During a recent global analyst event in Paris, Capgemini presented its strategy to a panel of market and financial analysts. It hinges on two main objectives: improving the resilience of the organization in an uncertain economic environment — especially in Europe — and finding new levers for margin improvements.
From an operations point of view, Capgemini intends to continue leveraging the usual suspects: industrialization, cost cutting, and accelerating the development of its offshore talent pool. It also aiming to optimize its human resource pool via a pyramid management program aimed at, among other things, allocating the right experience level to the right type of work.
More interestingly, the company showcased some of the global offerings it has put together or refined over the past 12 months. Capgemini’s strategic intent is to develop offerings addressing three major client-relevant themes – customer experience, operational processes, and new business models. The offerings will be enabled by a combination of cloud, mobile, analytics, and social technologies. Among the set of offerings managed globally, I found the following of particular interest due to their emerging nature and Capgemini’s interesting approach to developing them:
Services budgets represent 10% of annual IT operating and capital budgets[i], but Forrester sees considerable evidence that the influence of these IT Services vendors is proportionally higher — and growing dramatically. While there are several reasons for the rising importance of your services partners, at the most fundamental level Forrester sees that:
Business professionals need immediate access to tech-enabled innovation. Most strategic business initiatives now have an underlying technology component. Service providers come to the table with the tech savvy, vertical market expertise, and best practices to make these initiatives work.
IT professionals can’t keep pace with business demand. The volume and complexity of technology demands from business professionals means that traditional IT organizations have difficulty keeping pace. They too need to work with the best mix of IT service providers to meet the demands of their business. Effective supplier management is quickly becoming the most essential skill in IT organizations.
Hi everybody. I'd like to get your opinion on the discussion about RfP versus RfS (Request for Solution). How do you see the difference?
I am always using the term RfP for the activities to invite a vendor to provide an offer for solving business issues. So as part of an RfP, we at Forrester describe the problem, the current state (CMO = Current Mode of Operation) and the to-be-expected future state (FMO = Future Mode of Operation). Despite the fact that we may describe the client's intention of the future state, we always ask invited providers to propose alternative solutions to the problem.
In this respect, I am currently reluctant to accept that we need another term besides RfT, RfI, RfQ, or RfP. From my experience, RfQ and RfP are the two things that differentiate between a commoditized service where you describe what the supplier has to deliver and an RfP in which you ask for a more "solution-oriented" proposal from the supplier. Rather than complicating things by adding new acronyms, I think it would be much better to use existing, well-established terms to differentiate between what we are looking for as a supplier's response.
Microsoft is gradually improving the way it allows for Bring Your Own Device (BYOD) and other scenarios in which many employees use Microsoft on multiple devices. We’re getting growing numbers of questions from Forrester clients about this topic, and while Microsoft is making its approach fairer in some areas, it's also making it more complicated. One problem is that different Microsoft product teams continue to invent new ways to handle BYOD that are OK for their product but are inconsistent with how other product teams handle the same situation. Sourcing professionals need to understand all the different rules, so that they can work with IT colleagues to create a BYOD strategy that balances technical requirements and licensing cost, to take advantage of the available flexibility while avoiding the potential pitfalls. For example, Microsoft has announced cheaper, better BYOD support for the Windows client OS, but you might face significant extra costs for Microsoft Office if you enable it for BYOD unless you take care to avoid them.
Of course the fundamental problem is that per-device licensing is an obsolete model, so Microsoft should really enable BYOD by allowing per-user licensing, at least for Enterprise Agreements. However, since that isn’t going to happen anytime soon, sourcing professionals need to be able to navigate the per-device rules. Here’s as simple an overview as I can create:
Corporate customers of cloud services are not having much fun when negotiating with emerging cloud suppliers.
Forrester clients seeking support for their longstanding contractual preferences ranging from access to supplier data centers for due diligence to more robust terms for liability and mutual indemnity, just to name a few examples, are facing frustration when cloud suppliers refuse to accommodate them. While cloud suppliers themselves are mindful of their need to be more flexible for large enterprise customers in theory, actual concessions are few and far between, and in some cases customers either grin and bear it or walk away.
Is it only a matter of time before cloud suppliers accommodate the same kinds of concessions and flexibility routinely accommodated by traditional outsourcing firms? Not necessarily. It is tempting to think that increased flexibility on the part of cloud providers will inevitably grow as a consequence of greater maturity; the reality is more complex. The very outsourcing suppliers that have routinely accepted these requests are becoming less anxious to take additional risk in client engagements, especially while cloud suppliers are allowed to skate around potentially thorny issues like liability. Yes, the outsourcing suppliers are willing to provide an indirect contracting model for cloud services while taking on additional service delivery risk in many cases, but there are limits to their forbearance.
I recently finalized a report* on software asset (SA) based IT services, this time looking at vendors’ best practices in terms of governance, organization, skills, tools, and processes. Needless to say, the move to software asset-based services will have a huge impact on the traditional operating models of IT services firms.
Obviously, IT services firms need to learn from their large software partners to understand and implement specific software asset management processes such as product sales incentive schemes, product management, product engineering, and release management.
This will induce a formidable cultural change within the IT services vendor’s organization, somewhat similar to the change Western IT service providers had to undergo 10 years ago when they finally embraced offshore delivery models.
I see a few critical steps that IT services firms need to take in order to facilitate this shift towards software asset-based business models:
Build a client-relevant SA strategy. Building an SA base offering is not (only) about doing an inventory of the existing intellectual property (IP) that you have on employee hard drives and team servers. More importantly, it’s about making sense of this IP and building strategic offerings that are relevant to your clients by centering them aounrd your clients’ most critical business challenges.