increase the mix of service providers and make sourcing more strategic, the need for effective governance through a service orchestration platform becomes more critical,” says Govil. “Avoiding value leakage, enhancing performance, providing key analytics data through an automated or managed governance service will be key to ensuring long-term success.”

PREDICTION: SERVICE ORCHESTRATION AND GOVERNANCE WILL BECOME IMPERATIVE.

Customer expectations of higher valued services along with the emergence of cloud-based services will further drive consolidation and especially will adversely impact under-invested providers, says Dalal.

“Consolidation of vendors will become a pivotal pursuit, as such competencies are acquired. Meanwhile, client-vendor joint ventures will only increase, particularly in fast-growing regions of Asia Pacific and Latin America,” Varanasi says.

PREDICTION: EXPECT INDUSTRY CONSOLIDATION, MERGERS AND ACQUISITIONS, AND JOINT VENTURES ON THE HORIZON.

“Increased commitment to socially responsible sourcing initiatives, particularly in fast-growing nations like Brazil and India will fuel access to technology,” Varanasi says. “You’ll see more simple and easy-to-deploy solutions that cater to local specificities, which are supported by the increasing sense of global responsibility amongst large corporations.”

PREDICTION: CSR MODELS WILL CONTINUE TO GROW.

“Globally 2015 will continue to be unsettling from political-economical points of views,” Dalal says. “Although businesses won’t curtail their offshoring activities significantly, there will be a greater emphasis placed on risk assessment and monitoring as a part of their governance process. Unsettled political climates in some of the countries will impede their ability to be considered a viable offshoring location for services.”

PREDICTION: BUSINESSES WILL BE EVER MORE CAREFUL IN ASSESSING OFFSHORING RISKS AND WILL INCREASE THEIR GOVERNANCE (ESPECIALLY RISK ASSESSMENT AND MANAGEMENT) DILIGENCE.

Atul Vashistha, COP, CEO, Neo Group


TRENDS & FORECASTS

“AVOIDING VALUE LEAKAGE, ENHANCING

PERFORMANCE,PROVIDING KEY ANALYTICS DATA

THROUGH AN AUTOMATED OR MANAGED GOVERNANCE SERVICE WILL BE KEY TO ENSURING LONG-TERM

SUCCESS.”

– ANUPAM GOVIL, PARTNER, AVASANT & PRESIDENT, AVASENSE


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TRENDS & FORECASTS

FACILITY MANAGEMENTCurtis Bragg, Vice President, Strategic Integration, Business & Industry Facility Services, Aramark, says facilities management outsourcing will rise to take its place of importance alongside ITO and BPO in the outsourcing conversation. “Viewed by most today as a sub-category of BPO (providing specific tasks on behalf of a client organization), facility management scope and strategy has broadened significantly beyond solely maintaining the built environment,” Bragg says. “The push for horizontal integration and ultimately reduced risk across the service delivery spectrum will drive FMO to be part of the outsourcing conversation in 2015 unlike ever before.”

TECHNOLOGY IAOP Strategic Advisory Board member Ashish Malhotra, VP Global IT Workforce Management, Time Warner, made the following prediction: “In the next decade or so, technology is likely to go the direction of medicine. Technology Care will be consolidated to the very large providers, who will have the tools to manage and operate on behalf of the corporations much like hospitals, doctors and nurses do for healthcare. This trend towards consolidation to the majors is facilitated by: · larger buying power of the majors, which translates into scale efficiencies unmatched in a self-sustained

IT model where each corporation has an internal IT department,· adaptation of cloud infrastructure which further blurs affinities between human capital & infrastructure,· broader influence on regulatory and cross border matters feasible due to the sheer size and influence of the majors,· greater access to funding for R&D,· greater ability to manage environmental, socio-economic risks including threats with disciplined information

security, data privacy, disaster recovery and business continuity practices,· and finally, mobility devices that in fact become the equivalent of the medicine cabinet offering self-care for

routine matters that do not require a visit (renegotiation) to the primary care physician (major technology provider).”

FINANCIAL SERVICES The financial services industry is realizing that a technology ‘engagement layer’ that leverages pre-existing IT investments is critical to driving innovative operating models, says Sanjay Srivastava, senior vice president and business leader, Enterprise Technology Services at Genpact and an IAOP strategic advisory board member.

“Going forward, financial institutions will increasingly leverage a new layer of technology – the ‘engagement’ layer that sits between process and core technology applications. This is a thin, zero-footprint (cloud based), flexible, and configurable layer of technology that will help automate and improve processes, foster rapid user adoption, enable better collaborations between teams, and increase visibility with actionable reporting and real-time decisions. Systems of engagement can amplify operations’ economies of scale because they use people and assets better, irrespective of what, who and where they are. The result is that it can increase efficiency, optimize effectiveness (including at the customer front-end), and improve visibility, governance, and compliance as well as keep execution costs in check. This combination of effectiveness, speed to result, and overall limited investment has made systems of engagement an obvious option for financial services COOs and CFOs who need to transform their operating models today. The ongoing industry pressures as well as continuous improvement of the technology will fuel their adoption for the foreseeable future.”

