No more denial for WNS as it makes its concerted procurement play

This is era of the emerging BPO provider, as IT services stagnate and clients demand greater personalization and attention from business services firms that have the scale, resources, hunger and technology enablement skills to take on increasing complexity and make sense out of the dataswamps plaguing so many of today’s businesses.

One such stalwart of BPO, quietly going about its business over the years with steady growth and increasing reputation for solid delivery, is WNS (yes, the one that was spawned out of the British Airways captive back in the day).  WNS has performed well over the years, growing business streams in knowledge process domains, finance and accounting, insurance, travel, mid-size banks, contact center and some other areas.  It has oft-threatened to make a grander procurement BPO play, but mostly opted to partner with the likes of Denali when the need arised.

In my view, having solid procurement delivery capabilities goes hand in hand with F&A, so it’s refreshing to see WNS snap up one of the best pureplay strategic sourcing providers left in the market, which should make the merged entity a Winner’s Circle contender later this year when we rerun the Procurement-as-a-Service blueprint:

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So let’s hear from our Procurement and Supply Chain analyst, Derk Erbé, who’s recently emerged from a major analysis of the procurement services market:

WNS + Denali – The Details

To start the New Year with a bang, WNS announced the $40 million acquisition of Denali Sourcing Services. We have covered both WNS and Denali in our December 2016 Procurement As-a-Service Blueprint. WNS is ranked as an Execution Powerhouse, while Denali is a High Performer in the Procurement As-a-Service market.

The acquisition of Denali Sourcing Services is a good move from WNS, and effectively bolsters both organizations’ capabilities. Building on a partnership that has developed over the last couple of years, in which WNS and Denali together offered end-to-end procurement solutions, these two organizations know each other well and have extensively explored their complementarities. Integrating and move forward as one is a logical next step.

Denali is an agile and dynamic strategic sourcing and category management pure play provider of procurement managed services, known for strong relationships with clients and quality of their personalized account management and service delivery. WNS’ strengths lie in procure to pay (P2P), transactional and tactical procurement services, often part of a multi-tower BPO engagement stemming from its F&A process heritage.

Delivering large end-to-end Procurement-as-a-Service was a partnership effort for WNS end Denali, with Denali providing the upstream Source-to-Contract (S2C) scope and WNS providing the large scale downstream Procure-to-Pay (P2P) scope or as part of multi-tower engagements.

What immediately fits well

WNS procurement clients have commented positively on the level of access and commitment shown by WNS senior management. The expertise and empowerment of their project management teams and their hands-on management style fits well with Denali’s personal account management style.

Denali was one of the pioneers of on-demand, managed services in the procurement market. It has build out on-demand As-a-Service offerings and commercial models over the last several years. Its plug and play “Category strategy on demand” platform is a fitting example. WNS is known for being flexible in delivery and commercial models, going the extra mile to meet client needs, earning a reputation of being easy to work with.

Exploring key complementarities

Besides the common ground Denali and WNS share, there are a number of challenges either organization had in the Procurement As-a-Service market which are addressed by this acquisition.

WNS lacked in innovation in Procurement As-a-Service. Clients express a desire for innovative ideas and proposals from WNS. Briefings HfS had with WNS show us their willingness and ambitions to become a more innovative partner for clients. Denali has been an innovator in the space for years and adds a valuable piece to WNS in terms of innovation.

WNS needed to move up the strategic value chain. In order to position itself as a more strategic partner to clients, we encouraged WNS to focus on immersing at more strategic levels in the client organization. A more pronounced vision and thought leadership for change in procurement is a vehicle to engage more senior leadership at client organizations and the addition of Denali’s strategic procurement acumen and thought leadership fills this gap.

