Since BPO is simply the contracting of delivery responsibility for a specific business process to a third-party service provider, if these companies are not going to do the work then it must mean it will be done in-house. Pretty straight forward. Many organisations deliver their own business process and have access to the same technology and resources from the market. However, this is exactly why the BPO genie will never go back in the bottle, as there are some significant areas where contracting out delivery responsibility beats in-house provision:
In the right context it’s clear there can be a substantial difference in the benefits delivered by a BPO provider compared to in-house. These are sufficiently compelling to ensure the industry will survive the current disruptions, that being said, there is no question that the current norm is no longer sustainable and the BPO needs to evolve to ensure survival.
Some thoughts on how to evolve include:
• Establish automation centres of excellence with reusable libraries to accelerate change, reduce implementation costs and create a place to develop best practices. The centres of excellence should use data driven approaches for targeting automation. Building automation software should be avoided in favour of commercial‘off the shelf’ products. Clients need reversibility they won’t outsource to a vendor if they are not confident that the service can be brought back in-house or moved to another vendor.
• Replace obsolete operations management methods and tools that cannot cope with the blended robot-machine environment. Modern tools will also enable the sharing of operational resources across client accounts with the confidence that service levels for each will be maintained.
• Be bold in risks that will be managed and be confident to exploit the investments and experience embedded in your BPO business. Data driven contract verification and due diligence processes can help identify and manage the risks.
• Dust off some of the deals of the late ‘90s in a return to output-based contracts or develop an outcome contracting approach. De-coupling the link between revenue and FTE will ensure the BPO provider has the ongoing incentive to drive automation and efficiency.
• Finally, do not forget what you already know. That BPO, for example, is a practitioner-based industry, so operations leaders and transformation leaders need to be front and centre of the sales and client onboarding process.
Jon has spent nearly 20 years helping clients transform their operations by outsourcing their business process to Hewlett Packard Enterprise Services.
Throughout his career he has used technology to drive better outcomes within operations across Banking, Insurance, Public Sector and Shared Services and knows that it is critical to have a modern capacity management solution in place to realise benefits from change.
Jon is now helping to make ActiveOps, the leading platform for operations control, an essential foundation for digital transformation.