OTHER OUTLOOKS IN FACILITY MANAGEMENT , FINANCIAL SERVICES & TECHNOLOGY


HERE’S WHAT WE PREDICTED A YEAR AGO:

A LOOK BACK

WHAT HAPPENED?

“2014 was another interesting year for outsourcing, especially global outsourcing. In ITO, we saw increased activity in offshore infrastructure sourcing while application sourcing saw increased vendor consolidation. The BPO market has been challenging and while we expected a much faster pace of growth, it did not materialize. Upon investigation, it seems that global business services, particularly, global in-house centers, have been responsible for the slower growth, along with a hesitation to source complex industry specific processes.” - Atul Vashistha, COP, CEO, Neo Group

“2014 was an outstanding year for the sourcing industry with a significant surge in deal numbers and magnitude. While a good part of the growth came from a record number of renewal deals, there were also a considerable number of new transformational sourcing initiatives driven by rapid shifts in business environment. As clients accelerated their move towards cloud and mobility, most major service providers jumped on the opportunity to offer a migration path and provide service integration support to manage a multi-tiered/multi-vendor environment. The offshore majors like Wipro (Atco, Canada) and Cognizant (Trizetto) also made significant acquisitions to gain captive revenue, signaling an era of consolidation. The one dark spot in the growth story was the BPO sector which lagged behind primarily due to uncertainty in the markets and shifting regulatory environment.” – Anupam Govil, Partner, Avasant & President, Avasense

“We saw significant growth in outsourcing interest. More and more companies are realizing this is a great business model. We’ve seen volume, the quality of relationships and the focus on outcomes going up. As an industry, we’re also creating jobs. Managing an outsourcing relationship is different than managing a vendor relationship. This is leading to enhanced career opportunities.”– John Maher COP, Executive Managing Director, CBRE

GROWTH AREASSOURCING TYPES: Domestic souring, rural sourcing, nearshore

MODELS: Managed Services, Value-added

INDUSTRY SECTORS: Government/public, healthcare (U.S.), financial

GEOGRAPHIES: Latin and Central America, Africa, Eastern Europe, Asia Pacific

OTHER TRENDS: Impact Sourcing and CSR, SMAC, re-negotiated contracts, closer relationships, increased risks and regulations, governance, industry consolidation


RISK FACTORS LIKE ELECTIONS, WAR, NEGOTIATIONS, NATURAL DISASTER AND SOCIETAL UNREST CAN POTENTIALLY HAVE AN IMPACT ON OUTSOURCING OPERATIONS.

According to IAOP’s trend predictions for 2015, companies will be more cautious in assessing offshoring risks and will increase their risk assessment and management diligence. See our trends story.

Pulse spoke to several IAOP members about the challenges facing Ukraine and Vietnam, amid current political and economic changes:

In the first Quarter of 2014, Michael Nacarato, IAOP Deputy Global Ambassador, spent a week in Vietnam to learn more about Vietnam as an emerging outsourcing destination, meeting with service providers and industry groups in three major cities.

Nacarato spent time with the management team of one of IAOP’s newest 2014 Global Outsourcing 100 Service Providers - FPT Software. He also met with the Vietnam Software Association (VINASA), a software business association based in Hanoi that was established in 2002.

Overall, he says he was impressed with the level of sophistication of the IT support services being offered to

their global client base inclusive of North American clients.

“I was impressed with the passion and commitment of the highly-educated workforce as well as the level of sophistication of the services being provided,” Nacarato said. “Based on my observations and conversations with key business and industry leaders I believe that Vietnam will continue its upward trajectory as a legitimate major outsourcing destination.”

Miratech, a Ukraine-based Global Outsourcing 100 ranked service provider, joined in the second “Ukrainian IT-day” at the Embassy of Ukraine in U.S. in July to promote Ukrainian IT services to the U.S. market.

CEO Valeriy Kutsyy emphasizes how important U.S. connections are for Miratech and Ukraine: “At the borders of a totalitarian regime we are building a free country that is based on Democratic Values. It is now more critical than ever for the Ukrainian business community to remain united and supportive through these challenging times. We look forward to expanding our cooperation with U.S. partners and customers.”

HOTSPOTS

COUNTRIES GOINGTHROUGH CHANGE

FOR MORE ON GEOPOLITICAL REALITIES IN SITE SELECTION,

SEE OUR KNOWLEDGE CENTER STORY.

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FAMOUS FOR ITS CHICKEN KIEV (NAMED AFTER UKRAINE’S CAPITAL), PIEROGI DUMPLINGS AND BORSCHT SOUP

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Location: Eastern Europe; bordering the Black Sea and Russia, Belarus, Poland, Slovakia, Hungary, Romania and Moldova

Population: 46 million

Language: While the official language is Ukrainian, 24 percent also speak Russian; other languages include Romanian, Polish and Hungarian

UKRAINE NATO Support Signals Positive Change Ahead

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Ukraine also gave us Wayne Gretzky, Oksana Baiul and Andy Warhol. We may not have the Easter egg today had it not been for the Ukrainians; predating Christianity, in ancient times, Ukrainians decorated eggs believing they had immense power and released the earth from the restraints of winter. Each design had meaning and they were usually given as gifts or used as decorations.

