The role of technology in BPO
As IT and BPO converge to shape the future of outsourcing, businesses must make the best use of technology tools to run their multichannel service organisations. The surge in technology enablement has significantly improved business processes, when outsourced. It helps solve business problems and enables efficient outsourcing. It also delivers real benefits to customers, including:
• Cost benefits and efficiencies
• Customers are clearer on expectations from BPO, making outsourcing benefits less elusive
• Global footprint expansion to provide cost flexibility and meet regional language needs
• Data-driven, smart analytics-based decision making, replacing traditional dashboards
Customers now demand business transformation and are confident of receiving it from their service providers.
Technology routes
With customers becoming savvier, service providers need to meet their specific needs – not just to prevent customer churn, but also to help maintain their bottom line. Customers are keen to know what the next big thing is and service providers need to stay on their toes to continually deliver new offerings to accelerate value delivery in a more sustained manner. The stress is on new innovations that create more standardised process models to improve efficiencies, reduce costs, and leverage best practices.
Technology has proved to be the lynchpin, with the ability to create that ‘wow’ factor to addresses needs of both the customer and provider through benefits such as:
• Economies of scale and improved accuracy through automation
• Labour arbitrage
• Ability to connect and monitor remote location workflows
• Integrate buyers and service providers processes and technology systems
• Improved communication and collaboration
• Reduction in human error through automation
While it’s clear that technology is fundamental to the process, customer success from outsourcing is dependent on opting for technology that complements their existing set-up. The most popular technology strategies are tie-and-run, core functional technology replacement, platform services, best-of-breed solutions and technology augmentation
Let’s take a closer look at each of the choices:
1. In tie-and-run, technology has a limited role where the service provider plugs into the buyer’s existing systems to deliver services.
2. With core functional technology replacement method, the IT infrastructure and core functional application (F&A, HR, etc.) implementation is bundled with domain services (FAO, HRO, etc.) and technology ownership resides with buyer.
3. In the case of platform services, the customer has to adopt pre-integrated applications and pre-built processes that are owned by the service provider and where pricing is built into the domain contract. With this strategy, customers may feel a loss-of-control, while security measures bring a ‘doubt factor’ with F&A processes in particular. For example, imagine two banks sharing the same platform for similar processes – the risk is high and the price of failure can be massive.
4. Best-of-breed solutions have deep functionality, multiple features and address specific customer pain points. The options are many, but each solution is incomplete on its own as it fails to meet the breadth of customer requirements in a BPO set-up. This depth provided by best-of-breed solutions is not completely exploited as BPO requirements generally stay at the surface level and customers do not gain effective ROI on these higher cost solutions. In addition, integrating multiple point solutions has another set of challenges.
5. In technology augmentation, the service provider implements tools that serve as ‘add-ons’ around the periphery of the existing systems to address specific gaps. Here, the customer has the ability to capitalise on their existing technology investments, while also improving their planning, reporting, and decision making processes. Implementing a technology-augmentation strategy is one of the leanest and quickest methods to reaping the benefits of outsourcing.
The customer wish-list
• Maximise return on technology investment: With an economy that demands a much tighter control on spend, it is natural for customers to want to minimise capital expenditures. There is undoubtedly a growing desire to add to the technology infrastructure, but only after completely sweating the current technology assets.
• Minimal change management: The transformation is welcome, but only with minimal upheaval and when the overall implementation ‘experience’ is quick, efficient, smooth, and without any radical impact to employees’ every day responsibilities.
• Outcome-based business model: Business models are undergoing changes and haven’t yet reached a definitive point. However, the shift is certainly moving away from the traditional pricing models that were FTE and transaction-based. Customers now wish to outsource business processes for measurable and significant business outcomes instead.
• One-stop-shop model: Customers are increasingly looking for combined benefits from technology and BPO investment, with a single point of governance. They take process efficiency for granted in almost every BPO deal today – governance and effectiveness matter most, and the BPO provider landscape is changing dramatically in order to meet these evolving needs.
• Increased governance and control: Customers are not ready to move all of their business processes in their entirety to be managed by the service provider, despite being assured of big benefits during the initial stage of the relationship. They are more in tune with the benefits of having absolute control over their outsourced processes at every step, irrespective of the new destination of the processes.
• Intuitive business analytics: Customers are demanding speed and scale, as executives have a daunting task of ensuring overall organisational success, rather than merely focusing on their own business divisions. The number of performance indicators impacting the success or failure of business objectives is complex and calls for real intelligence to aid in decision making. Traditional reporting tools and dashboards for problem solving are passé and not sufficient for today’s business demands.
Technology-augmentation scores
Technology plays a major role in paving the future for BPO but the road is not totally clear. These challenges can lie in the technology features that customers are coming to demand as ‘must haves’ for a complete BPO offering, including:
• Keep customisation to a minimum
• Cater to a factory model of process execution, while accommodating operations’ floor-level variations
• Automate completely but have manual intervention for deviations
• Transition and ramp-up operations when rapidly evolving to a high-productivity model
• Aid management in decision making with deep drill down on operational details
• Move to outcome-based pricing
• Have a single point of contact for all BPO-related technology requirements
One thing that is certain is that business drives technology and not the other way around. Companies implement technology to enable outsourcing and solve business problems. Technology solutions that increase process effectiveness provide governance and control, and increase efficiency are welcome, but only if it does not junk their existing technology systems and applications, ERP systems, and supporting infrastructure. These are heavy investments with complex dependencies that customers can’t easily ‘rip and replace’.
The ideal investment is in a breadth of technology that seamlessly integrates with the customer’s core systems, provides business outcomes, combines operational best practices, is standardised but configurable and customisable for specific nuances, protects investments and runs operations end-to-end – all implemented and hosted by one provider.
Wipro BPO customers clearly connect with the technology-augmentation strategy. They see it as one of the leanest methods of empowering their existing ERP systems and overall technology infrastructure by using the required add-ons with minimal resources to deliver maximum benefits.
Wipro BPO’s proprietary offering Base)))™ is a technology-enabled process-layer tailored for organisations that are not looking at disruptive changes to their existing technology landscape, but are keen to find solutions for specific business problems by leveraging existing technology with absolute visibility into their outsourced processes The technology-augmentation route provides business impact by unlocking hidden values, provides strategic impact by going beyond mere sustenance of operations, productises best practices, all of this with minimal CAPEX. It helps move a step beyond to fully meet the strategic needs of customers today.