HCL Injects Innovation Into The Next Generation Of Product Development Services

Charles Green
In 2011, Forrester first reported on a new breed of mature and collaborative product development services (PDS) offerings coming to market, which we called “product development services 2.0.” These services are a stark contrast to traditional staff augmentation engagements. How are they different? Providers take greater responsibility for the end-to-end life cycle of the product, promise a higher level of industry and domain expertise, and offer a value-add service addressing key client business concerns. The transition has been gradual up to now, but there are finally signs of a more rapid shift.
 
One of the key announcements made in recent months was HCL’s launch of its “Service Line Unit” (SLU) initiative. Here are the key elements of this initiative:
 
SLUs are a packaged set of PDS offerings, bringing together relevant HCL tools, partnerships, processes, and delivery competencies to address specific pain points.
In developing these offerings, HCL systematically investigated the white space and the key business challenges in its chosen target markets. In turn, it invested in building out its own IP and domain knowledge to address these challenges.
Ultimately, these investments and the targeting of specific business concerns will help HCL frame its service offerings in the context of key business outcomes, such as time-to-market.
 
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Oracle’s FY2014 Financial Results Point to New Opportunities for Sourcing Professionals

Duncan Jones

Sourcing professionals already understand the importance of monitoring financial performance to assess risk in their key suppliers’ ability to deliver commitments. Sometimes sourcing professionals can also find valuable negotiation leverage in the financial results of their key suppliers, as is the case with Oracle’s Q4 2013 numbers . In my opinion, the revealing aspects that you can use to increase your bargaining power over the next couple of quarters, include:

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IBM Delivers Replicable Business Innovation Services Across Clients

Fred Giron

I concluded my March 2013 report on the role of software assets in business innovation by proposing that “The combination of software assets, strong domain expertise, analytics, and as-a-service delivery models will increasingly allow traditional service providers to reinvent the way they deliver business value to their clients.” I was glad to hear that IBM recently announced a deal with L’Oréal that directly supports this position. The announced engagement actually includes all these components:

  • The procurement domain expertise of IBM Global Business Services addresses business pain points. L’Oréal USA grew rapidly over the past few years via an aggressive acquisition strategy that caused indirect procurement processes to remain highly disparate. The company knew that there was a significant gap between negotiated savings and realized savings in its indirect procurement operations. IBM GBS consultants brought strong procurement expertise to work with L’Oréal’s existing sourcing team to transform existing processes. IBM Global Process Services (GPS) category experts are working with L’Oréal to develop and implement category sourcing strategies.
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A New Service Architecture For Business Innovation

Fred Giron

The IT services industry is being challenged on two opposite fronts. At one end, IT organizations need efficient, reliable operations; at the other, business stakeholders increasingly demand new, innovative systems of engagement that enable better customer and partner interactions.

My colleagues Andy Bartels and Craig Le Clair recently published thought provoking reports on an emerging class of software — smart process apps — that enable systems of engagement. In his report, Craig explains that “Smart process apps will package enterprise social platforms, mobility, and dynamic case management (DCM) to serve goals of innovation, collaboration, and workforce productivity.” In other words, smart process apps play a critical role in filling gaping process holes between traditional systems of records and systems of engagement.

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Sourcing Professionals Need A New Approach For Dealing With The Software Giants

Duncan Jones

Many clients ask me for help in dealing with very large software companies who, in their opinion, always seem to have the upper hand in negotiations. "How can I make myself less dependent on X?" they ask, or "how can I cut the amount I have to pay Y each year?" They're CIOs or sourcing professionals who are used to being able to push suppliers around, threatening to kick them out if they misbehave, and they struggle to accept the reality that their normal tactics won't work with the likes of IBM, Microsoft, Oracle, SAP. My advice is, get used to it. These companies have grown so big and profitable that they will dominate the business technology market for years to come. Yes, they will face competition from younger companies, but they generate so much cash and have such strong embedded positions in so many enterprises that they can always acquire the upstart, or develop a product that beats it in most deals. 

However, the software giants' huge power isn't necessarily a bad thing. Their scale enables them to spend far more money on development than their smaller rivals, and this usally results in excellent  innovative products. Yes, they can also be inflexible, siloed, frustrating, bureaucratic - but when it comes to software development, size matters. So there really isn't much point in questioning whether the world would be a better place if these companies were much smaller than they currently are. Instead, we should accept reality and learn how to survive and thrive under their rule.

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Peru: Will Its Economic Boom Extend To The Technology Sector?

Charles Green
I recently returned from attending the opening of Belatrix Software’s new office in Lima, Peru, where I was also able to meet with representatives of the Peruvian Association Of Software Producers (APESOFT), which aims to promote the software industry in Peru.
 
I was keen to travel to Peru to gain a better understanding of one of the fastest-growing Latin American economies, as well as to put this growth into the context of its technology industry. Peru was recently ranked fourth in Bloomberg’s list of the top 20 emerging markets, just behind China, South Korea, and Thailand but ahead of other prominent Latin American destinations such as Mexico and Brazil. It is rated as one of the most attractive Latin American markets for doing business.
 