Outsourcing: The Ukrainian IT outsourcing market is demonstrating an annual growth rate of 40 percent and employing 15-20 percent more personnel, generating well-paid and stable employment. Among the IT outsourcing companies located in the country is Miratech, whose clients include a number of Fortune 500 companies. New IT contracts from the U.S. will boost both the IT outsourcing industry as well as the Ukrainian government by building both commercial revenue as well as the associated tax base.

Economy: In February 2014, Russia halted its funding of the Ukraine government when the Ukrainian revolution ended YANUKOVYCH government. Later that month, Ukraine formed an interim government allowing the international community to begin its efforts in stabilizing the Ukrainian economy, and in March 2014, included an International Monetary Fund (IMF) assistance package of 18 billion.

In October, Ukraine’s parliamentary elections solidified the government’s complete break from Russia and a new parliament that will be dominated by pro-Western parties, allowing for the country’s turn toward European integration.

In October, Ukraine’s parliamentary elections solidified the government’s complete break from Russia and a new parliament that will be dominated by pro-Western parties, allowing for the country’s turn toward European integration.

Even with the IMF’s bailout, Ukraine has much to do in building its economy,, which has been struggling to recover from a recession and has been fighting to overcome a capital outflow.

However, in October NATO Secretary General Jens Stoltenberg showed support: “NATO continues to support Ukraine’s sovereignty, independence and territorial integrity within its inter-nationally recognized borders. An independent, sovereign and stable Ukraine, firmly committed to democracy and the rule of law is key to Euro-Atlantic security. I look forward to working closely with President Poroshenko, the new parliament and government to further our long-standing and distinctive partnership. The Alliance remains committed to

supporting Ukraine in its wide-ranging reforms within the framework of the NATO-Ukraine Commission.”

It will be a long road ahead to fix Ukraine’s economy and expand the outsourcing industry as the tasks facing its new parliament are enormous; with its newly energized pro-European path, structure and organization, it looks like Ukraine is on the path to get it done.

For more, see our Pulse blog on “Ukrainian IT Outsourcing 2014: Trends, Initiatives and Expectations.

MINISTRY OF FOREIGN AFFAIRSKYIV, UKRAINE

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VIETNAM IS HOME TO BREATHTAKING TEMPLES AND PAGODAS, WHICH REFLECT THE COUNTRY’S DIVERSE RELIGIONS, TRADITIONS AND CULTURE.

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Location: Southeastern Asia, bordering the Gulf of Thailand, Gulf of Tonkin and South China Sea

Population: 92-plus million

Language: The official language is Vietnamese with English becoming increasingly favored as a second language; other languages include French, Chinese, Khmer and mountain area languages (Mon-Khmer and Malayo-Polynesian)

VIETNAM New Investments and Confidence

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Vietnam is home to breathtaking temples and pagodas, which reflect the country’s diverse religions, traditions and culture. Surrounded by water and peppered with mountains, residents and visitors alike enjoy outdoor activities like paddling the serene waters of Lak Lake, Ha Long Bay and the Red River Delta; rock-climbing, kite-surfing, and mountain biking. Vietnam is famous for its ethnic outdoor markets, street kitchens and always-entertaining, water puppets.

Outsourcing: Vietnam continues to be an attractive location for company-owned delivery centers due to low operating costs, according to Supply Wisdom, Neo Group’s cloud-based data, alerts and guidance solution (formerly Global Supply Risk Monitor). The cost of living in many Vietnam cities (including Hanoi, Ho Chi Minh City) is lower than other outsourcing destinations, the service found.

Economy: In 2007, Vietnam joined the World Trade Organization to promote more competitive, export-driven industries. In 2010, they became an official negotiating partner in the Trans-Pacific Partner-ship trade agreement. In 2012, they unveiled an expansive “three pillar” economic reform program to allow for the restructuring of public investment, state-owned enterprises and the banking sector.

In October, Vietnam decided to lower the ceiling on dollar and dong deposits; a move that could help boost its economic growth. With strong exports and a booming manufacturing sector an economic growth of more than 6 percent is expected in 2015.

Vietnam plans to restructure its state enterprises; since January of this year more than 70 businesses have sold shares (equal to all of 2013) and plans to reach a total of 200 companies before the year is over. To date, they are slowly rolling out of debt and have resolved approximately 54 percent of bad debt in the banking system.

In May, Grant Thornton Vietnam surveyed fund managers and private equity professionals, with more than half of them stating they would increase the allocation of

investment funds to Vietnam in the coming year.

New investments are on the horizon. South Korea’s Samsung Electronics Co Ltd is planning to invest $560 million to build a consumer appliances production complex in Vietnam. In 2011, KKR invested $159 million in Masan Consumer Corporation, a noodle and fish sauce retailer; in 2013 they doubled their investment.

According to the Japan Business Association in Vietnam (JBAV) and Japan External Trade Organization

(JETRO), as Japanese businesses are deciding to shift production from China, Vietnam is currently a top priority; 50 percent of Japanese small- and medium-sized enterprises (SMEs) are considering outbound investment to Vietnam. With more and more firms investing in Vietnam and interest continuing to develop, it seems confidence in the Vietnamese economy is growing.

