And a Happy New Year

Well, back despite popular demand, this really is the last SSON blog of 2008 – and my last chance to thank you all for your support and assistance during the last year. It’s been a significant twelve months for the Shared Services & Outsourcing Network: as I pointed out in our last Gateway we’ve seen the relaunch of the website, the launch and upward development of our eAlerts, the growth of Shared Services News, as well as the ongoing success of SSON’s unparalleled events portfolio and regional Shared Services Excellence Awards, and the overall expansion of our network to bring in thousands more practitioners, providers and advisors from all around the world and right across the shared services and outsourcing space. But, once again, we couldn’t have done this without you; your help, attention and feedback have been invaluable in making this a very momentous and satisfactory year for SSON and on behalf of all the team I’d like to wish you all the very best for the next twelve months and beyond.

Of course, next year won’t be the easiest for the global economy and the obstacles which lie ahead are diverse and profound. For the shared services and outsourcing space in particular 2009 is very much uncharted territory, as the pressure to cut cost, increase efficiency and, generally, to do more and better with less continues to grow. However, if there’s any consolation it’s that there are many others in the same boat whose learnings and experience might prove invaluable: throughout 2009 SSON will be looking to connect you with as much of that experience as possible through our events, web content and networking offerings – as well as new functionality we’re bringing on-stream over the next few months. It’ll be a challenging, but exhilarating, year, and we look forward to spending it with you.

Time to go. I’ll be back blogging in January; meanwhile, you can as always send any feedback on SSON – including suggestions for what you’d like to see next year – to me here.

Thanks all: see you in 2009.

Jamie

PS: as tangential as it’s possible to be but: get a load of THIS!

Above the Parapet

So your predictions for next year are in, and published, and disseminated around the world… And now as promised it’s my turn. I have no doubt that these forecasts will be erroneous to the point of hilarity, but I’m a man of my word and having received dozens of submissions from you guys I’d be a pretty pathetic figure not to reciprocate. So here goes:

1. Currency. Next year will see a lot of headaches (or be one big headache?) for anyone responsible for planning a shared services strategy but currency will be one of the very biggest. Location decisions have never been particularly straightforward – especially for those torn between onshoring, nearshoring and any other –shoring you can consider – but with major currencies all seemingly in the process of correcting against each other the relative and absolute costs – particularly over the course of a long-term implementation – of establishing an SSO are as hard to calculate now as they’ve ever been. (Look at sterling: the predicted parity of the pound and the euro means that some offshoring decisions for UK companies may not now make sense on purely cost-based reasoning – or might now involve forced moves much further afield to locations where significant labor arbitrage benefits can still be found.) Even the most able and experienced currency experts have been less willing than usual to put down forecasts for market behaviour next year. Nevertheless, here’s me putting money where my typing fingers are: I see 2009 ending with €1=$1.30, £1=€1.05 and $1=¥100. And I’m prepared for your laughter come 2010. Although not so prepared that I’m willing to take a punt on where the rupee will be in 12 months’ time.
2. China. While the Chinese economy’s set to grow next year, unlike most western equivalents, it’s by no means the rosiest of pictures. Exports are already being hit by decreased consumer spending in the US and elsewhere and its own financial sector appears to sit on increasingly thin ice. The Chinese government will have to look around for ways to boost overall exports while manufacturing declines. Therefore I wouldn’t be surprised to see fairly hefty state support for exactly the sort of service exports that India’s been spewing forth in recent years. People have been waiting for a long time for China to go full-throttle on BPO: I think this year will be the year. Whether there’s enough fuel, in the form of demand, for this acceleration remains to be seen.
3. Provider market. I’m by no means alone in believing we’ll see a wave of consolidation among providers in 2009. TPI’s Peter Allen believes by the end of next year we’ll see “four to six large, dominant providers”; I’m going for the upper end of that estimate.
4. Public sector. It’s a no-brainer, this: consolidation and expansion of shared services in all levels of government in the US, Canada, the UK, Australia and elsewhere in the West, as the public sector looks to greater efficiency to help counter the crippling effects of recession and the huge cost of bailing out the banks. This will also lead to a proliferation of megadeals between state players and major providers; expect the fireworks to come when governments attempt to keep outsourced jobs in-country.
5. The “list” debate to resurface. To finish, one purely for the community this: 2008 saw a big debate in various fora about the efficacy (and in some cases legitimacy) of the various lists and rankings of providers and advisors given by certain organisations – naming no names – throughout the year. This will come back with renewed vigour in 2009 since the questions haven’t been answered to any degree of satisfaction. I’m also going to predict at least one lawsuit as a result of the resumption of this debate…

