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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 developing an end-to-end approach.
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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. Adopting an end-to-end approach is one of the most important of those practices.
To best understand the concept of the end-to-end approach, we must first consider the business services organization within the client firm. Effective client leaders in charge of back-office business services (such as financial and accounting services, human resource services, indirect procurement and supply chain support) operate their functions as a business-within-a-business. Such client leaders build world-class services organizations characterized by service excellence, low costs, scalability, flexibility, compliance and high customer satisfaction.
The journey to achieve world-class status, however, requires expensive, politically charged and painful transformation levers such as:
Thereafter, world-class organizations continuously adapt and improve by managing end-to-end performance, solving problems with root cause analysis and rapidly deploying service solutions.
In the relationships we studied, the BPO service provider joined the client’s journey toward world-class performance at different points. In some, the client leaders performed the transformation themselves, and then engaged a provider to help operate, expand and improve the transformed services organization. In others, however, client leaders engaged a provider to deploy some or nearly all of the transformation levers in a model commonly called “lift and shift.”
These different approaches demonstrate that there are many routes to achieving world-class business services.
The client’s initial creation of centralized business services and the selection of a BPO partner to help further transform and deliver world-class business services is a common pattern of high performers. The client and provider work together to focus on areas like process excellence, standardization across business units and geographies, technology enablement and relocation to low-cost locations. The client includes the provider and business end-users in “the whole picture” of the end-to-end business process, even when the provider is only directly accountable for discrete sub-processes. A key consequence of treating business services as a business-within-a-business is that the client’s internal users are transformed into educated customers. Whereas users consume resources with little thought to costs, educated customers make informed choices about service levels, functionality and costs they incur. The identification and negotiation of service levels and reporting on end-to-end service performance are important practices to aid the transformation from users to customers.
Once complete, the shift from users to customers considerably empowers the client executives to more meaningfully contribute to business objectives. Rather than responding to a user’s request with, “I am sorry, it is not in my budget,” the client executive works with the customer to consider the business value versus costs of customer requests.
Read more about the educated client customer in the companion paper, Transformation of the retained organization.
October 28, 2012
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