NATRANG, VIETNAM

Stories by Kate Tulloch-HammondIAOP has partnered with Neo Group to provide corporate members Supply Wisdom, formerly Global Supply Risk Monitor, a unique subscription-based service that provides real-time data, analysis, alerts and guidance on global locations and suppliers.

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2015

STATE OF THEINDUSTRY

produced in partnership with

TO TAKE PART IN THE SURVEY*Buyers go to:

www.IAOP.org/SOTI/CustomerProviders & Advisors go to:

www.IAOP.org/SOTI/PA

*All who participate by December 15 will receive a copy of the survey report and will be entered in a ra�e to win one of two free seats to IAOP’s 2015 Outsourcing World Summit.

2015

STATE OF THEINDUSTRY

produced in partnership with

TO TAKE PART IN THE SURVEY*Buyers go to:

www.IAOP.org/SOTI/CustomerProviders & Advisors go to:

www.IAOP.org/SOTI/PA

*All who participate by December 15 will receive a copy of the survey report and will be entered in a ra�e to win one of two free seats to IAOP’s 2015 Outsourcing World Summit.


VIEW FROM THE C-SUITE


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

KPMG’s Dave Brown brings an interesting personality mix and background to the table when advising global Fortune 500 companies on large complex deals

with shared services, outsourcing and global business services.

Hailing from the Land of Maple, Brown, who has been living in the U.S. for a dozen years and works globally, has what some call his “Canadian flair,” which means he’s laid-back and affable when meeting and working with individuals

from diverse cultural backgrounds.

Dave Brown

& His Canadian

Flair


We currently have resources in about 52 countries and that continues to grow 20 to 25 percent each year. The network provides consulting support to clients around the entire sourcing life cycle – everything from sourcing strategy, delivery model design, implementation and monitoring. We focus on governance, compliance and risk management.

P: How is KPMG different than EquaTerra?

D: KPMG has a greater breadth of experts in areas like tax. When a client sets up a shared services center, there are a lot of tax implications. KPMG has a large dedicated tax department as well as internal controls, regulatory and risk. We have complete divisions around KPMG’s 155,000 people around the world. That helps our member firms’ clients tremendously when selecting an outsourcing provider or the landscape of where these delivery centers are located around the world.

P: You also head the Global Business Services Center of Excellence for the Shared Services and Outsourcing Advisory Practice and Global Business Services (GBS) practices. Tell me about that role.

D: We developed the COE to further enhance best practices around the world and provide our clients with more insights through additional research, specifically around this next evolution of delivery models. We advise clients on the benefits of creating a shared service center or their own COE or how to leverage the outsourcing relationships they have today. We do that out of the COE as opposed to having individual consultants do it. We bring the 1,000-plus people around the world to grab their insights toward one client.

P: Tell me about how your clients are using outsourcing these days?

D: Outsourcing was predicated on labor arbitrage and it got a lot of momentum from the clear cost reductions. But it’s not just about cost optimization. The focus has become optimizing the strategic and operational value out of these service provider relationships.

But he’s also motivated by two other traits that were instilled into him in his 20s by former leaders who became mentors: One is a keen focus on operational execution and doing what you say. The other is the drive to never stopping pushing and moving outside your comfort zone.

Combined, they make Brown highly effective in his role as Global Lead Partner for KPMG’s Shared Services and Outsourcing Advisory Practice, a world leading practice that serves clients in more than 150 countries, where he is known as a collaborative leader who can unify organizations.

“Our success has been largely attributable to our ability to bring the collective capabilities of our global firm to our global clients,” says Cliff Justice, Partner and U.S. Leader, Shared Services and Outsourcing Advisory Practice. “Dave Brown is a unique leader in this regard. His diplomatic and humble style is underpinned by a deep background and sophisticated knowledge of sourcing that gives him the credibility needed to bring together a large network of accomplished, senior partners from an amazing range of cultures and geographies to work together and solve our clients’ most complex problems.”

Brown joined KPMG in 2011 through its acquisition of EquaTerra, where he held various senior level positions and has more than two decades of experience in GBS strategy, IT and Business Process Outsourcing, shared services, sourcing management, contract renegotiations and finance budgeting, planning and analysis.

Pulse talked with him about technology trends in outsourcing (also see our forecasts story), Latin America, how he re-charges his brain with tween novels and the eye-opening experience of seeing the U.S. with two teenage daughters in a RV.

P: Tell me about your current role?

D: I am the Global Lead Partner for KPMG’s Shared Services and Outsourcing Advisory Practice, which includes 1,000 dedicated resources around the world.

he re-charges his brain WITH TWEEN NOVELS AND THE EYE-OPENING EXPERIENCE OF SEEING THE U.S.

WITH TWO TEENAGE DAUGHTERS IN A RV.


CURRENT ROLES: Global Lead for KPMG’s Shared Services and Outsourcing Advisory Practice and head of the Global Business Services COE.

PREVIOUS:• Held senior leadership positions at EquaTerra • Senior advisor at TPI • Held various financial and IT positions in the Telecom industry

EDUCATION, LICENSES & CERTIFICATIONS:

• MBA, Finance/Accounting, Queen’s University in Kingston, Canada• Bachelor of Finance/Accounting and BA (Sociology/Psychology) University of Windsor, Windsor, Canada

DAVID J. BROWN AT A GLANCE


I N T E RV I E W: DAV E B ROW N

Clients are still looking for cost reduction but it’s in a different way. They are looking for operational efficiencies and having the best practices moving forward whether that’s through process improvements, or consistently applying your lessons learned around the globe to their operations.

