PayStream has recently heard of an interesting set of observations on business process outsourcing
(BPO), and as we conduct a lot of our own research on the subject, we found this interesting material worth sharing to our readers. A small study was presented in a series of blogs from NelsonHall, a leading outsourcing research and analysis firm, and it looks at six disruptive forces that are causing renovation in BPO. The author of the blogs and the expert on the topic is John Willmott, CEO at NelsonHall.
The first blog sets the scene for readers: according to Willmot, BPO has always been about service improvement just as much as cost reduction, but among today’s organizations, client needs have been evolving. While these needs vary across different industries, generally the first things clients want are cost control and process improvement. Standardization and business agility are often the key elements in accomplishing these things, and from there, BPO providers will implement different business functions and services as they drive towards the big picture– top line growth, margin increase, and a healthy cash flow.
Now what disrupts the simple task of BPO bringing consistency and cost effectiveness? Wilmott says, watch out for robotics process automation (RPA). Not that RPA hampers BPO providers from meeting their clients’ needs, but it necessarily changes the way these providers must accomplish their goals. Robotics’ advanced and consistent capabilities pose challenges to vendors in several ways, primarily in how they affect speed and cost standards. These factors raise competition and change clients’ expectations of what BPO can bring.
Another important disruptive factor is analytics. While it has always been important in BPO offerings, it is rising to become a top priority for businesses. Tools like fraud analytics are in high demand, and BPO providers that do not offer a robust set of analytics features and functionalities will fall behind their competitors.
Other causes for BPO disruption include labor arbitrage (which can offer lower price points, reduced
attrition, and business continuity), digital capability (especially for front-end processes like customer management services), and the Internet of Things for increased connectivity. In addition, software development is playing a role in changing the BPO arena. According to Willmott, BPO vendors are starting to pre-assemble large numbers of BPO platform components as an alternative to COTS software, resulting in higher levels of flexibility, cost control, and best-practices configurations.
The result of these six disruptive forces? According to Willmott, it is the shift from traditional BPO to “High Velocity BPO”. This new look at BPO services takes into account its changing industry, and rises to meet the challenges with a more holistic and adaptive approach. According to Willmott, High Velocity BPO focuses on broader process excellence—it seeks to help the client achieve business success faster, and to help the purchaser contribute to the wider business goals of the organization driven by monitoring against end-to-end KPIs.
It seems to PayStream that what John Willmott is describing in the BPO arena is a set of best practices that we often look for in our partners. It involves evaluation and decisive execution. When our partners in the business process software industry take a look at the competitive standards of their market and adjust their offerings to best-of-breed levels, we regard them as P2P Innovators. When our partners in the professional arena benchmark their organizations against their competitors to determine how they can improve with business-process automation, we deem them P2P Innovators. When BPO providers see disruptive forces that are changing their industry and rise to meet the challenge—we call them P2P Innovators.
