It felt like a rock concert! Not quite -- but as Phil Fersht and Lee Coulter from Research organization Horses for Sources, strode down the aisle for what was billed as the "Thundering Hooves" session – the Bonanza theme blared and the room collectively held its breath!
Punctured by laughs and industry jibes the three providers - consisting of Deborah Kops from WNS, Tiger Tyagarajan from Genpact, and Hugh Watkins from PA Consulting took on the client side - represented by Graham Russell of Astra Zeneca, John Transier of Unilever, and Simon Newton of Kimberly Clark to clarify some burning questions – not always fairly moderated by Fersht and Coulter!
Question to the Buy-side:
In answer to this question -- What phrase from your service provider makes your blood boil the most? -- what do you think was the leading response from the buy-side?After whispered deliberation, the "buy" family agreed: "We’ll bring you innovation" was the phrase that most riled them. And did this represent industry sentiment? Fersht and Coulter drew on a survey they’d run, which came up with the following:
- "That is out of scope" led with 52%
- "We have a revised schedule with new dates" came in at 17%
- "We’re doing everything we can to get the system back up" gained 11%
- "We’ll scope that out for you" had 9%
- "The problem is with your other supplier" ranked last with 5%
Question to the Sell-side:
In answer to this question: What phrase from your clients makes your blood boil the most? – what is the leading response from the sell-side?
The sell-side did not need much time - their answer: "Can you do it for a lower price than that?"
And how did that compare with the greater provider-side response? Based on their survey, the Horses for Sources folks shared these results:
- "We’re bringing in an advisor to help with contract renewal" led with 41%
- "We’ve been doing some price benchmarking" gained 32%
- "That isn’t my problem anymore" got 15%
- "But when we signed you promised us innovation!" came in at 5%
- "When I did it myself it was less expensive!" also featured, causing a lot of (sheepish?) laughs from the audience.
The Horses team then opened up a polling question to the room at large:
Q: How would you best describe innovation for business services today?
The top three responses were:
- Improving operational efficiency
- Finding new ways to improve productivity, and
- Developing new sources for revenue growth
In a recent survey, a question to the buy-side – "How important is achieving innovation from your provider in BPO to your operational leadership?"
Resulted in the following responses:
- Critically important 43%
- Quite important 51%
- Nice to have 6%
- Not at all important 0%
When asking the providers, "How much importance are your clients placing on achieving innovation beyond price reduction?" – responses were:
- Critically important 25%
- Some importance 52%
- Nice to have 19%
- No importance 4%
And so back to the family feud!
The next question to the buy-side family was, "To what extent has BPO met your expectations in terms of committing quality resources to your current engagement to achieve innovation?" Asked to guess at how the industry at large responded, our team ventured:
- Exceed 5%
- Met expectations 30%
- Somewhat disappointed 45%
- Completely failed 25%
By comparison, the Horses team revealed the true industry responses as follows – more positive, on average:
- Exceed expectations 4%
- Met expectations 54%
- Somewhat disappointed 41%
- Completely failed 1%
The same question to the buy-side: "To what extent has your primary BPO client met your expectations with their provision of quality resources to help them to achieve innovation for your business?"
This time the sharp skills of Tiger, Deborah and Hugh got it right, matching the market’s feedback:
- Exceeded expectations 8%
- Met expectations 47%
- Somewhat disappointed 41%
- Completely failed 4%
Pursuing this line, the Horses team posed a question to the sell-side: "What is primary reason preventing your clients from achieving innovation from your current BPO endeavours?"
The sell-side deliberated furiously! – and came up with: "A lack of motivation and incentive."
Checking against the market’s reaction:
- Waning executive support after signing 13%
- Retained staff not empowered 20%
- Insufficiently empowered governance teams 33%
- Ineffective change management and communications 36%
Put to the buyers: "What are the primary reasons preventing you from achieving innovation in your current outsourcing relationship?
More whispered giggles and the buy-side family came up with "There was no money in the contract for that!" The audience’s laughter seemed to signal a certain recognition!
By comparison, the market responds:
- Innovation means we have to pay for consultants 27%
- Firms care about driving down clots 23%
- Vendor does not know what innovation is 18%
- Vendor can barely deliver service 12%
They said they’d leverage the learnings of others…