P: What are some of the new trends you’re seeing?

D: We’re seeing a focus around technology enabling the process improvement. So you hear a lot of “as a service,” for example, business process as a service. We’re also seeing the hype around robotics and process automation coming to life. It’s accelerating its evolution. With robotic process automation, you are looking at completely eliminating human interventions into these business processes. I think you will see that maturing over the next 3 to 5 years. For the outsourcing industry, this is where the technology will come into play, beyond the labor, and that will be a major shift for service providers today.

P: Tell me about the research done and key findings on “The State of Services & Outsourcing in 2014: Things Will Never be the Same.” The report found that one in four firms are making significant investments in shared services, a marked increase from past years.

D: We are seeing an increase in these blended sourcing models. Clients are still looking to outsource pieces of their work but they are also looking to integrate their internal processes and operations with third parties. With technology, customers are deciding whether they need to purchase the software themselves or whether they leverage a third party that can provide both the technology as well as the services side.

From our surveys, we found the table stakes of costreductions, service quality and good contract terms are core and what every service provider has to provide. When we talk about real innovation, technology has to be part of their core solution going forward.

P: You just returned from a trip to Buenos Aires and have worked with Latin America for the past five years. Tell me about opportunities in Latin America for outsourcing?

D: Latin America is such a diverse continent. There are positives and negatives for every country on why service providers are locating operations there. IT outsourcing has been in Latin America for an extremely long time. IBM just celebrated their 100th year of being in Argentina.There’s so much hype and opportunity in Latin America. Every year, there’s anticipation that it will explode. The market size is so big; it’s got to go at some time. From an industry standpoint, once someone goes, they will

all follow. They are waiting for some of the big deals.

P: How does your Canadian back-ground help you in your global role?

D: I think it serves me well going to different countries with such diversity. Outsourcing in some countries is still viewed as that bad word and there’s discussion of what does it really mean. I think some of that Canadian flair or Canadian temperament serves me well. It’s been an interesting last few years in the global world and being able to see the different cultures and how their companies attack the business a little bit differently when it comes to outsourcing.

P: What is your leadership style?

D: I am a collaborative leader. I pride myself on team first and

everybody is part of that team. We need to have everyone working together to be successful. My role is a global role and it’s critical for us to ensure we have that leadership mentality out in the field to serve our clients. Our clients expect us to be collaborative and unified. In some cases, our clients aren’t. They can be very fragmented, large complex multinationals that have acquired numerous companies over time and are looking for us to be unified and pull them together. That style I provide helps with the teams around the world.

IF SOMEONE ASKS ME

“what will you do

next?” I say, “I don’t

know.”I’M ENJOYING WHAT I’M

DOING AND WORKING HARD AT THAT. I HAVE A GOOD TEAM ON THE GROUND, AND WE’RE

GROWING AND PROVIDING SOME GREAT ADVICE

TO OUR CLIENTS. THAT’S WHAT I’M FOCUSED ON.


P: What is the best advice you received?

D: A CFO gave me the advice to plan for today and not a five-year plan. What it really meant was do the best you can at the job you have today, no matter what it is and those opportunities will come to you over those next 3-5 years. You don’t have to aspire to have a certain title or position because then you tend to only look for that. If someone asks me “What will you do next?” I say, “I don’t know.” I’m enjoying what I’m doing and working hard at that. I have a good team on the ground, and we’re growing and providing some great advice to our clients. That’s what I’m focused on.

P: Who are your role models?

D: Two people in particular stand out. One was a complete operational execution type of individual and leader. Everything was about the actions of the plan and making sure you’re executing to plan. That was instilled into me. I’ve always been a big believer in when you say you’re going to do something, you do it. The other person was a charismatic leader who could sell just about anything to anybody. He always kept pushing the envelope. What I admired about that style was never settling for just get-ting there. He taught me to keep pushing myself to get out of my comfort zone and take on new challenges. This individual put me in some roles early on that I never would have thought I should have taken on and it created whole new skill sets and opportunities. Stretching boundaries, coupled with operational excellence, are two ideals I strive for – although it is not always easy because at times, those ideals can be in conflict.

P: What do you like to read?

D: I stay up to date on trade magazines. The Internet and social media make it easy to see more publications than ever. There are regular blogs that I read. The Economist is always good on the plane. For book selection for leisure, my wife says I’m a tween novel seeker – Percy Jackson, Harry Potter. It also goes back to some advice I received. I have a couple of degrees – one is in psychology. I’ve always believed that the brain needs to redirect to be able to get back and focus on the business side. I enjoy those books because it takes your brain into a different mindset to come back and re-focus.

P: What do you like to eat on the road and at home?

