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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 seeking business value beyond cost, one of the hallmarks of high performance.
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Read our related research High Performance BPO: Eight Practices That Can Drive Long-Term, Differentiated Value from a BPO Relationship.
Read other articles in this series relating to the following practices:
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 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.
A review of 1,356 BPO and ITO findings identified as robust from 254 academic research studies.
Our client interviews and survey both found that a focus on looking beyond cost savings to find broader, more strategic business value is an important characteristic if high-performance BPO.
Our research shows that companies focus on three imperatives in order to achieve more lasting, strategic value:
Seek benefits beyond cost. Include business benefits in the business case, permit higher costs to achieve higher service quality and capture business benefits after cost savings. These actions can generate process performance improvements, higher service quality, and 20 to 35 percent savings.
Pursue a cost-plus innovation agenda. Hire a provider for subject matter and/or transformational expertise, and use savings to fund innovation. These actions can lead to continuous system, technical and business gains.
Seek a global sourcing evolution. Stabilize, standardize, integrate, optimize and dynamically source. These actions help high-performance organizations to reconstruct their own business operations and optimize outsourcing services globally.
The key priority of high-performance organizations is to achieve benefits beyond cost. We see high performers achieving this in numerous ways. Invariably, they set off with this initial goal, but they also anticipate the outsourcing experience as a living evolution for achieving improved business performance. This evolution is supported by adopting a cost-plus innovation agenda.
High-performance businesses have global ambitions embedded in their evolutionary approach to outsourcing—not only to optimize outsourcing services on a global basis, but also to use outsourcing to reconstruct their own business operations to function globally. Our research confirms that adoption of these practices has immense positive impact on client business performance.
December 1, 2012
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