So there we go. No doubt I’ll be proved catastrophically wrong. I’ve already gone wrong simply by virtue of writing this blog: I said in my most recent post that I’d be issuing these predictions in my last blog of this year: however, I’m going to be back tomorrow before I skip merrily off on vacation with a quick look back at 2008 in SSON. Reliable eh?

Until then: have you ever encountered anything better/worse than this?

Jamie

The Perils of Prognostication

Only a day to go before submissions close on SSON’s epochal (you better believe it) “Predictions for 2009” feature; I’ve been loving reading the entries so far and I’m sure you’ll feel the same when we publish the best of them at the end of the week.

While going through your masterpieces I was thinking about my own predictions for 2009. Other than predicting (with the help of the Mesoamerican Long Count Calendar) with total accuracy how long I’ll be paying for Christmas, it was a tough ask to come up with anything with complete confidence – certainly I don’t have a list to match my co-blogger Phil Fersht’s forecasts. However, I can’t reach out for predictions from you guys and not go the extra yard myself – so next week in my last post before Christmas I’ll be putting my views up to be blasted down over the next twelve months (be gentle with me…).

One of the problems – a most significant one – is that the second half of 2008 absolutely annihilated so many hitherto unshakable certainties. Who could have foreseen only a year ago that by the turn of 2009 we would be living in a world where the US president-elect was an African-American with the middle name “Hussein”; where several western governments – including that bastion of economic liberalism, the United States – had effectively nationalised major financial institutions; where oil prices would stand at the end of the year at effectively one-third of what they were halfway through it; and where Oprah had finally turned her back on dieting for good? Not I: too ridiculous to contemplate. But all those things have happened – and who can say what 2009 will bring (apart from our hardy correspondents of course!)?

But of course those of you looking to make major decisions next year simply can’t stick your heads in the sand and pretend this unpredictability isn’t happening. It’s time to step up to the plate, like it or not: reputations just have to go on the line as organizations look to stay afloat using every weapon in their armories. Trying to pick the right offshore spot to outsource to, for example, when currencies are behaving like the BFG after a few glugs too many of his finest frobscottle, might seem an impossible task – but it’s got to be done regardless.

Tangentially, but on the subject of offshore outsourcing: Soeren Dressler from the Offshoring Institute wrote to me yesterday demonstrating some strong opinions about what he sees as some very worrying trends. Over to Soeren:

“In recent months many people believe that there would be a new trend of ‘insourcing’ meaning that BPO and ITO have failed on a great scale that most providers are not able to deliver. Hence, companies need to take back processes in-house in order to re-stabilize and ensure quality. There might be many insourcing activities going but the truth of the matter is that it’s not providers that have failed but the companies starting the outsourcing process in the first place. Insourcing of formerly outsourced activities is a clear statement of complete failure on the client side. It demonstrates clearly that project managers in charge have not assessed correctly the risks and complexities of these kinds of projects, that they have chosen the wrong providers and locations and displayed very, very poor project management skills. So the ‘trend of insourcing’ is a result of lacking knowledge and skills on the companies’ side in order to manage ITO/BPO engagements correctly. And the same applies to captive nearshore/offshore engagements. The key challenge for 2009 is developing skills and knowledge. We at the University of Applied Sciences are the first and only that have developed a master program on BPO – we are addressing the urgent need for outsourcing knowledge proactively.”

