In long-term business-process outsourcing (BPO) relationships spanning three or four generations of contracts, avoiding complacency can be a major challenge.
The solution, according to new research by the London School of Economics (LSE), lies in reinvigorating the partnership to reclaim high performance.
The outsourcing industry can therefore learn much from those rare relationships that have been reinvigorated successfully over a long period of time.
BP’s outsourcing arrangement with Accenture for finance and accounting (F&A) services stands out as an excellent example of one such arrangement. BP is a global oil and energy company with more than 100,000 employees and annual revenues in excess of $230 billion.
Until 1987, BP was partly government owned. By 1990, it was still too bureaucratic, and its cost base too high, to succeed in a rapidly-changing industry.
Over the following 15 years, however, BP transformed into a world leader in the industry—due in large part to its decision to outsource its business and IT services.
Since 1991, Accenture has been a key strategic partner at the heart of BP’s outsourcing arrangements. By the mid-2000s, however, the relationship had become routine and needed to be recharged.
Having been in a partnership for well over a decade, the challenge for BP and Accenture was to reinvigorate their arrangement to achieve high performance in the long term.
Within BP’s outsourcing portfolio, its longstanding and several-times renewed F&A arrangement with Accenture continues to be an acknowledged BPO success story.
The relationship has been built around nine distinctive practices adopted by the parties as part of the process of relearning to be great:
Bring in transformational leaders to reinvigorate a relationship.
Facilitate outsourcing through centralization, standardization and optimization.
Drive strong transformational and change management capability.
Align the retained organization with the outsourced processes.
Take a holistic approach to the scope of the BPO relationship.
Adopt a partnership-based approach to governance.
Don’t settle for “green” service-level performance.
Prioritize and incent innovation.
Integrate, empower and reward the provider’s staff.
Since initially establishing a single shared-services center for F&A and SAP support in Aberdeen (UK) in 1991, Accenture has consistently helped BP achieve high performance over the past 20-plus years.
35 percent reduction in BP’s financial operating costs
50 percent reduction in F&A costs, despite a doubling of work volumes
Expansion to five delivery centers around the world.
Continuous improvements in cost base and service effectiveness
World-class close performance
BP is widely and justifiably acknowledged as a pioneer in global outsourcing. Accenture remains a key strategic partner in the company’s commitment to high performance in F&A because of both parties’ robust commitment to reinvigorating their relationship on a regular basis.