Shyam Kerkar, AVP & Head, Marketing and Knowledge Champion for Business Process Services Tata Consultancy Services
If we look back over the last decade or two, there are two trends that stand out in all businesses. One of them is the move towards consolidating office based operations: whether they are front-office, mid-office or back-office. The other trend is the increase in regulation and government oversight thanks to incidents like Enron and WorldCom. These have substantially increased the pressure on the CIO, COO & CFO communities around the world - the pressure to have a lot more visibility to operational data, to seek insights and the pressure to deliver a lot more value as a business partner to the organization. The recent Global Financial Crisis has not helped - it has starved the CxO community of funds while the pressure to drive efficiency and effectiveness and the pressure to transform continues.
TCS recently conducted a blind survey across buyers, advisors and suppliers to gauge what each one of them felt about this situation and to gauge what they are doing about it. We received responses from 100+ buyers, 25+ analysts & advisors and 60+ suppliers. We had a cross-section of the buyer community represented in this survey with substantial representation across segments.
TCS asked buyers and advisors to prioritize the factors to be considered when embarking on a transformation journey to efficiency & effectiveness. More buyers chose "time to benefit" as one of the Top 3 factors than "scale of benefits" though scale of benefits continues to rank as the single most important factor that buyers consider. It is also interesting to note that the analyst & advisors who chose 'scale' are almost twice the number who chose 'time to benefit'. Immediate realization of benefits continues to lag behind as a critical factor when analysts look at it - but buyers give it an overall importance rating almost equivalent to the scale of benefits. The latter is not a surprise given the current macro-economic conditions.
Buyers continue to attach significant importance to in-house expertise available and peer group experience in choosing transformation initiatives. As Buyers move towards a Global sourcing model they can find the right partner to supplement the in-house expertise.
Analysts & advisors overwhelmingly identify aligning processes to industry best practices as the most significant transformation initiative. This is perhaps in line with their focus on the scale of benefit rather than immediacy of benefits.
Industry best practices evolve over time and are considerably impacted by the technology and infrastructure availability at the time. Quite often it is not possible to undertake the move to the golden ideal without making step changes in terms of simplification & harmonization.
TCS also asked the buyers to tell us about what has been done in their organizations about the transformation initiatives and the activities that they were planning in the near future. Seeking greater insights from available data is perhaps one of the key items that remains unaddressed across more than 50% of the organizations. Part of the driver to this could also be the buyer perception for the need to deliver the analytics ability from onshore or nearshore locations. The rapid emergence of some of the low cost locations in delivery of Knowledge services could see this changing.
The same question also indicates that more than 75% of the organizations have already undertaken some form of technology and infrastructure rationalization initiative and a similar number has attempted automation to eliminate labor.
What is interesting is that buyers believe that there is a significant amount of activity that remains to be done in the Technology arena with more than 60% of the organizations seeking to outsource this in one form or another.
We see interest in outsourcing all activities that drive efficiencies and effectiveness, with a small but significant portion of buyers seeking gain-share arrangements. This is even more evident when we asked buyers about ownership of specific aspects of business transformation.
Across the spectrum of activities 30-40% of the buyers are choosing a collaborative approach to managing transformation initiatives. A provider who can offer consulting and advisory capabilities in addition to being able to drive implementation collaboratively would meet the need of the hour.