Nuff said? You can have your say too: let me have your thoughts.

Jamie

Nudge-Nudge, Wink-Wink

Sometimes all it takes is a nudge (as Richard Thaler might say, although he’d probably be a little more eloquent) to get things moving… Following my call for 2009 predictions in my last blog and Wrap I was pleased to receive a near-cartload of them over the last couple of days. Seems like plenty of you have put your thinking caps on. Predicting the future can be a risky business – I liked a few of these – but you’ve jumped in with aplomb. Fair play to you – and keep ‘em coming. We’ll be publishing the best ones next week just in time for the festive period.

On the subject of predictions: there’s been a plethora of mixed messages in the Indian press this week about various forecasts regarding possible job losses in the BPO sector next year. It’s all got very labyrinthine: see here and here for examples. But it appears there may be more than meets the eye here: in an email exchange earlier today I received the following from an anonymous, but much-appreciated, correspondent:

“…this 250,000 is a number which is not clear i.e. a part of it is supposedly jobs to be lost and a part is new jobs not being created…so, for example, if I had predicted to grow by 1000 heads and ended up getting only 500, I am losing 500 jobs!!! This to me makes no sense. My understanding of this is that this is more political. Most BPO companies have been set up under the old tax regime called the STPI regime. This regime will come to an end in June 2009 meaning all these companies will lose their tax free status from next year onwards. Basically, they want more sops from the Indian government and this includes extending the STPI regime by few more years….and in an election year, the government is willing to listen to some of this….so, the industry is talking of huge job losses to get the attention of the government….unfortunately, there is no data to back this….”

Veeeeeeeeeeeeeeery iiiiiiiiiiiiiiiiiiiiiiiiiiinteresting Mr Bond (not his real name)… Anyone with anything to add to this, drop me a line: anonymity respected of course.

Bye for now,

Jamie

I Predict a Riot…ous 2009

Today – which is, incidentally, the 40th birthday of the computer mouse – I received a big (metaphorical) festive bundle of your predictions for 2009. And the first thing that struck me was a wave of viscera-twisting horror as I realised that despite pushing it out through our e-newsletters, LinkedIn group, individual emails and the Twilight Bark, I hadn’t mentioned our predictions feature in my last blog.

So a brief recap: we’re putting together a series of articles featuring your predictions for the next 12 months in shared services and outsourcing. We’re looking for short-ish (a couple of paragraphs) submissions outlining one event, issue, trend, idea, product – thing, basically – that you believe will make headlines or change practices in the space during 2009. It can be as off-the-wall or as mundane as you like; the only criterion is that you can’t hide behind a mask of anonymity. Whatever you predict, you’ve got to back up with the full force of your name and good standing…!

The deadline for submissions is Monday December 15th. So far we’ve got a wide range of responses – some frankly ludicrous, others at first glimpse extremely perspicacious – but I want more more more. So let’s have ‘em. You can send them to me at Jamie.liddell@ssonetwork.com – we’ll be publishing selected responses across SSON products and in associated media, and I’ll make sure I do better at publicising the results through this blog than I did at announcing the feature in the first place.

Moving ever onwards: as promised, earlier this week I published my interview with BPO legend Raman Roy (nobody has yet informed me they’re launching a US GAAP course in India – my offer of a free ad stands but the clock is ticking like the cheek muscles of a sleep-starved speed freak) while – also as promised – today I’ve put up the podcast of my chat with Unilever’s Christian Kaufmann. I’ll also take this opportunity to give another plug to last Friday’s Weekly Wrap featuring interviews with First Group’s Richard Emslie and Sunil Savara of Foundation 4 Life. Because that’s the kind of guy I am.

Coming up soon on SSON: a roundtable on shared services in Latin America and how they’re coping with the economic turmoil; interviews with practitioners from Central and/or Eastern Europe in advance of next month’s Shared Services Central & Eastern Europe event; and we get up close and personal with Lisa Ross, formerly of FAO Research and now with Genpact in the US. Keep all your feedback, and suggestions for new content, coming to the usual address.