D: I go to a lot of different countries and embrace the local cultures. I do try the local food. The most surprisinglocal dishes I’ve had were sea urchin and foie gras. My children love Food Network and Iron Chef and you always see that stuff and I thought there was no way I would try it. I tried it and was pleasantly surprised by how much I enjoyed both. When I am home, I try to have a sit down family meal at the dining room table. I’m still a big believer in having a meal in the house with your family to just catch up on what’s going on with no phones at the table. It’s really more just about connecting and having traditional food – spaghetti, meatloaf and mashed potatoes.

P: Tell me about your family life?

D: My 15- and 14-year old daughters were home-schooled for the past five years and just went back to school. We bought a 40-foot RV and would go on two to three month trips around the U.S. I would fly to where they were on a Friday and we would explore. It is a real eye opener when you go across the country to see what these places are really like. We live in Orlando and have a winter house in Florida. It’s the Canadian dream.


3Pevolution Consulting; Abbvie; Accenture; Account Control Technology; ACE Group; Aegis;

Alliant Global Strategies; Allianz Life; Ancestry.com; Automaton Anywhere; Banque

Nationale; Bird & Bird LLP; Book Builders Pty Ltd; Canadian Blood Services; CaptiveAide

Advisory Private Limited; CBRE; CentLing Technologies Co. Ltd.; Coleago Consulting; Cost

Down Revenue Up; Dawn Willis & Assoc Inc; Delhaize Group; Digital Pace Technologies

LLC; Duke Energy; Dyson; EnVigil; EQHO Communications Ltd.; Equifax; Ernst & Young;

Federal Home Loan Bank of Chicago; Fischer; Frankfurt School of Finance & Management;

Georgia State University; Global e-Business Operations Sp. z o.o.; Grainger; Guardian Life;

HGS; Hochschule für Technik und Wirtschaft; HP; IIMI; IMS Health; InfoBeans, Inc.; Infosys;

Intel; IQNavigator; ISG; J.P. Holding & Investments; KellyOCG; Kraft Foods; Liberty Medical

Supply; Manulife; Merck & Co.; MetLife; Microsoft; Minacs; Multicare Services (I) PVT LTD;

National Bank of Canada; Novitex Enterprise Solutions; Olswang; Pactera; Pratt & Whitney;

Procter & Gamble; Prudential; Rio Tinto; RLS Consulting; RUMJog Enterprises; Seaview

Consulting; Securitas Security Services USA, Inc.; SirionLabs; Smarter Good (Digital Divide

Data); Suite 900 Group; Sutherland Global Services; Tata Consultancy Services; TATEEDA

LLC; TBB Global Logistics; Tech Mahindra; Teleperformance; Telerx; The Guardian Life

Insurance Co; The Hackett Group; The Pythian Group; Time Warner; Turner Broadcasting

Systems; UnitedHealthcare; UPS; USAA; Verizon; Viridio; Walgreens; Walt Disney; Wells Fargo;

WorldLink; WorldwideBMO; and XL Group.

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

WELCOMENEW MEMBERS

The following corporate and professional members have joined or renewed their membership with our association:


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

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

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

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

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

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

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

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

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

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

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

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

•Global Supply Risk Monitor – A unique Web-based product that enables clients to monitor, predictand manage the various risks in theirservices supply chain across countries,cities and suppliers, in real-time.Corporate Members receive one free monitoring service.

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

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

Readers of PULSE can receive 10 percent off of standard membership rate of $345. Go to: www.IAOP.org/PMregistration and enter offer code IAOP-PM-0412.

Special Professional Membership Offer[

[


LETTER FROM THE DIRECTOR

Dear Colleagues:

With this being our Trends & Forecast issue, I would like to make a prediction for the coming year: Certification will continue to increase in importance and demand will rise for Certified Outsourcing Professionals (COPs) as integral players to the success in outsourcing relationships.

While I may not be a fortune-teller, it’s a trend IAOP has seen over the last three to five years that continues to gain momentum. In my role I see it first hand and regularly hear from our many COPs about the difference the certification has made in their careers and from leading companies about how working with COPs leads to improved outcomes in their organizations.

If you haven’t come across a COP yet in your job, I’ll foretell you will one day soon. COPs are all around us:

• As thought leaders and experts quoted in Pulse magazine and on Firmbuilder.com• As judges for IAOP’s global award programs• As honorary recipients in our Outsourcing Hall of Fame • As leaders in CSR initiatives • As valued members on IAOP committees • As frequent speakers at IAOP events and conferences• As authorized trainers for our outsourcing curriculum • As volunteer guest presenters at our live classes• As chapter chairs and members • As track chairs at The Outsourcing World Summit • As key contributors to our research

And I predict that a COP may very likely make your next outsourcing engagement better just by their involvement.

Entering the New Year, we salute our COPs. The industry and our association simply could not exist without them – and this is a trend I am confident will only continue.

Best regards, Pamela O’Dell

PROFESSIONALPULSE PAMELA O’DELL is the Director

of Corporate & Professional Development at IAOP and can be reached at +1.845.452.0600 ext. 121 or at [email protected].

