This continues a new set of posts. Guest columns from practitioners
and bloggers I respect. The category - The Real Deal describes them
well.
Chandran Sankaran comes from a very gifted family. He is a serial entrepreneur. He started ClosedLoop, constraint based financial planning and budgeting software which he sold to Lawson. Now he has a next generation BPO play he describes below. He did stints at i2 and McKinsey. His sister wrote The Red Carpet last year. Here he describes the coming innovative side of BPO.
"I never used to be interested in ADP, the payroll
outsourcing company. I knew it was large; it did an astounding $8.5 billion in
revenue last year. But gosh, payroll. Yawn. Not exactly a cutting-edge business
concern.
I was forced to sit up and take notice, however, in one of
my earlier ventures, when I saw how effortless it was to establish payroll for
my company with an outsourced payroll provider. We simply gave the provider the
names of our employees and a few employment parameters, and the provider did
the rest.
Today, “outsourcing” is an overused word that usually means
sloughing off back-office commoditized work (such as management of data centers
and call centers) to third parties in order to reduce costs. Even payroll outsourcing has now become
commoditized work. But when ADP was first established, it pursued a process
that had not been ripened for outsourcing. It attracted business by
demonstrating real expertise and value relative to what companies could achieve
on their own.
As we witness the decline of the enterprise software
industry — where ultra-complex software that is too difficult to operate has
been oversold by too many vendors and underutilized by too many customers — it
is time to find new ADPs out there. A
new generation of solution providers who assemble the skills and the technology
needed to take specialized problems off
your hands altogether, and do the daily, unglamorous, operational work of
solving those problems better than you can.
When my last venture was acquired in 2003, I decided it was time to build such
a specialized high-value outsourcing company. Zyme Solutions (www.zymesolutions.com) outsources the
channel operations function for high tech product companies. Manufacturers need day-to-day visibility of how
much product has moved through to end markets and to whom, and how much remains
stuck in the channel. Several critical business decisions such as supply
planning, marketing planning, and revenue accounting ride on this visibility;
however, most companies are very unhappy with the effectiveness of their
internal processes and systems in this area. Zyme takes this mission-critical
function over from them.
The key to building a successful high-value outsourcing
company lies in bringing together behind our four walls: World class domain
skills, software platform expertise, and robust production processes. We have to know much more about this problem
than our clients do, have better
software automation platforms than are available to them, possess deeper
specialized operating skill and experience than they do, and demonstrate that
we can drive sustained quality improvements at a reasonable price.
However we also have to do something else. Our
service has got to be a seamless experience. Clients don’t want partial solutions that they need to make work, nor do
they care for the pleasure of cleaning up behind us. We have to take over the whole problem.
It is my belief that a whole generation of high-value
outsourcers like Zyme will be built over the coming few years. When the
commodity outsourcers, the “do-it-cheaper-offshore” firms and enterprise
software vendors eventually wake up, they will find new hungry specialist
outsourcers occupying their spot at the table."
Chandran can be emailed at csankaran@zymesolutions.com
Another software blog
Brian Sommer launches Software Safari. Brian and I go way back. He and I ran competing software intelligence groups at Andersen (now Accenture) and PwC (now IBM). Then he had to kiss my feet when I moved to Gartner. He got even when we co-founded a start-up and he kept rejecting my expenses. He continued to be mean and tried to recruit me in to Aberdeen Group where he did a stint. We have co-authored, co-presented, co-habited ...ok, too much detail. All you need to know is the guy knows software.
He called me for advice on his new blog. I told him not to be as wimpy as he is on his Services Safari blog, where he kisses vendor behinds -). Brian is best when he takes positions. And, boy do I love it when I can beat him up. Which means I will have to read his blog - as should you!
May 24, 2006 in People Commentary | Permalink | Comments (2) | TrackBack (0)