Analyst Eric Simonson on travel, analytics, and who's who on Twitter

Posted: 08/22/2013

Eric Simonson is one of the most respected analysts in the sourcing industry. He leads Everest Group's research practice and spends his time trying to figure out how companies like yours can get more value out of their global services efforts—how to make the right sourcing decisions, how to evaluate location strategies, how to manage suppliers, and what’s the right delivery model.

As would be expected, he travels and networks extensively. His most creative thinking, he tells me, happens on planes, in hotel lobbies, or in cars—in the relative quiet between meetings and research. It’s when conversations are still fresh in his mind, and he's less concerned about interpretation that he recognizes patterns, connects the dots, and identifies the oddities that stand out from the norm. These "big picture insights" help to tie the actual data together.

Luckily, Eric gets a lot of opportunity to think. Over the course of a year, he’ll visit at least two dozen North American cities, and makes up to eight International trips. Most of the time, he's heading to large cities where his clients are headquartered, or where industry events are being run. As a result, he has seen a fair share of Orlando, Vegas, New York, and Boston. He also gets to see a lot of London and Delhi. It's the networking that happens on these trips that help Eric create some reality around the data from his research.

Barbara Hodge finds out what he’s thinking about as he passes through airports this month.

Barbara: Contacts are everything in your industry. How do you make sure that you've always got a ready supply of fresh leads? Where do you find them?

Eric: I get most of my contacts from events, or through personal introductions of existing contacts in my extended network, for example on LinkedIn. The longer you work in this industry, the more people you know, and the more people you know, the more introductions are made. We all help each other, and we've all got a lot of overlapping interests.

Barbara: Using social media is part of the job for most of us these days. It can get out of hand, though, and not everything is useful. How is it helping you?

Eric: LinkedIn is by far the most valuable tool for me. I also use Twitter to follow developments (and my sports interests), but I find it is generally used as an extension of PR activities, and most of our clients don’t really consider it as an information source. I check LinkedIn a few times every day to see what people are recommending. As a company, we also use LinkedIn to broadcast our findings and perspectives and to get responses from the industry. After Google and Bing, it’s is the third largest source of traffic to our website. We don't tend to use the groups much, however, as spamming is fairly high. Instead, I have found the individual news feeds to be most relevant. That’s where I post my updates.

Barbara: Which individuals do you follow through social media?

Eric: I follow Gianni Giacomelli from Genpact, on LinkedIn. I know him in a personal context as well as a professional capacity, and like to keep up with his thoughts, especially with regards to disruptive trends. In the HR space, I have found that there is a more focused effort on people keeping themselves relevant. For example, Franz Gilbert, who is an HR practitioner, and Naomi Bloom, who covers technology trends are two people I follow. In the finance domain I haven't found as much relevance as in HR. So I guess you could say that I'm still looking…

Barbara: Which other sources do you use and trust?

Eric: I would rate the Economist first and foremost, both in print and online. They do a great job in providing that 50,000-foot view across a lot of different topics and they hit the geo-political as well as societal trends. That's important in our industry. I also find that a significant part of their in-depth surveys are relevant to the sourcing space in one way or another.

Barbara: You just got back from a trip to London. What did you mull over on the plane, on your way back?

Eric: What's on my mind at the moment is that people looking for greater value are increasingly digging into what’s unique for their industry segment. Once you’ve optimized the flow of the process, the next step is to make the process smarter. And that means providing industry specific context.

Another point related to building smarter businesses is analytics. We hear a lot about SMAC [Social Media, Mobile, Analytics, Cloud], but I believe it's the analytics element, in the long run, that is the truly unique part of this. Cloud is just another innovation in a long line of innovations of service delivery. In the past, we had lap tops, mobile devices, servers versus mainframe, etc. Cloud is just a new way of delivery. Important and disruptive, yes, but in terms of being truly new—no.

Social media and the mobile element again simply reflect a new way of how people engage or interact. It's an innovative continuation of an existing trend similar to how email and earlier generation cell phones provided new ways of interacting, capturing information, and so on. But analytics is where we are seeing real change happening. The challenge now is not just to analyze what has been done, but to become predictive and prescriptive. In other words: here's what you should do as a result of what we believe will happen. That's a real novelty, and I expect to see a lot more development in this space, in future.

What’s also happening is that, as well as considering their own data, a lot of analytics people are trying to figure out how to append external data sources to their analysis, preferably in real time. So going forward, it’s going to be less about monthly and weekly reports, and more about what is happening right now.

This is particularly relevant when managing financial transactions, especially the risk element. We can all relate to the experience of credit card transactions setting off a red flag alert—whether correctly or incorrectly. Now, consider the ability to apply the same alerts to a retail context, or to commuting patterns, or in interactions with people trying to sell you new services. If you can cover the market context from a more holistic viewpoint, offerings and interactions start to become a lot smarter.

Barbara: We’re starting to see some ERP systems, notably SAP, embedding a richer data analysis experience into their solutions. In the case of SAP, it’s called HANA. What’s the significance of this?

Eric: HANA is about in-memory analytics. A bit like Google pre-scanning and storing information to speed up search results, HANA takes advantage of memory being comparatively cheap, and the ability to store information in processors so that numbers can be crunched far faster. It is transformative in terms of speed, which impacts choices— it facilitates a different set of decision-making. But it is still just an enabler, and by itself these kinds of developments are not enough. Consider the Internet. When it came along, companies started putting their stores online, as another way of consuming their products or services. The real value, however, is linked to analyzing consumer shopping behavior, as Amazon has done so well, and spotting opportunities to cross-sell, or suggest alternative items, or predict your preferences. Without these analytics-based insights, the Internet would only represent an alternative form of "store." So, just doing something faster is not the solution; doing things smarter is. And that is where all the development is focused right now.

Eric Simonson is Managing Partner of Research at Everest Group, and is based in Dallas. He leads Everest Group's research practice, a respected source for fact-based analysis and insight to assist companies in attaining more value from their global services efforts (e.g., outsourcing, offshoring, shared services) by optimizing locations, refining supplier portfolios, and aligning delivery models to changing needs. Everest Group's research practice combined with Everest Group's consulting services provides a distinctive ability to serve clients with a flexible range of options. ??Eric’s specialties are: global services, offshoring, outsourcing, offshore global in-house centers/captives, global business models, business strategy, value proposition and marketing alignment.

Posted: 08/22/2013

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