We define “domain expertise” as the extent to which a provider has experience with and understanding of the client’s business, industry and technical contexts, processes, practices, and requirements.
Domain expertise is one of the top three provider capabilities identified by clients. However, it is considered to be a bare minimum. The research uncovers a hidden key to high performance: domain expertise is the catalyst for analytics—the real value generator. And without the tacit experiential knowledge feed from domain expertise, analytics correspondingly underperforms.
Forty-two percent of high-performance BPO clients considered analytics provided by the service provider as an important component of the BPO relationship compared to 28 percent of the typical BPO clients.
In the high-performance relationships we studied, the provider applied its domain expertise to deploy a rigorous analytics process that measured the right key process indicators, deployed tools and techniques to measure and report on key performance indicators and deployed algorithms, models, and sophisticated statistics to identify weaknesses and opportunities, and then redesigned processes to deliver measurable business outcomes.
As more data was collected and analyzed, domain expertise increased. The iterative domain expertise and analytics processes produced better results in the clients we interviewed (see the full article for case studies to illustrate this process).