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HP BPO: Reenergized in Europe, Increasingly Bullish

NelsonHall recently attended an HP Enterprise Services (HP ES) analyst and adviser event in London focused on its European BPO business - on what was the first working day of its FY 2015.

The tone was very upbeat:

  • FY 2014 was a good year, with HP ES winning 11 out of the 12 BPO deals for which it bid, for an overall TCV of $1bn+
  • And management described its pipeline for FY 15 as “very strong”.

HP has been winning business recently against competition from the likes of Accenture, Capgemini, Genpact and IBM… plus some sole source deals.

So what is HP ES in Europe doing so well that is boosting its BPO business, a business that a few years back was almost in hiding from a former CEO, but  which this year has had Meg Whitman making public comments of appreciation as being a part of the HP ES that is both growing and also profitable.

During the event, a number of things were featured by HP.

One of these, the integratation of its GBS organization with the BPO (which HP ES now refers to as “BPS”) business,  means that HP ES can refer to its own experience when looking to support a client that is moving to a GBS environment. This positioning has helped it win at least one major F&A deal this last year.

And a refresh of the sales force over the last few years has certainly helped the re-energizing HP is now enjoying.

HP ES is targeting deals which afford it opportunities to leverage its capabilities in security, automation and analytics, within a managed services wrapper.

The key offerings in Europe continue to be:

  • F&A, where HP EA has re-launched the value proposition underpinning its services with six business-value oriented themes focused on CFO priorities (e.g,. cash acceleration)
  • CEM, in which it has been investing recently.
  • And in the U.S. HP ES has a large healthcare (largely Medicaid) business.
  • With HR, HP is seeing its experience in implementing Worday internally is standing it in good stay for Workday-based HR BPO opportunities; a  recent win at IHG (see our article here http://research.nelson-hall.com/search/?avpage-views=article&searchid=40685&id=203973&fv=2) is one example.

Investments highlighted by HP included those in:

  • Internally developed IP such as BPAT (Business Process Analytics Tool), currently configured to support F&A BPO engagements. It has six “views” including one that highlights risk and compliance issues, and a seventh that gives an executive overview.
  • Robotic automation, with the BPS organization now starting to using Blue Prism and GBS using Leo for assisting agents. HP has adopted a CoE approach to foster reuse
  • Analytics:  we are seeing evidence of HP ES having moved on from talking the talk to walking the walk with Autonomy within its BPO engagements. And of course, HP ES’ ability to leverage HP Labs is an advantage. Offerings being developed include “in context” and predictive analytics, which enhance the capabilities of agents and operators in taking "next best" actions during customer support interactions.

HP ES also highlighted various examples of commercial innovation, including a contingent financing model, where it puts its initial transition and transformation fees at risk, with the client only paying these fees after the benefits have started to accrue. NelsonHall research shows that transition risk in BPO remains a major hygiene factor for vendors in winning contract awards; HP’s offer to delay T&T fees until after benefits have started to accrue, should be effective in persuading potential clients of their capability and confidence to deliver an effective and speedy transition.

We also got a flavor of what we should expect to see from HP BPO in the next year or so.

  • In its F&A business, for example,  HP is looking to go to market with more specialist services, e.g. financial planning and reporting services, also offering maturity assessments. Significantly, HP is also looking to GTM with a transactional procurement BPO service that will complement its F&A portfolio
  • In its CEM business, the positioning will be more clearly articulated on the multi-channel customer experience (CX), with HP leading with advisory and transformation consultative selling. A recently announced alliance with Avaya (in which HP is providing ITO services to Avaya) will enhance its contact center infrastructure capabilities.. this is a space to watch
  • Another key area will be expanded offerings around digital, for example to support digital banking and digital marketing, with managed services sitting on top of a stack of HP assets.

HP ES is one of very few BPO vendors that possess deep experience in its selected BPO areas and global delivery capabilities, combined with extensive IT services capabilities that include cloud and analytics solutions. It is positioning on being able to offer “transformational” BPO services that have a business outcomes focus, powered by technological innovation and supported by innovative commercial models.

In its new reenergized form, HP ES BPO in Europe is now increasingly one to watch.

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