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Guy Kirkwood's BPO Backchat

30 apr 2004

Hands up who wants to be the next Enron. Oh, it's obviously Nortel. CEO and CFO fired and the accountants are... No, not the obvious answer. But I suggest that the LLP at the end of Deloitte & Touche LLP's company name may become rather handy over the next couple of months.

29 apr 2004

Right, Liberata. General Atlantic Partners has placed Tom Butler as the new CEO of Liberata, replacing Glenn Timms. The real question is what happens next? Will Butler line the business up for a sale, or proceed with plans to IPO? My guess is the former.

One look at GA's portfolio is enough to convince anyone that the time for cashing-out is fast approaching. This is actually good news for the staff of Liberata. As the market as a whole is desperate for people with proper BPO experience, Liberata has been and continues to be a beacon of effective, profitable and well-run BPO deals in a continually maturing market. The firm has now got to be on every major players' shopping list.

28 apr 2004

In another indication that the market is really flying, Liberata have some important news. Unfortunately, it cannot be released until tomorrow. Stay tuned for a bit of analysis.

27 apr 2004

TPI has reported in increase in BPO and offshore elements in the deals on which it is advising. It is interesting that the firm then is still 80% ITO-focused and only 20% BPO-focused. I think it may be time to reappraise the marketing of the firm's services.

26 apr 2004

Gartner says it has found that there are six key processes needed to manage long-term multi-supplier outsourcing deals successfully.

  1. Strategy - develops the overall objectives, priorities, policies and procedures, and makes the broad decisions that define how the agreement will work.
  2. Membership - identifies the capabilities the company needs for its business and selects appropriate suppliers.
  3. Integration - builds and maintains disciplined cooperation between all the suppliers and the company. Includes defining and updating roles, responsibilities, priorities and performance targets for each.
  4. Equity - controls the commercial arrangements, e.g. funding, pricing, billing, asset ownership and intellectual property ownership.
  5. Audit - monitors the performance of all - not just suppliers - against agreed targets. Assesses four critical components: price and service level, the state of the contract and relationships, satisfaction, and "vision and alignment." Most importantly, monitors specific targets to improve performance and resolve problems.
  6. Feedback - deals with regular reporting, including lessons learned and supplies the information needed for short-term corrections and long-term enhancements. The feedback process provides information that makes it possible to look ahead, identify potential problems and anticipate required changes.

For a consulting firm, this is an excellent summation (IMHO).

22 apr 2004

I used to work and live in Scotland. It is therefore no surprise that the Scottish unions (possibly the most militant in the world) are agin outsourcing. In a report in The Herald (although I knew it as The Glasgow Herald), Hugh Scullion, Amicus's political officer in Scotland, said he was "alarmed" at the claim by Susan Rice, chief executive of Lloyds TSB Scotland, that offshoring is the "best thing that ever happened" to the country's financial services sector.

Ummm, Hugh, up until 10 years ago none of the jobs you are so vehemently protecting even existed, but don't let a bit of reality get in the way of your politics.

20 apr 2004

BPO will contribute seven per cent of India's GDP by 2008, says the NCAER. The contribution of BPO to GDP in 2001 was 1.4%. The industry is estimated to account for 19% of the incremental GDP growth till 2008.

19 apr 2003

Word of mouth - powerful for ideas as well as business development. Silicon.com has picked up my mini-rant from last week (15 apr below) about CGEY as a comment on its original article.

18 apr 2004

It is good to read a balanced precis of perceived problems with HRO created by Accenture HR Services and the CIPD.

15 apr 2004

And so we bid farewell to Ernst & Young Consulting. CGEY is to change its name in a EUR60m re-branding exercise to Capgemini. Hmmm, let's have a think here, Cap Gemini bought Hoskyns (a truly innovative and effective outsourcing company) years ago and did absolutely nothing with it. Ernst & Young had an effective (for a partnership) outsourcing business in Global Operate. What has "Capgemini" done with it? Squat. I think the firm needs to spend the EUR60m to cover its embarrassment.

14 apr 2004

One or two people may know that we work with Xchanging. Following the acquisition of RebusIS, the firm is growing it's operation in India. Xchanging's CEO David Andrews in an interview published by sify.com, said he plans to grow the firm's headcount to 10,000 globally with 3,000 of those to be based in India. This is a major investment and fillip to the offshoring movement.

13 apr 2004

A group of MEPs last week called for action from the European Parliament to protect data transferred in offshoring deals. Firms should already be putting controls in place to protect electronic data held offshore to reduce the risk of liability for breaches of data protection laws.

The MEPs' move followed a report from Ernst & Young, which warned that the growth of offshoring and associated risks meant there would be a "major regulatory failing within five years".

This is a serious compliance issue. It needs to be addressed today, or parliaments will legislate against the industry. You have been warned.

9 apr 2004

As a sure sign that the market is moving, the predicted move for the "big boys" to buy independent BPO firms is coming true.

I have a close relationship with General Atlantic Partners, one of the key VCs in the BPO market. I recruit for all of their portfolio in Europe. So news that IBM have bought Daksh in India comes as no surprise.

The price tag for Daksh, based near Delhi and India's third largest BPO firm, was not revealed but is thought to be about USD150m-200m. The deal is the biggest to date.

With Rebus sold to Xchanging and Northgate and now Daksh sold to IBM, I am confident that Liberata, Xchanging itself and even Exult, will get bought within 18 months.

8 apr 2004

Miss Jones, file this under "coals to Newcastle."

In a move that is sure to have US business services firms quaking, Infosys has announced that it is setting up a US-based consulting firm.

7 apr 2004

My reply to Cochrane's article (and a couple of the frankly barking comments from reviewers) has been posted by silicon.com.

6 apr 2004

Cochrane does it again... Peter Cochrane, writing his regular Uncommon Sense column for silicon.com, has hit the nail on the head of why offshoring is currently so attractive to India and China:

"During the dot-com boom thousands of Indian and Chinese nationals were recruited into Silicon Valley and other centres across the US and the EU. But when the dot-crash happened their companies abruptly laid them off without a second thought. Unable to find work they simply drove to the airport and went home to India and China. So these countries suddenly had an influx of well-educated, trained and experienced professionals. Could it be that these are the individuals powering the current outsourcing boom?"

5 apr 2004

Back from skiing refreshed, I found this excellent article by Peter Bendor-Samuel in my inbox. The real test of a strong HRO deal is expanding what is "in scope." This is an easy no-nonsense guide to getting it right.

Last month's blogs have not suddenly gone out of date, if you missed any, they are worth reading. Also check the archive.