Q&A: Chip Wagner, Alsbridge (Part 2)
To read the first part of this interview, click here.
O: That sounded a bit like “watch this space”, in terms of other acquisitions. Is that an implication that there’s going to be a quite exciting year coming up as well?
CW: Well we hope every year is exciting, and certainly we have a very clear view of how we’d like to expand the firm and increase our reach, and our touch if you will. We’re trying to become increasingly indispensable to the CXO community. What that means is that as they sit around the table inside enterprises and they think about their business challenges and their problems, we want them to be able to say, “we remember when Alsbridge came in and they helped us take ten million dollars out of our network costs via a contingency arrangement, and they helped us sort out that difficult ITO arrangement we had, and they helped us figure out how to bring robotic process automation to our operations. Why don’t we call them and see if they can help us with this problem?”
We want to get top of mind; we want to continue to add services and capabilities and touch some geographies where perhaps their services and capabilities are underserved in the current competitive environment. So we’ll always look for some geographies that make some sense to us, and we’ll continue to look for capabilities to add to our services that makes us increasingly indispensable to the CXO community.
O: Let’s come back to that question of geographies very shortly. I just wanted to get your take on one issue: these are interesting or indeed worrying times for a lot of the advisory community with the kind of changes we’ve spoken about so far having an impact on deal size and of course pipelining etc. There has been a degree of consolidation already; I have no doubt there’s going to be more so over the next 12-24 months. Do you feel that it’s a situation now where only organisations of a certain scale and scope are going to be able to survive – because it seems like the market is pretty saturated with advisors right now, and not everyone is going to come out the other side, I’m sure…
CW: Well, there are a lot of single shingles in the advisory space, whether it’s network pricing advisory which we find all the time, or whether it’s ITO or BPO advisory. I do think scale offers a certain comfort to large enterprises: it suggests that the third-party advisor will be around, it suggests that they have the appropriate reach, the appropriate diversity and experience to support their problems, and certainly if they’re a global operation they might like to pair up with a company with the appropriate size and global reach. I think there is a place for smaller niche providers as there always has been, and yet I still support your notion that like many industries, as scale and consolidation begets value for enterprise customers then that’s what will happen, that’s a natural course of affairs.
O: So, coming back to your mention of geographies of interest, are there any geographies you see over the next year or two really coming to the fore in terms of the landscape that we’re in?
CW: Well, there are a couple of ways we think about this question. Obviously the stability of any given geography from an economic point of view is kind of a two-edged sword. On the one hand if the economy in a certain region is under tremendous stress then different business models like outsourcing and offshoring and dramatic new approaches like robotic process automation and digital transformation become imperative to businesses in those economies or they can’t survive. So that’s a compelling draw to us. On the other hand the stability of things like currency, employment and labour availability make us think carefully across the spectrum of opportunity versus the risk in going to this or that geography. We look for places where the obvious demographics from a company perspective and economics suggests there is enough purchasing of services that are in the areas of our portfolio to drive us into those new geographies. That’s data that’s not too hard to get, so we see some obvious places that make some sense and also some where it’s equally obvious that they don’t make sense.
O: And one of those places that clearly makes sense to Alsbridge is Down Under: you’re making a big move into Australia and New Zealand. Can you tell us what’s going on down there?
CW: Australia and New Zealand are a great market – sometimes a little bit forgotten, because it’s off in its own fun corner – for the services that we offer, and as we studied that we realised that it’s underserved, and perhaps some of the voices that have been traditionally active there have become somewhat tired, in the minds of those we were talking to and learning from. We felt there was an opportunity to come in with our unique value and offerings, and be a fresh voice.
O: There aren’t too many opportunities to be a “fresh voice” in a lot of markets – and many of those where there are those opportunities might not be particularly valuable. What is it about this market in particular that excites you: is it a matter of market maturity, market size?
CW: Well, it certainly hasn’t drawn the volume and depth of competition that some other markets may have drawn. Perhaps from a delivery perspective, there’s been a challenge – it’s harder to get to and you obviously need local delivery resources. There’s definitely a lot of unfulfilled demand in some areas and we feel that our unique combination of offerings will strike a chord.
O: There’s a small trend developing of service delivery to the UK from New Zealand, with some organisations believing they can find labour arbitrage gains even when paying people extra to work overnight to deal with the time zone difference. What kind of organisation are you looking to work with in the region? Do you see the market being mostly homegrown companies?
CW: We’d look to market our services to homegrown companies of course; and then there are a significant number of multinationals with operations in ANZ. We’d like to serve both those – and then we’ll continue to support our provider partners and friends anywhere they are in the world.
