Fun with Outsourcing…

Saw this on an outsourcing discussion group and had to share…  They’re talking about outsourcing architectural drawings to India.

Re: Paris?? so which projects you do can you send me a detail list in email so that we can mutually understand and exchange some projects..

		Reply From: CB Date: Nov/17/06 – 20:05 (GMT)
		Re: Paris?? Here is our project list. 1.)Paris 2.)Paris surrounding areas We would love to mutually understand and exchange but we have outsourced the projects that were outsourced to us to an outsourcer who outsourced them to another outsourcer who uses an exporter. It may take weeks to figure out where Paris is. We also may have difficulties in exchanging checks as we have sent our checks to a Nigerian bank. We are trying to unlock the funds of the dearly departed Mr. Smith. We have been assured that we will be rewarded kindly for our help in the process by freeing 10 million dollars in funds from the Smith estate. Sorry we can not be of help now. — It’s Friday!!!!!

¡Ay, caramba! Blogging is work.

I’ve been posting on the new ZDNet blog. They tell me it’s live, but there’s a glitch in the technology that is preventing it from showing up in the blog roll. You can view it here. I’m very interested in off-beat IT Services stories, so please email me (susanATitservicesadvisoryDOTcom) with any interesting ideas.

Hot Topic: Back to Backlash

I was reading Vinnie’s blog and he mentioned Tom Davenport’s pooh-poohing. When I returned to the business this year, and went to my first outsourcing conference in 5 years (see 3/30 post), Davenport was the keynote speaker. He was an excellent speaker and connected easily with the audience. As a matter of fact, he was talking about how the industry was trying to apply a CMMI-like model to the BPO market that I found intellectually interesting. I stopped him in the hall afterwards to ask him about it. I think I remember telling him the subject matter was actually insufferably boring to me, but I thought putting some structure to BPO that way was interesting, and I might like to write about it. Thankfully, he laughed at that and told me he thought it was boring too, but he gave me his card, and told me he would mail me something from the HBR he published that would explain it all.

Now Davenport has been around for a long time. I was impressed that IDC had him as a keynote speaker. He has McKinsey, CSC Index, Ernst & Young, Microsoft, board seats on Accenture– in his background, and his resume includes writing or co-authoring 10 best-selling business books about knowledge and information management. And this comes straight from zoominfo:

In the January 2006 issue of the Harvard Business Review, he wrote “Competing on analytics means competing on technology.” In the article, he highlighted companies that use analytical intelligence to drive successful decision-making and competitive differentiation, citing as examples eight companies that are Teradata Warehouse and solution users.

All that being said, with all due respect (and I so mean that sincerely), I want to say to Mr. Davenport and the others of his ilk: please don’t rush to judgment and dismiss Enterprise 2.0. First of all, it’s not just about blogs and wikis. There is a whole host of technology enabled by Web 2.0 (and it’s growing every day).

And, you might want to be aware of some of the more interesting knowledge-based Enterprise 2.0 products that are moving into your sector like Atlassian, Coghead, Intalio, Abgeniel, Illumio and even a little startup I’m helping right now, Experteria (in beta). And these are only the products I know about.

Yes, Enterprise 2.0 is a hot topic. But there is a difference between a hot topic and a fad. I’ve been harping on the youth culture that is driving the development behind these technologies and the attitudinal shifts that are taking place on both spectrums of the knowledge-worker universe. The fed-up, smart, hamstrung departmental users and a digitally comfortable, DIYYnot?-ready youth culture moving in.

In the 90s, it was Jim Champy who christened the Business Process Re-engineering movement. Fad. But it forced enterprises to think in terms of business process and led to BPO- today’s hot topic. Sustainable.

Last word on Hot Topics. My suburban mom friend and I would always nervously usher our kids fast past the Hot Topic store in the mall. It’s no Gap, trust me. I guess we were afraid they’d be seduced into the punk lifestyle if they were exposed to it. When the store first showed up in our local mall, I assured her, “Oh, that will be gone in a few months.” Wrong. The store has been here for years. And you know what? We all shop there now, even the kids (and no, they haven’t transformed). Great tee shirts and band paraphernalia. The lesson here is we all judge what we’re uncomfortable with, but cultural trends have a way of surviving and adapting around our unwillingness to recognize them at first.

Trust, Communications, Relationship-management…

Frank Casale invited me to co-moderate a workshop yesterday at his Outsourcing Institute NYC Roadshow on "Outsourcing's Bad Rap: Playing Politics." Throughout the day, although the outsourcing market has changed so much over the past ten years, I heard the recurring themes of trust, communications, and old-fashioned relationship management. Buyers and sellers all have their war stories.

The day was excellent. A comfortable and informative series of workshops and presentations. OI holds a series of these workshops. If you're interested in outsourcing, definitely worth attending.

HRO World

There's this old yarn about how a bratty kid goes to school one day and comes home to find his family has moved. That's how I felt when I roamed about at HRO World. Although it was an outsourcing conference, it could have been "Automotive World" or "Widget Expo." I understood the underlying business model was essentially the same, but the vendors, the leadership, and the customers were so different from what I've been accustomed to in the IT outsourcing space, I felt like a tourist. I did run into some of the old-timers including Bill Bierce, Mark Hodges, and Joe Vales who were warm and welcoming. Joe Vales was especially helpful and generous with filling me in on what was going on and how I might be involved in the HRO space.

The best fun I had was at a party held at the 21 club by vendor Convergys. I met three analysts there with whom I could commiserate and laugh. One, in particular, has an exceptional blog that I had stumbled upon. If you want to know about HRO, don't come here. Visit Jason Corsello's blog. Jason has a real blog. He promised to teach me how to blog like a pro, so that was definitely worth the trip into Manhattan.

