Shifting paradigms
Traditionally, organizations have reaped the benefits of outsourcing BPO services primarily in the form of reduction in operating expenses. This cost reduction has largely been derived from sheer labor arbitrage by leveraging a global workforce. Speed and quality of transactions have also been improved through use of best practices. The goal of outsourcing, however, has largely been focused on current needs of the organization and short-term financial gains.
Increasingly, organizations are looking at comprehensive process improvement, which is a tool to establish competitive differentiation and leadership. BPO service providers in turn are moving to a platform-based approach, which gives them the flexibility to contribute in process evolution.
BPOs will have one of the four possible winning approaches for the next five years. These could be platform-based service providers, process automation and process reengineering companies and vertical contractors.
Nasscom -McKinsey |
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Limitations of Traditional ‘Surround’ Approach
In this approach, BPO companies use a third-party software system or the client’s existing system as a foundation to deliver BPO services. They build service delivery ‘wrappers’ around an existing client-resident platform. Though the initial cost reduction results achieved are compelling, scope for process improvement is limited, as the BPO service provider has no control over the software platform. Business Processes and BPO services are not fully aligned in this scenario.
Also, organizations do not fully evaluate suitability of existing business process platforms for BPO delivery. This restricts enhancement and integration in the long run. Interest of Independent Software Vendors (ISVs) and System Integrators (SIS) are in conflict, limiting success and scope of improvement while increasing cost.
In the case of small or mid-size organizations, existing infrastructure cannot manage significant increases in transaction volumes. This leads to difficulty in scaling up to acquire new customers.
The use of a patchwork of third-party and legacy applications and systems leads to disparate, non-integrated systems.
Platform-based BPO is designed to operate standard platforms for generic business processes and their underlying applications.
- NASSCOM |
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Beyond Cost Arbitrage: Dividends of Platform-Based Approach
In the Platform-Based approach, BPO companies provide services on a software platform developed and maintained by them. Application support is built into the overall BPO offering. Since the BPO service providers have a clear and continuing interest in improving the platform that is owned by them, the client organization gains access to best practices embedded in the platform.
In the process, client organizations also avoid ongoing investment on the application platform. System enhancements can be realized and implemented quickly. Other benefits include reduced turnaround time and increased accuracy. Through extensive reporting and business intelligence metrics and tools, operational discipline and efficiencies can be achieved.
For mid sized and small organizations that are on the fast track for growth, this approach gives them the much needed system scalability.
The platform-based approach, using an SOA formula, delivers a fully integrated solution and thus addresses the issue of ‘silos’ of systems.
Platform based approach thus ensures that the outsourcing relationship will deliver immediate and ongoing value and competitive advantage.
Opportunities in platform based BPO
• Mortgage processing
• Claims processing (Insurance and healthcare)
• Receivables management
• Benefits administration
• Procurement
- Forrester |
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Beyond Cost Arbitrage: Dividends of Platform-Based Approach
While the traditional ‘surround’ approach will prevail in the large enterprise, horizontal BPO segments for sometime, Platform-Based BPO solutions would thrive in mid-range enterprises and vertical specific domains. Some industry verticals that are already using platform-based approach are Financial services, Insurance, Manufacturing and Healthcare.
For a platform-based approach, the BPO service provider must have sufficient expertise in the relevant industry to understand and anticipate market trends. A combination of business process knowledge, domain expertise and leverage of IT is the success formula. Indecomm’s belief is that platform based BPO services are the way to go. From inception, we have leveraged technology to automate workflow resulting in better quality and increased flexibility.
If you wish to receive more information on how Indecomm can partner with your organization, please contact us at marketing@indecommglobal.com |
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