ENTERING THE NEW YEAR WITH A SALUTE TO COPS


IAOP CONGRATULATES

THE NEWLY CERTIFIEDCOP-GOV (Advanced Governance Certification)Bill Elliot, COP-GOV, Engagement Manager, NCR AustraliaLawrence Kane, COP-GOV, Senior Leader, ITI Strategy, Sourcing (Fortune 500 Company)

COP (Certified Outsourcing Professional)Estee Alvarado, COP, Global Business Manager, USAAPraveen Anthony, COP, Director BPO Services, Kannal ConsultingPaul Becker, COP, ITI Sourcing Specialist (Fortune 500 Company)Victoria Briggs, COP, IT Sourcing (Fortune 500 Company)Mary Ellen Capineri, COP, Senior Director, Sutherland Global ServicesWayne Ezell, COP, Executive Director, USAAVladimir Khodosh, COP, Partner, Kirkland & EllisAlan MacLeod, COP, Senior Manager, Ernst & YoungIngrid Matze, COP, Program Manager, INGJack Sanderson, COP, Manager, Boston ScientificSuzanne Willis, COP, Client Relationship Manager, USAA

aCOP (Associate Certified Outsourcing Professional)David Brien, aCOP, Senior Consultant, Ernst & YoungDan J. Brown, aCOP, Senior Consultant, Ernst & YoungAnthony D’Angelo, aCOP, Contract Advisor, USAAChris Green, aCOP, Senior Consultant, Ernst & YoungWeston Jones, aCOP, Senior Manager, Ernst & YoungMiranda Li, aCOP, Senior Consultant, Ernst & YoungSarah K. Matthews, aCOP, Senior Manager, Ernst & YoungJeremy Pass, aCOP, Senior Manager, Ernst & YoungMatthew Pentis, aCOP, Senior Consultant, Ernst & YoungJohn Richard, aCOP, Managing Director, CBREPerryn Stewart, aCOP, Management Consultant, Ernst & YoungDaniel Zoltowski, aCOP, Manager, Ernst & Young

DATES:Upcoming WebinarsDial in for a complimentary 60-minute program to learn about certification options and how IAOP’s designations can benefit you and your company.

2014: Nov. 19, Dec. 10

2015: Jan. 7, Jan. 28, March 18, April 8, April 29 Starting at 12 p.m. EST

COP Master Class & Outsourcing Governance Workshops2014:COP Master Class – Nov. 5-7, The Netherlands

2015:COP Master Class and Governance Workshop– March 30-April 2, Dolce Atlanta-Peachtree, Atlanta, Ga.

COP Master Class and Governance Workshop– Feb. 10-13, The Netherlands

COP Master Class May 20-22, – The Netherlands

COP Master Class and Governance Workshop– Sept. 22-25, The Netherlands

COP Master Class – Nov. 25-27, The Netherlands

TRAIN AT THE SUMMITTake advantage of these workshops taking place at The 2015 Outsourcing World Summit in Phoenix, Az. on Feb. 18:

• COP Advanced Intensive Workshop • COP Accelerated Application Process • Outsourcing Certification Primer

ROCKY MOUNTAIN TRAINING PROVIDES SOLID OUTSOURCING FOUNDATION IAOP wrapped up its 2014 North American public class schedule in Denver, Colo. on Sept. 15-18 with a large group of outsourcing professionals from across all spectrums and experience levels. The four-day training focused on the full end-to-end process of outsourcing and the best practices to assist organizations with improving their process outcomes. Attendees completed the training not only with a better understanding of how to implement these strategies, but also with access to a larger community of global professionals. The next North American COP Master Class will be held in Atlanta, Ga. in March 2015.

© Can Stock Photo Inca. / dimaberkut


CHAIRS: KPMG, Alsbridge, Pactera, PwC, Delhaize America, Duke Energy & Wells Fargo

RECENT EVENTS: The inaugural Charlotte Chapter kick-off meeting on Oct. 16, hosted by KPMG, attracted more than 25 attendees to discuss “Trends in the Outsourcing Industry.” IAOP Chairman Michael Corbett and CEO Debi Hamill joined to kick off the new chapter.

UPCOMING NOT TO MISS: The next chapter meeting on Jan. 22 will feature IAOP Hall of Fame member Mike Salvino, Group Chief Executive, Business Process Outsourcing of Accenture, as the guest speaker. The meeting will be held at the offices of Delhaize America, 2110 Executive Dr., Salisbury, NC.

WHAT IT’S ALL ABOUT: “Charlotte is really taking off as one of the places to be in the Southeast and will continue to do so,” said Spencer Bethmann, Lead Chapter Co-Chair and Senior Associate KPMG. “Companies such as MetLife and Chiquita have recently moved sizeable operations here and we see that trend continuing.Like the city, we also see the outsourcing industry continuing to grow, change and evolve. If our first meeting is an indication, many more constructive discussions will come out of the group and I’m excited to see where the collective group will take us.”

WHY GET INVOLVED: Joining the Charlotte chapter is an opportunity for organizations and individuals who are customers, providers and advisors of outsourcing to get a better understanding of what is happening in the industry, have meaningful discussions among peers, and enjoy networking and meeting new people.

HOW TO LEARN MORE: The chapter plans to meet quarterly. See our page on the IAOP website under chapters and join our LinkedIn group. “We encourage you to get involved and join-in on the conversation,” Bethmann says.