Vision for the future of procurement. In our Blueprint, we challenged WNS to develop and articulate their vision for Procurement As-a-Service; “WNS procurement deals are generally just a component of multi-process BPO engagements. HfS would like to see a greater vision from WNS as to how they will transition in the future to offering more modular procurement solutions which is where we believe the PO market is heading over the next several years”.
Denali has a strong vision and strategy for Procurement As-a-Service, for instance around Category Enablement, offering on-demand academy, templates and coaching to category strategies and category plans, adding capability that sustains the client organization. This vision resonates with more mature procurement organizations and younger hi-tech organizations looking for different ways to organize procurement.

North America: Denali gives WNS a much needed foothold in North America, where most of Denali’s revenue comes from (~95%). Denali needed to expand its geographic footprint further to continue to compete with the larger global delivery capabilities of competitors.

Implementation and program management. One of the challenges we noted from client in the Procurement As-a-Service Blueprint is the need for Denali to give additional attention  for the planning of implementations and the project- and program management capability

End-to-end services. Although Denali served about a fifth of its clients with end-to-end procurement services, the focus and strength has always been upstream, strategic procurement. WNS’s strength in downstream, transactional procurement needed to be complemented by upstream capabilities to compete for more valuable and interesting deals in a market looking for help in strategic sourcing, category management, analytics while automating big chunks of transactional procurement processes. The successful partnership between both parties addressed this need to a certain extent, but with buyers consolidating in procurement, having ‘one throat to choke’ can be a plus in the current market.

Remaining challenges

WNS and Denali have a great fit and several high value complementarities that will strengthen their capabilities. There are however a number of challenges that this acquisition doesn’t solve. WNS needs to keep its focus on these areas to become an even bigger challenger in the Procurement As-a-Service market.

Procurement Technology. Although Denali brings a number of proprietary technologies into WNS, in particular spend analytics solution PureSpend, it still lacks the core procurement technology platform many of the As-a-Service Winner’s Circle providers have. Expanding partnerships with procurement technology platform providers like Ariba, Coupa, Tradeshift is part of solution to this challenge.

Invest in methodical process improvement. Clients love Denali’s flexibility and willingness to engage in a consultative manner, but would be willing to trade some of that for a more process improvement oriented and best practice sharing culture in delivery. WNS can also do more to provide proactive and methodical process improvement into engagements according to clients we interviewed for the Procurement As-a-Service Blueprint.

Knowledge sharing and client communities. Clients love to be more involved in client communities, learning from experiences and developments in other client organizations. We mentioned this can contribute to Denali’s role of innovation partner, even more in the new constellation.

What this means to the market

This acquisition is not going to shift the market dramatically nor is it putting leading providers on notice. The direction of the market is clear and the move to smaller, shorter, on-demand, modular, As-a-Service delivery and commercial models focused on value adding strategic procurement will continue. The talent shortage in upstream procurement is growing and WNS has managed to secure one of the sources of sought after strategic sourcing and category talent in Denali. The WNS/Denali combination is a stronger competitor for end-to-end procurement, providing the market with a stronger alternative for clients looking for a flexible, collaborative approach.

Bottom Line: Finally some long awaited action in the evolving Procurement As-a-Service market

Analysts and market experts expected a lot of M&A activity following Accenture’s acquisition of Procurian in 2014. Denali was one of the pure play procurement specialists on the M&A radar. In the years following the Procurian acquisition, not a lot of movement materialized. This acquisition by WNS not only expands on an already successful partnership, a fact that can help the post-acquisition integration efforts and increase time to value for this acquisition, it also makes a lot of sense from the market direction and capabilities that are needed for Procurement As-a-Service.

It brings together two organizations that showed a willingness to invest in flexibility, meeting the varying needs of clients with delivery models, pricing options and commercial constructs.

One of the keys to success is the positioning of the new WNS/Denali procurement practice in the market.

(Cross-posted @ Horses for Sources)

Looking forward

Traditionally in this piece I try to peer into my cloudy crystal ball and forecast the year ahead in CRM. Sometimes I’m close, other times not but my predictions are quickly forgotten either way. This year, I’ve decided to just say what I want rather than what might realistically happen and since my vote has all of the authority of yesterday’s news, it will follow the prognostications of years past.