Housekeeping- Blogging for the Masses

To my regular readers– I'm experimenting with legitimizing the blog. I've been doing some research on blogging and I think I'm going to give it a go… I took down the private registration, so it is now open to the public. My intention is to start covering the sector fairly aggressively, but I'm still on a learning curve. Once I've got just-in-time news, I'll start an alert service that I'll let you know about ahead of time, just like the old days. For now, I'm writing in several venues: GITS which I still love, and a new column in a new magazine launched by my old friend and first publisher, Mike Perkowski. The magazine is called TechIQ. The online version launched today. So. There you have it. I'm mainstream once again. I hope to see some of you in NY at HRO World. I will be at the 21 club party hosted by Convergys and I just slid in under the wire at the Superstar HROA gala banquet. I'm wondering if my invite included serving the guests rather than being a guest…

Making the Rounds

I’ve been doing my tour of duty over the past month or so. I’ve had phone conversations, meetings, and various negotations with old friends and even some new contacts. For instance, I had an enjoyable meeting yesterday with Harry Feinberg, Andy Tang, and Mike Masters from the outsourcingtoday.com group. Feinberg is the publisher of a series of new titles in the BPO space (new to me anyway who has been AWOL for 5 years). He’s focused now on the F&A BPO market, but has made a nice niche for himself in the HRO market. It turns out Masters worked for years with Joe Levy who started CIO Magazine. We had a lot of stories to share about the people we knew in common, having had a lot of crossover experience with publishing friends and agency business. Sometimes people don’t remember (or don’t even know) I used to be a hotshot Madison Avenue rising star at O&M and LGF&E (a division of JWT). The publishers do, though. My accounts were IBM and AT&T.

I also caught up with Frank Casale who originally formed The Outsourcing Institute with Mike Corbitt (who now runs IAOP. Frank and I have tried to work together for years. I’ve always believed he’s a marketing genius. To even have had the foresight to reserve the outsourcing.com URL in the early 90s was way ahead of his time. Frank was also early to market with BPO. He was publishing on BPO and embracing BPO before any of the cognoscenti was giving any credence to its expanding market possibilities. Frank has some interesting things in the hopper for his business. Stay tuned.

Finally, I had a chat with John Halvey yesterday. Halvey, as you should know. was one of the founding members of the so-called cognoscenti. He’s at Milbank, a highly prestigious Wall Street law firm. He had left for a period, as I did, to pursue opportunities opening up on the Internet Economy frontier by going to work for his friends at Safeguard, but he came back and resumed his practice. He said he doesn’t do much in the way of promotion and speaking these days. I find a lot of my old sources and friends are in a completely different phase of their career these days (read: wildly successful).

Next week, I’ll be attending HRO World. Not sure what to expect. I’m coming at these BPO markets completely humble. I have a lot to learn. I’m like a cub reporter. I remember in college we learned about a management strategy popular in the 80s called “MBWA.” It stood for “Management by Walking Around.” The idea was that management should not be isolated to ivory towers, oak desks, and consultant’s reports– that a lot could be learned organizationally by just asking questions of your own employees. That’s the attitude I’m taking in this new era of post-ITO outsourcing. I’m just walking around, calling around, emailing around– asking questions.

Class Wars

There are a lot of rumors floating out there suggesting why the merger imploded. Interestingly, many are pointing the finger at EquaTerra– alleging that EquaTerra is unprofitable, has performance issues and debt problems on some major contracts. Now granted, I've been AWOL for a spell in this market, but I found it highly unusual that TPI, whose reputation has always been the epitome of inflexibility and well, ahem (nous parlons la vérité ici), arrogance– was looking innocent and victimized in some way. Huh? First of all. I have pretty solid information that EquaTerra is not unprofitable and there are no debt issues/repayments or credits being made to unsatisfied clients there. Whether or not there are performance problems on specific deals, who knows? Show me an advisor/vendor that doesn't have a dissatisfied client in the portfolio. That doesn't surprise me. What does surprise me is this spiraling negative spin in the market against EquaTerra. Where is it coming from? What is the motivation behind it?

As for as the intricacies behind the breakdown of the deal, our understanding (and we're pretty confident here) is that the deal finally broke down over distribution of equity on the part of the private equity class investors. For some of the terms and conditions to change the way some of the investors wanted it, TPI recognized it would create problems– they knew the combined company would ultimately fail if they moved forward under the PE investor's scenario. Remember, Monitor Clipper Partners (MCP) had the lion's share of the deal, as they are the owners of TPI (important fact). Oak Investment Partners could have equally been difficult, but certainly had a fraction of MCP's interest. Our calculated guess is it was MCP that was the final coagulant in the deal and forced the hemorrhaging.

So, in the end, as I was getting closer to what actually happened in that last week– leading up to what I believe to be an amateurish, unprofessional dis-engagement in the form of their hostile breakup release, I started feeling sorry for the principals of both firms. Even Denny. Who still hasn't returned my inquiries on this. On the one hand, it started getting very complicated to follow how these M&A transactions work with their preferred positions in the stock and their investor rights, etc. On the other hand, I started to feel like this was a private affair and I really shouldn't be meddling in their business. (Weird. I really felt that way.)

So what does it all mean? Not much. The question that remains is what will TPI (read: MCP) do now? Where will they go from here? TPI can't pull off an IPO on their own without more bench strength. EquaTerra is a young company. Their options are more varied. Their greatest challenge right now appears to be an image problem. That's fixable. The wild card is MCP. Interesting. What do you think?