I’m sure some of you will be gearing up for Christmas parties about now. Try not to do this.

Cheers!

Jamie

Shine On, You Crazy Diamonds

Yesterday, quite out of the blue – apart from the several months of begging – I finally got to interview Raman Roy, boss of Quatrro, ex-head of Spectramind, previously of GE and TCS and, basically, a very solid claimant to the title of Father of the Indian BPO Industry. And it was worth the wait: not only did he come across as a thoroughly good gent (the image of his dream of bouncing a grandchild on his knee and waving out to the BPO industry he helped to build – I’m assuming there may be some kind of live streaming involved – was enough to bring a lump to the throat. Or maybe that was me swallowing my mint) but he also gave a thoroughly good interview – which you can read next week. Incidentally, according to Roy, “not a single college, institute, university, polytechnic in India teaches US GAAP” [Generally Accepted Accounting Principles] – that’s the kind of gap in the market that makes fortunes, folks. I’ll give you a free ad if you can found one before Christmas.

But you don’t have to wait until next week to read quality SSON content, of course: check out our latest roundtable on “the Crisis and Shared Services – an Asian Perspective” – chaired by the ever-high-calibre Hugo Wilkinshaw of Deloitte, who wraps up in a determinedly glass-half-full manner:

“I know it’s difficult at the moment to see too many bright lights and rosy pictures, but actually almost all SSCs must be feeling a lot more empowered; there’s a lot more focus on people turning to them for help with the business, there’s expansion of scope, there’s new opportunity: the only situation I can see where it’d be a problem being in shared services is if you’re in a place where your organization actually completely fails, and then frankly you’re in real trouble. But I would say it looks like you’re in a massive high if you’re in a shared service center as long as your organization’s still going. We had a bit of a discussion internally around this and we think it’s a good place to be right now. It’s time to shine.”

Time indeed. Just in time for Christmas too.

On that note, and as I slide out into another icy London night: aren’t we all lucky we didn’t book a trip to this particular corner of Lapland this year?

Jamie

That’s a Wrap

Friday again – amazing, it seems like it happens almost on a weekly basis – and a date notable for seeing the launch of SSON’s Weekly Wrap, a podcast in which I combine interviews, news, comment and classical music (ok, not really) to, hopefully, not-too-emetic effect. You can listen to the first instalment now: once you’re done laughing, let me know what you think.

Earlier today I interviewed Liz Mackay, Group Head of HR Services UK, AXA, about her organization’s HR transformation journey which was launched around six years ago. You can get the full story when I put this podcast up on the site next week, but one of the salient points to emerge was that yet again one of the biggest obstacles to the process was ensuring robust buy-in from the very top. I’ve lost count of the number of times I’ve heard this over the past few months but I guess there’s no real way to avoid it completely; the best remedy seems to be that which Liz and her team utilized: demonstrating through solid metrics the absolute worth of the new set-up. Despite all the evidence there still seems to be a great degree of scepticism regarding shared services in some quarters. Maybe the downturn and the increased reliance on shared services we’re observing will change all that. Or maybe not. Maybe this time next year we’ll all be living in caves. Which would definitely be another negative for the housing market.

On a radical tangent: I had the pleasure of meeting Phil Fersht in the flesh for the first time yesterday along with a couple of SSON colleagues. It was an all-too-brief pleasure, but we had time for – as well as a couple of refreshments – a good chat about the prospects for the global economy next year, and about a couple of the more notorious characters from around the SS & O space. I look forward to many more, and more protracted, such occasions.

I’m off. Enjoy your weekend. This will help.

Jamie

Shiver, Caressed

There was a cornucopia of takeaways from the 8th Shared Services & Outsourcing Exchange, as anybody who was there will testify; for me, though, the resounding phrase of the two-day event was a very simple and by-no-means-original one: “it’s not just about doing more with less; it’s about doing better with less”.