I’m angling for a unified theory of CRM, it’s what my books have aimed for and I think it’s about time for us to discuss it in concrete terms so that everyone gets it. You might think we already have a unified theory but I see a lot of discussion of pieces and parts. In fact I think CRM is more unified and powerful than most of its users give credit for. Consequently I think we’re leaving money on the table.

Nevertheless we should first note that CRM is doing quite well, it’s a big market and there’s still a lot of white space out there. More importantly, there’s so much innovation happening that the upsell and cross-sell potential in the installed base is both large and only growing.

But the way we’re approaching CRM is by its components. A component like AI, conversational CRM, or whatever is new gets fifteen minutes in the spotlight and buyers have to figure out whether it’s appropriate for them before the next shiny object comes into view. This has always worked well enough but the suite is so big now that perhaps some sales people are challenged to offer consistent pitches and comprehensive solutions.

The vendors are doing more or less what they should do and this fits well with the old maxim of caveat emptor or let the buyer beware. In other words, don’t look for the vendor to tell you why you should buy something beyond the obvious. Want to do email marketing? Then get an email marketing system. But do you need email marketing? At some point the larger community of guys like me should be doing more than stack ranking the email marketing systems (or whatever the topic is) based on some set of criteria they dreamed up.

The job of an analyst ought to partially include understanding business practice and matching that with product capabilities that go beyond the obvious. Many of my brothers and sisters do a great job at this but the approach is far from universal. Like every major professional space business should go beyond the confines of things that are directly related to it. For instance, law borrows heavily from sociology, psychology, economics and other social sciences. Similarly, medicine draws from a wide array of adjacent areas from social sciences to the lab sciences and not just the pathology lab either.

But in business too often we look at technology as the stuff that accelerates business practice but not necessarily what provides better or truer outcomes. Perhaps this comes from the twin imperatives that say a business does things to either make or save money.

Other professions are morally, ethically, and in some cases legally bound to focus on the customer. That doesn’t exist in business and all the things you can cram under the heading of stakeholders occupy a lower level in the hierarchy.

As important as making and saving money is, without attention being paid to customer welfare, no business can long survive and that’s why I’m advocating for what I’ll call a unified theory for now. Some leading figures are writing in the business journals about business agility which incorporates customer focus and profits under one heading. But it’s a long way from this theory and real practice.

A unified theory of CRM would take the pressure off of a business trying to figure out how to relate to its customers. I think it might even help them clarify what they do and which tools might improve customer outreach. Today, instead of a unified theory of CRM new product introductions often come with the thinly veiled promise to help speed up a process, usually sales of service. There’s nothing wrong with that if you can do it but my experience suggests that acceleration might not be possible in some areas or it might simply be undesirable.

With all of the new ways we have of communicating asynchronously acceleration seems nearly impossible. But interestingly, recent advances in things like conversational CRM have begun to advance synchronous communication for the first time since the wide-spread use of the telephone.

So I am optimistic about the year ahead though my reasons for optimism are somewhat diffuse. Nonetheless, with so many bases covered now by the modern CRM suite, the idea of a unified theory of how best to use it makes all the sense in the world to me. I’ll spend much of this year explaining this, I am sure.




Which Service Providers will help our healthcare organizations survive, even thrive, post-ACA?

Have we ever lived in such unpredictable political times?  An unpredictable president-elect, with unpredictable policies in areas where it’s hard to predict what will work… or what won’t, whatever we predict. But one prediction is certain… HfS has a healthcare analyst who’ll keep pounding away at the issues and challenges, where this industry needs to plug capability gaps to be effective… so over to Barbra McGann to give her assessment of the current services market landscape of providers jostling to be in pole position to pivot to support healthcare clients, however things start to unravel…

Much as I’d like to, I can’t foresee the actual future of the U.S. Affordable Care Act (ACA) or healthcare policies under President-elect Donald Trump… anymore than anyone could predict the true outcome of the recent U.S. presidential election. What I do foresee, however, is the increased need for partnerships to focus on what the ACA is designed to accomplish (regardless of its existence) – affordable, accessible, quality health care.