O: So, what’s your footprint going to be in terms of the team you’ll have in place over there – and where’s that going to be distributed? When people talk about Australia and New Zealand, the emphasis is normally very strongly on the former…
CW: Yes, that’s probably true. From a market perspective Australia is bigger. However, we’ll have a presence in Auckland; we’ll also have a presence in Sydney and Melbourne. As far as how this will work within Alsbridge, this will be a region with its own responsibility, its own P&L, and it will be supported globally of course, leveraging the global capability that we have.
O: What do you see as being the key trends that are dominating the scene in the region right now – and where on the maturity curve do you see it being, compared with the US or parts of Europe?
CW: Well, when we think about it we think of it against our service line continuum and our portfolio of offerings, and as we look across our different service lines we see Australia and New Zealand being at different points on the maturity curve depending on which service line we talk about. Certainly, when we consider the disruption posed by technology such as robotic process automation, we see ANZ being at the early adopter stage. There are not many places in the world way down the maturity line in that regard, but we really see these countries benefiting from being introduced to RPA capabilities, and the cost reduction and the speed of implementation will be very well received value propositions in ANZ.
O: One of the questions I was going to ask was around talent, and the availability of talent specifically: New Zealand of course has a comparatively small population and talent in some areas can’t be all that easy to come across, so I was going to ask how you plan to overcome that challenge – and I guess now I should also ask, further to your point, how RPA ties into that.
CW: Well, robotic process automation is going to affect the entire world, in a dramatic way, and Australia and New Zealand are no different – though your point is well made about labour: the ability to digitise labour and bring automation to some functions may make things much easier in countries where the labour force isn’t as plentiful as in, say, India. I think there will be a strong resonance for talent being replaced by robotics in those two markets, enabling redeployment of that labour. And from our point of view we’ll continue to draw in local talent as we always do, and our service lines will supplement that with people from around the world; I’m sure you can imagine that it wouldn’t be hard for us to find people who’d like to take a few assignments down in Australia for a period of time! A lot of people have already raised their hands…
O: Yes, for many people that would be a dream assignment… Do you have any targets in mind in terms of the number of employees you’ll have over there eventually?
CW: We’ll grow as the market mandates, in line with the demand for our services and value propositions and our style of doing business. I don’t think we have any specific target in mind; we’re certainly not going to be constrained in terms of the numbers we might grow to. We don’t have any aspirations that the ANZ market will grow to the size of some of the more developed, larger markets round the world, but we’ll be perfectly happy to grow to whatever natural size evolution takes us to.
We feel like we’re doing a really nice job continuing to develop some of our more mature markets, where we’ve been for quite some time – particularly our home market. It’s always been our purpose to look for more tangential service offerings and geographies where we can bring our story, where we believe the demand is there and the business conditions are similar to those where we’ve found real success such as North America and the UK – and ANZ popped onto that list. Our growth will continue to be organic, inorganic and geographic expansion: those are the three vehicles that will allow us to continue to prosper as a firm.
This of course ties in with the restructuring that we’ve been discussing, the appointment of a Chief Revenue Officer to organisationally better accommodate the growth that we’re undertaking; the Australia and New Zealand expansion certainly fits right into that plan.
O: What about verticals of interest? When we look at geographies that haven’t necessarily been explored as thoroughly as they might be in terms of these new transformative technologies, we should also look at industry verticals which might present the same opportunities.
CW: There have been some fast movers: when we move back aeons, if you like, to the beginning of outsourcing, and then up to the emergence of cloud, there are always some particularly fast movers. The financial services sector is always quick out of the gate to embrace things: it has the numbers, the scale from an employment point of view, and the opportunities that automation has presented to that environment. It’s obvious why there’s been pressure on that vertical to innovate and be ahead of the curve and ahead of many other verticals.
There have also been some slow movers – but at this point in time it’s difficult to imagine a vertical that hasn’t explored in depth cloud, obviously outsourcing and offshoring, and now the digital transformation of applications, robotic process automation… These are all subjects that are right in front of them every day whether they like it or not. So I don’t think there are real laggard verticals in the world today.
Editor’s note: Alsbridge is a client of both Outsource (as an Inner Circle oNexus partner) and Sourcing Industry Group (SIG), Outsource’s parent company. However, this interview was not conducted as part of any commercial agreement, and the editor has retained full control of the content. For more information on this – or any other aspect of Outsource’s editorial approach – please send your queries through to the editor at firstname.lastname@example.org.