Last year, we took on the task of ranking the top providers of enterprise FAO. This year, we’re building an even better mousetrap.
 
by Peggy Cope
 
Last year, when we began thinking about our annual listing of the FAO Enterprise Provider Baker’s Dozen, we experimented with a new approach. Rather than simply list the top 13 providers in enterprise FAO— an approach we had taken a little heat for in previous years because some questioned the accuracy of our choices—we decided to rank the crème de la crème according to how their own customers (buyers of FAO services) rated them, using several metrics. The results were so good we decided to do the same thing this year, with even better results. This year we had more responses to our Baker’s Dozen questionnaire than we have ever had before.
To achieve high levels of accuracy in determining the rankings, we generated a survey that comprised 25 qualitative or quantitative questions. We established criteria and weighting for different questions in advance, but we did not disclose the question rankings to the FAO providers who were asking their customers to participate in the survey. We did this so no provider could coach a respondent to the key questions that drove the overall rating—not that we thought anyone would!
We surveyed our buyer database and asked for responses. We also submitted the surveys to the FAO providers and asked them to distribute the surveys to their customers. We made it clear to customer respondents that their responses were confidential. Almost all of the responses we used came from our solicitation. We assembled a database of responses and only counted those that included contact information so we could authenticate the response.
The survey items examined the components of FAO service to arrive at an index we show as “Breadth of Service.” A comprehensive service offering that can replace internal functionality is the ultimate goal of the outsourcing industry, so we thought that this was important to measure. It is also harder to provide service across broader offerings, and we took this into account. Questions sought “Yes” or “No” answers regarding each of the service components.
The answers were then assigned points, averaged, and calculated to generate the index. The larger and more complex the program is, the more axiomatically difficult it becomes to get great Quality of Service scores, and this was factored into weightings of the overall index related to Breadth of Services.
Another index was generated on the overall Size of Program. We debated the use of this index and ultimately discarded it as not significant to the outcome for last year’s rankings; however, it is a good indicator for us as it closely mirrors the breadth of service and revalidates that data set. Therefore, we have included those findings this year. The final component of the index was Quality of Service. This was based on a series of questions that examined the performance and the relationship between provider and customer.
We used a five-point Likert scale with answers ranging from “Strongly Agree” to “Strongly Disagree.” Each answer was ascribed a point value, and the points were totaled and averaged, whereupon the mean was calculated into the “Quality of Service” index. We then weighted each element for the overall ranking. We believe it is fair and unbiased and shows the sentiments of the buyer respondents. It is also a very defensible algorithm for indexing service providers.
A few other points are noteworthy. We recognize that FAO is global and many of the providers are global companies; however, our readership is principally North American, so we did not rate providers that operate primarily outside of the U.S. Many of the providers surveyed, however, are providing their customer global delivery platforms.
A word on terminology and the definition of “Enterprise”: The term “Enterprise FAO” has been historically somewhat ill-defined. For example, there are excellent providers such as Outsource Partners International and part of Accenture that target middle market companies but have broad offerings. Is “Enterprise” based upon the number of processes? Or does it include companies such as Sourcenet Solutions, which specializes in a few processes but has very, very large engagements in those processes?
Simply put, because our methodology may create a certain ranking does not mean the top ranked firms automatically meet your needs. You need to consider your needs and your market environment before deciding whom to include in your RFP process.
The Findings
There are many highlights in the data, some rather different from what we learned last year. For example, while Accenture this year leads the overall index, Capgemini customers reported that it has a capacity for very broad programs. IBM appears to have the happiest customers this year, based on survey respondents’ answers. Note that this does not necessarily mean that the services these companies offer have changed or that their buyers are more —or less—happy with that service; it reflects the thinking of the buyers who responded to the questionnaire this year.
In terms of the top Enterprise FAO Providers you usually hear that IBM, ACS, Accenture, Capgemini and HP (now even stronger with its acquisition of EDS last year) are the industry leaders. However, it is clear that companies such as Genpact, Infosys BPO, and WNS are making credible challenges for market supremacy.
You may have noticed that although we have a “Baker’s Dozen” of top enterprise providers in our alphabetical listing that follows this summary of methodology and findings, there are only eight companies ranked. This is because not all of the companies we contacted generated sufficient responses from their clients to enable us to rank them accurately. Without a representative base of client responses, we could not rank them against their peers.