Getting to the heart of the problem –the cost.

There are many people who are upset at having to pay for “other people’s” healthcare costs – which they believe is because of the ACA. And there are many people who are receiving care who didn’t before and wouldn’t otherwise, because of pre-existing conditions or age, for example. And these are often people who when they did get sick, would go straight to an emergency room – an expensive treatment which by the way somehow had its cost passed in some way at some time to, likely, people who today do “not want to pay for other people’s healthcare.” Any way you look at it, costs get spread around.

So let’s look at this issue – cost – from a different angle… how about the angle of reducing or eliminating some of these costs?  Reducing the cost of ER visits or readmissions because we can identify and intervene in someone’s pattern of such use or events before they happen because of triggers? Or, increasing the possibilities of people being healthy because of proactive education around nutrition, exercise, and lifestyle?

Partnerships are critical to truly changing the nature and outcome of health care

Just as it “takes a village to raise a child,” it takes a community of partners to create a high quality, lower cost environment for healthy consumers. Those partners include people on the front lines of care everyday—the obvious, like doctors, nurses, pharmacists, social workers – and also professionals who work behind the scenes but have an impact on care and cost – such as billing coordinators, claims processors, and coders. If everyone is thinking about their work, and how changes to the way they work, can impact the healthcare consumer, we have a giant brain trust and energy force working for change.

A significant part of this “back office” for many years in healthcare operations has been the service provider. Business process outsourcing service providers (BPO/BPS) have been engaged mostly in stages – for claims processing, enrollment, billing, utilization review, collections—but few have been involved, truly integrated into the health care operations so that they have insight and impact on the healthcare consumer experience.

It’s time to change the nature of engagement in healthcare business operations, using design thinking, digital technology, and relationships

Now that we are more than 30 years into experience in BPO/BPS, and many healthcare providers and payers have such partnerships, it’s time to step back and look at how to partner more effectively and use digital technology such as robotic process automation, mobility, and analytics tools, along with human centered, creative problem solving like design thinking, to define and address problems with services and solutions that fit – that broker across organizational silos and internal and external partners.

A number of service providers are stepping in to help change the game in this way, and partner to make healthcare business operations more effective, with an eye toward impacting health, medical, and financial outcomes. We hear from service buyers that they are partnering increasingly for resources—to allow local clinicians more time and energy for interactions with healthcare consumers by rethinking what activity can be done remotely, through partners, or even automated.

What are service providers doing to help healthcare providers and payers?

In our recent Population Health and Care Management Blueprint, we take a look at the role of service providers in bringing together talent and technology to broker solutions through BPO and BPaaS engagements. The scope is:

  • Population Data Management and Analytics: identifying whom to target with what intervention
  • Consumer Engagement and Interaction: reaching out, engaging healthcare consumers
  • Utilization Management: processing authorizations, reviews, appeals and grievances
  • Care Coordination: coordinating care activity
  • Performance Management and Operational Analytics: program evaluation and assessment, quality and compliance reporting

Here’s a quick look at the service providers that participated actively in this research – each one brings value to a business process services engagement, depending on how you want to partner and what you want to accomplish.


We go into more detail on trends and service provider analysis in the blueprint report, which you will find described here, and you can go so far as to download here.

The bottom line is that regardless of the good, bad, and ugly of the ACA, what it did was drive forward a change towards value-based and consumer-oriented care that was and is needed, not just in the U.S. but globally.

And this kind of value-based health and care system is one that requires effective operations, and effective partnerships—and that’s what gets my vote.

(Cross-posted @ Horses for Sources)