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Accenture and the London School of Economics have uncovered the “keys to the kingdom”—those practices that contribute to high-performance business process outsourcing (BPO). In this paper, we examine the practice of domain expertise and analytics.
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As the BPO market matures, clients are expecting more than just cost reductions and fulfilled service level agreements. They want their back offices transformed, their business performance improved. They expect their service providers to adapt to changing business demands and deliver new sets of outcomes.
We call relationships that are achieving these exceptional results high-performance BPO.
Accenture and the London School of Economics undertook joint research to uncover the practices that distinguish high-performance BPO from its more typical counterparts. Our latest research from this partnership uncovered the “keys to the kingdom” practices that contribute to high performance. These practices emerged from analysis of four principal research streams: a comprehensive survey of 263 senior client BPO executives, in-depth interviews with client-provider executive pairs in 20 organizations, research into 26 organizations identified as high performers in collaborative innovation and a review of 1,356 BPO and ITO findings from 254 academic research studies identified as robust.
Domain expertise and analytics is one of the most important of those practices.
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).
Based on Accenture’s extensive experience and the research results, three actions should be considered to help move toward high-performance BPO:
Invite the provider inside the tent. Powerful business analytics reflect the high level of collaboration and teaming between the parties.
Build the internal team for transition and evolution. It is vital to have the internal subject matter experts (SME) on board during transition.
Leverage the provider’s proficiency in analytics. High-performance BPO clients are distinguished by their ability to identify and leverage providers’ distinctive capabilities.
October 28, 2012
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