ROUND UPCHAPTER

UPCOMING CHAPTERMEETINGS:NOVEMBER• Nov. 19 – New York Chapter Meeting, chaired by Deloitte, Viacom and Hess Corporation, will discuss “Creating a People Joint Venture,” beginning at 5:30 p.m. at the Morrison & Foerster LLP offices, 250 West 55th St., New York.

• Nov. 26 – Singapore Chapter, chaired by Olswang LLP, Infosys and KPMG, together with the Project Management Institute, Singapore Chapter (SPMI) will meet from 6:30 to 9 p.m. at Theatrette, Singapore Post Centre, 10 Eunos Road 8 in Singapore. A panel will discuss “Effective Business Transformation – How to Deliver this through Sourcing and Project Management”

DECEMBER• Dec. 9 – Governance Chapter Webinar – details to follow soon.

JANUARY• Jan. 8 – Rocky Mountain Chapter Meeting – watch for more information coming.

• Jan. 15 – New England Chapter Meeting – Save the date!

The calendar is frequently updated. To stay current, checkIAOP’s Web site for details at www.IAOP.org /calendar.

Professional Members may attend an unlimited number of chapter meetings. IAOP also offers complimentary Associate Membership that allows non-members to attend a chapter meeting as our guest and access select online resources. Create your Associate Membership now and then register online for the chapter meeting of your choice.

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IAOP and its China-based chapters hosted hundreds of outsourcing professionals in key cities as IAOP China Week addressed the hot topics facing the industry here. The event demonstrated the rapid rise of China’s economy and technological leadership is reshaping not just China butthe Asia Pacific region with ambitions for the entire globe. Representing IAOP in China during the week was IAOP’s Global Ambassador, Matt Shocklee.

CHAPTERS HOSTING EVENTS: BEIJING, QINGDAO/SHANDONG, NANJING AND SHANGHAI

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CHINA NEWS HAPPENING: THE RECORD INITIAL PUBLIC OFFERING ON SEPT. 19 BY ALIBABA GROUP HOLDING LTD., A CHINESE E-COMMERCE GIANT, WAS A TIMELY ANNOUNCEMENT DURING CHINA WEEK FURTHER FUELING THE DISCUSSION ABOUT NEW BUSINESS MODELS AND CHINA’S ROLE IN THE GLOBAL OUTSOURCING INDUSTRY. VISIT IAOP’S CHINA MICRO WEB SITE FOR TRANSLATED INFORMATION AND UPDATES AT WWW.IAOPCHINA.ORG.

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Highlights:• Sept. 16 - IAOP members kicked off China Week with IAOP’s Beijing Chapter, co-chaired by Pactera and ISG, hosting several enlightening presentations on how China enterprises need to drive business transformation through advanced technologies and strategic outsourcing relationships.

• Sept. 18 - IAOP’s Qingdao/Shandong Chapter in Jinan, co-chaired by ReSourcePro and Jinan Bureau of Commerce, held a half-day meeting where industry and government leaders collaborated on how to increase Chinese global outsourcing competitiveness through innovation.

• Sept. 19 - IAOP was a major supporter of the 7th China International Service Outsourcing Cooperation Conference (CISOCC) in Nanjing and proudly announced its newest chapter in Nanjing, in cooperation with Nanjing Association of International Outsourcing Companies (NASO).

• Sept. 22 – The week concluded in Shanghai as Bleum, Inc., chair of IAOP’s Shanghai Chapter, held a lively evening meeting on the topic of the emergence of the “China-for-China Outsourcing Business Model.”

CHINA NEWS HAPPENING: THE RECORD INITIAL PUBLIC OFFERING ON SEPT. 19 BY ALIBABA GROUP HOLDING LTD., A CHINESE E-COMMERCE GIANT, WAS A TIMELY ANNOUNCEMENT DURING CHINA WEEK FURTHER FUELING THE DISCUSSION ABOUT NEW BUSINESS MODELS AND CHINA’S ROLE IN THE GLOBAL OUTSOURCING INDUSTRY. VISIT IAOP’S CHINA MICRO WEB SITE FOR TRANSLATED INFORMATION AND UPDATES AT WWW.IAOPCHINA.ORG.

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With the Asian Free Trade Agreement (ASEAN 2015) starting Jan. 1, the Summit on Sept. 23-24 at the Mandarin Orchard in Singapore addressed opportunities facing companies and governments as the region moves to a single marketplace. Themed “Enhancing Sustained Value for Regional Integration,” this high-quality program was produced by IAOP in partnership with Outsourcing Malaysia. Delegates discussed the challenges ahead, value of outsourcing, what outsourcing means in various parts, sourcing maturity and other topics.

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Among the speakersdelivering impactful presentations were Neo Group CEO Atul Vashistha, COP and digital expert and former Nike Program Director Brian Brower on “Digital Disruption & Impacts on Global Talent;” as well as Signe Adamsen, aCOP, marketing manager ISS, on “New Ways of Working.”

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Panels engaging the audience included “Impact Sourcing: Models, Socio-Economics & Pursuit of Inclusive Development,” moderated by Debi Hamill, CEO of IAOP; and “Free Trade Zone, Economic Transformation, Markets & Growth: Role of Sourcing& Technologies in Enabling Transformation,” moderated by Rob Bratby, managing Partner, Olswang.

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