Those words (I have paraphrased liberally but hey, that’s my prerogative) came out of the CXO Forum which opened the Exchange, at which CFOs Andrew Tinney (Deutsche Bank), Anna-Karin Stenberg (Vattenfall) and Jerome Andries (Eli Lilly), along with the panel’s chairman Richard Payne of the BBC, gave a few of their own experiences and then turned their minds to the pressing issues of the day (in the form of an open-mic Q&A session) which, of course, tended to be (dis?)coloured by the ongoing doom and gloom oozing from the pustulous carcass of the global economy. Jerome Andries it was who, in response to a question posed by yours truly about the possibility of there having been a crisis-induced strengthening of the shared services model, opined that “better with less” was the order of the day – an opinion which, I found through various interviews, chats and close-closeted mutterings over the next two days, is shared by at least a substantial proportion of the Exchange’s attendees.

“Better with less” is, surely, if not an entire academic field in itself, then at least a healthy diploma course – but chief among the questions arising seems to me to be a glaringly obvious one: why wasn’t “better” being achieved in the days of “more”? Has it taken the worst financial crisis since the Depression to shake shared services out of a somewhat self-satisfied and over-resourced slumber? (NB all enraged practitioners: that was a rhetorical question) Or – the flipside to that – is “better” just a demand from panicky execs who only have “less” to offer?

Surely the answer must be a combination of those two extremes? Yes, some SSOs have been meandering along somewhat (as Alsbridge’s Elaine Harrison discovered during her recent survey) and there’s no doubt that many organisations have been caught napping by the economic whirlwind; however, it’s also true that the ball wasn’t dropped by the rank and file, but by those at the top who couldn’t see that all good things come to an end eventually – and who now are making implausible demands of their foot soldiers in a last-ditch defence of possibly untenable positions. Yes, shared services will have to do better; but so will everyone else, and if “better with less” is the dish of the day, then it’d better be served at the top table too.

Moving away slightly from my attempt to break the record for most different metaphors in one blog post, and keeping a safe distance from the anagram generator (Shared Services = Aches Served, Sir) I re-discovered last night while reminiscing about my (in? vain?)glorious college years: the CXO Forum which kicked off the Exchange (and which initiated this missive) is now available in its near-entirety as a series of podcasts on the SSON site; check them out here. Of course, there’ll be more content from the Exchange emerging over the next couple of weeks.

BREAKING NEWS: On Friday – just in time for the sixteenth helping of turkey (I’ve got a mean recipe for turkey and ice cream; if anyone’s interested, mail me) – I’m launching our new Weekly Wrap, a radio-type podcast bringing you a selection of interviews, commentary and other editorial bric-a-brac that’ll give you the perfect end to every long week at the coalface. I’ll be linking to it on the homepage and we’ll be blasting the link out on the Gateway e-newsletter too, so you’ve got no excuse for missing it. As with the rest of SSON, your input on this is vital; please do email me your feedback including suggestions for content, interviewees and general ego-stroking. Any death threats will be less gratefully received.

That’s my lot. Those of you in the US, have a great Thanksgiving (I may pop my head in – should I bring ice cream?); the rest of you, have a great, er, day. And remember: Shared Services = Deserves Chairs (I did like “Shared Services = Ravished Recess” but this is most definitely a family show).

Jamie

Life Moves Pretty Fast

A whirlwind couple of days for your faithful correspondent, including crossing London so often between the National Outsourcing Association’s Sourcing Summit and SSON’s UK lair that, if I didn’t set some kind of record, I surely qualified for a Frequent Tuber (NB: not a recurring potato. But it should be.) pass. If there were one. Which of course there is not. Because London’s transport system is itself a record-breaker.

The reason for this peripatetic period can be seen (or, rather, heard) in the form of the podcasts I recorded at the SSON end of the route: DHL’s Carl Barnes on quick wins in the finance function (absolutely vital listening, though I say so myself, for any organization currently looking for a few pennies to rub together – you never know what a quick audit might glean); and Diageo’s Jan Comhaire, looking at how Credit & Collections practitioners can prove even more indispensable than usual in these critical times. Feedback, as always, is more than welcome.