Peru has one of the fastest-growing economies in Latin America, and although GDP growth has recently slowed slightly, its forecast for the medium to long term is positive. Although by total size, it is dwarfed by Brazil (whose GDP is approximately 14 times larger than Peru’s), the IMF is expecting continued growth at approximately 6% in 2013 and 2014.
 
However, despite its fast-growing economy, Peru’s IT market is one of the smaller and more nascent Latin American markets. Forrester estimates that total Peruvian IT purchases in 2012 were $2.5 billion — compared with $23.4 billion in Mexico and $46.5 billion in Brazil.
 
Some key observations:
 
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Making Mobile Payments Pay Off In Asia

Clement Teo

The Asia Pacific mobile payment landscape is currently in an exciting phase of development, but remains fragmented. Asian telcos will likely need to wait at least another two to three years to see traction with mobile payments. Here’s why:

  1. User readiness. Let’s face it: Cash and credit/debit cards still dominate the payment landscape, and are a lot more convenient to use. While penetration of feature and smartphones has grown substantially in Asia, not many people actually use their phones for mobile payments. Even in markets like Australia and South Korea, cash and credit cards remain highly popular among consumers. And if demand remains low, merchants will not deign to accept mobile payments — creating a vicious cycle.
  2. Infrastructure development. Telecom infrastructure in many Asian countries remains uneven with spotty coverage, (e.g. India and Indonesia). Without proper network access, mobile payments will not propagate outside of urban areas, if at all. While Globe’s Gcash has seen some level of success, the truth is that mobile payments remain nascent in the Philippines specifically and in Asia more broadly. In addition, there is still limited handset support for mobile payments (e.g. some Android models are not able to work with a service). Australia’s Commonwealth Bank went ahead with its m-payment launch after deciding not to wait for incompatible handsets to catch up.
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More Application-Related Services Options in China — And More Potential Risks

Gene Cao

China’s GDP growth slowed to 7.7% in Q1 2013. While below market expectations, this growth rate still ensures strong continued IT spending, as local organizations seek to meet ongoing demand for products and services. At the same time, we expect Chinese government stimulus packages to drive increased consumer demand, particularly in the retail, supply chain, and banking industries. Chinese organizations wishing to capitalize on these opportunities are currently seeking ways to transform their business and decision-making processes and broaden their product portfolios. This, in turn, has driven increased interest in third-party service providers as organizations seek to augment limited (or, in some cases, nonexistent) internal IT capabilities.

Recently I spoke with IT managers at two local Chinese companies; they shared their recent experience with third-party service providers.

  • A top 5 Chinese insurance company worked with multiple service providers to strengthen its CRM data mining and analysis capabilities. While this company started its CRM implementation project in early 2006, it still had limited capabilities to manage fast-growing customer data, which was essential given the increased presence of foreign insurance companies in the local market. In response, the company sourced application development and modernization services from Accenture, primarily to define a data architecture and deliver analysis capabilities. With these new functions added to their existing CRM systems, the company enhanced customer data analysis capabilities, grew related sales, and improved customer experience/loyalty.
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Central And Eastern Europe – Capturing The Imagination Of Services Buyers?

Charles Green

 

IT services buyers are changing their buying requirements. Increasing demand for technologies that drive business innovation agendas, from cloud to analytics to mobile, is creating dramatic upheaval in the technology services market. One result of this, is that while organizations are looking to consolidate their supplier base in traditional service areas like applications outsourcing, buyers are looking to a broader range of providers to acquire specific expertise for these innovation-led engagements.
 
In light of this shifting backdrop, there is an argument that this will present opportunity to some of the so-called “alternative offshore” locations beyond India. In other words, buyers will look to other regions to try and find some of these specific skills and resources.
 
My recent report examined this with respect to Central and Eastern Europe (CEE).
 
The services market in the CEE region remains highly fragmented, with a large number of relatively small providers. However, the region does have a set of key strengths which will position it strongly in the minds of buyers as these broader technology shifts take place. In particular:
 
  • Aspirations of young digital natives in the region to become programmers or engineers
  • Educational systems focused on key strengths in engineering, math and science
  • Leading providers focus on high-end software engineering with expertise in agile development
  • Leading providers focus on product development services which helps differentiate from traditional IT services
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A BYOT Plan Needs to be Built Element by Element

Clement Teo

 

At a recent Enterprise Mobility event, I spoke with a few Asia-based IT directors about their journey in the age of consumerization of IT, and how they were dealing with Bring-Your-Own Technology (BYOT) at work. Their responses ranged from ‘fear of the unknown’ – as in ‘how do we deal with this trend?’ to ‘paralysis by analysis’ – as in ‘let’s arm ourselves with as much information as possible, and analyze it to death.’

The issue is – their employees are already accessing corporate email on their own mobile devices – which means that these IT managers are scrambling to catch up to managing BYOT in their organizations. In fact, an IT head at a large FMCG organization admitted that he did not know where to start managing BYOT.

Security and compliance were key concerns for these IT folks, and their concerns are valid. Trend Micro predicts, for example, that 91% of targeted attacks begin with spear-phishing, a highly targeted type of phishing aimed at specific individuals or groups within an organization. This was heightened in a recent spear-phishing attack on a South Korea bank. The security provider also predicts that there will be 1 million malicious Android apps in the wild by the end of 2013 – another red flag for organizations coping with the rise of Android devices at their work place.

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