For years, business process outsourcing (BPO) was basically transactional and operational, “lift and shift,” so to speak. Rarely was it transformational.
That’s changed. More and more top performers are breaking out of this antiquated BPO model and turning to cloud computing, mobility tools and other cutting-edge technology to gain greater efficiency and value, according to HfS Research.
In a report, “BPO on the Brink of a New Generation: Technology Transformation,” HfS experts detail how technology is being applied to streamline systems, improve performance monitoring and fuel innovation.
BPO innovation will be driven by a “triumvirate” of people, process and technology, according to the report, which was based on a survey of 773 stakeholders, including enterprise buyers, service providers and advisors.
The HfS report outlined several key insights:
Two-thirds of recent BPO engagements remain focused on cost reduction alone, with existing processes “lifted and shifted” from the client to low-cost offshore delivery centers.
Some buyers have already leveraged new technologies in BPO arrangements and are reaping much better results than those who lag behind.
Buyers view analytics as the technology with the most potential impact on their business. They expect BPO providers to not only deliver services, but to be sources of both descriptive and predictive insights that can improve overall business outcomes.
Buyers identified automation as a critical technology that can help them make the move to achieving value beyond cost reductions.
Buyers are struggling to understand how to embrace the potential of the cloud with their current BPO engagements. Chief among concerns is the perceived loss of control and security, which must be addressed by the BPO community.
Although buyers are placing greater importance on mobility, it must be deployed in the context of an overall enterprise mobile-enablement strategy to yield the greatest value. Piecemeal, process-by-process approaches will only increase service fragmentation.
Buyers will likely not see the full value of social media until more sophisticated technology-enabled BPO platforms are in place that embed social as an essential element of the service, rather than as a bolt-on.
Phil Fersht founded HfS Research in 2010 and has overseen the firm’s growth and development into the leading authority and knowledge community for global business and information technology services. He was the Institute of Industry Analyst Relations’ Analyst of the Year in 2011.
Phil has worked at AMR Research (Gartner Inc.), leading the firm’s BPO and IT services practices. He also served as market leader for Deloitte Consulting’s BPO advisory services.
Charles Sutherland is the executive president of research at HfS Research where he oversees the entire research agenda.
He has been in the BPO marketplace for more than 12 years, which includes roles as the chief strategy officer for SourceHOV and the managing director, growth & strategy for Accenture’s multi-billion dollar Operations group.