Between such larks I’ve been gearing up for next week’s 8th Annual Shared Services and Outsourcing Exchange 2008, from where I’ll be reporting on anything not covered by Chatham House rules (I’m particularly excited by the unique CFO Forum which opens the event on Monday – you’ll be able to access extracts of this by the middle of next week) and at which I’m hoping to squeeze the juice from some of the finest minds in the business to pour into my very own content cocktail upon my return. (Note to self: design SSON-branded cocktail. Market. Move to Aruba.)

Almost done in this (mercifully) briefer-than-usual blog – but first a couple of notes. Those of you who aren’t members of our SSON LinkedIn group – why not? All SSON members can sign up and we’re looking forward to seeing you there. And for those of you who enjoy reading this blog twice, in two different parts of the electronic ether, we’ve now set up a page on WordPress. It’ll be the same as this one except with a different background. Excellent.

Bye for now,

Jamie

Edukashun Edukashun Edukashun

I had a very enjoyable chat yesterday with Vandana Saxena Poria, OBE, the CEO of GetThroughGuides.com (GTG) (you can listen to the podcast of this interview here). Vandana’s organisation recently conducted a study into the BPO space in association with the ACCA, looking at providers in Ireland, C/E Europe and India. We discussed the burden felt by BPO providers when recruiting from what often seems to be a relatively under-prepared and under-qualified talent pool – a burden then exacerbated by sky-high attrition rates. This is obviously a huge issue for even (especially?) the biggest players, and the findings of the GTG/ACCA study chimed with comments made to me earlier in the year by, among others, Genpact’s Pramod Bhasin and Amitabh Chaudhry of Infosys BPO, and Vandana was nothing if not forthright:

“It’s a major major problem, not just in India but around the world. Because attrition levels are so high; firms spend all this money training up these people in getting the right accents, giving them the right skills to deal with the IT or A/P or whatever function it is – and then within six months or a year that person’s left and gone on to the next center.”

There doesn’t seem to be any easy solution to this conundrum since even the most advanced state-sponsored education program wouldn’t pay immediate dividends, and the jobs in question themselves don’t exactly compete with those of Hollywood Star, Sporting Hero or Shared Services & Outsourcing Network Online Editor in the glamour stakes. However, in one of the few silver linings so far glinting out from the economic stormclouds, worries about the strength of the job market in India in particular are expected to put the brakes on the attrition rate as job-hoppers realise it might not be the most auspicious time to walk out on a job. Presumably the same will apply in Ireland, one of the other foci of the study, as that country’s economy enters what I’m pretty certain will be an Celtic economic Gotterdammerung. Or maybe Ragnarok. It’s hard to work out which it is when one’s so busy trying to dodge these tumbling heavens.

Less exciting and important an event than Vandana’s podcast it may be, but I suppose it’s worth pointing a weekend-y spotlight on the G20 summit about to take place in the US. UK Prime Minister Gordon Brown (remember him? The man who abolished boom-and-bust?) spoke today in advance of the summit proper on the need to resist the temptation to assume protectionist policies: protectionism is apparently the “road to ruin” (although apparently there’s a shortcut involving alcoholism, gambling and infidelity which, let’s face it, sounds a lot more fun). This is all very well – but I’d love to be a fly on the wall for his next chat with President-elect Obama…

Brown: Protectionism is the road to ruin.
Obama: Who is this man? And what’s wrong with his jaw?

The BBC quoted Brown as saying “I think what we need is a route-map to bring the economy back, so that people feel more secure about their jobs, about their homes, about the prospects for the future” (prompting an immediate and passionate endorsement from the Committee for the Closing of the Stable Door after the Horse has Bolted). Forgive my temerity but what we actually need, Gordon, as well as a map, is a vehicle, some fuel and a navigator who wasn’t even a teensy-weensy bit responsible for getting us lost in the first place.

Have a good weekend people. It officially starts here.

Jamie