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Cloud And Big Data Drive BPO Benefits

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Cloud computing and business analytics are set to inject new life into the business process outsourcing (BPO) sector through reduced upfront costs and better use of the data.

IT-enabled BPO is big business, but IT’s role is largely as an enabler of efficiencies. The IT infrastructures that support BPO can be fine-tuned to cut costs, but the best-performing BPO deals are using IT to innovate.

Recent research from Accenture revealed that only 20% of BPO projects “are delivering sufficient business value to be classified as high performance”. The findings from the research, which was completed in conjunction with the Everest Group and the London School of Economics, also revealed the changing role of technology in BPO.

The survey questioned 263 buyers of a range of BPO services such as finance and accounting, procurement, human resources, and supply chain.

The report also validates eight best-in-class practices that are strongly correlated with high-performing engagements. These include using technology as a tool for innovation rather than just the infrastructure.

Anoop Sagoo, products industry BPO lead at Accenture, said cloud computing and data analytics are two technology areas that are currently offering businesses the opportunity to get more out of BPO.

He said software-as-a-service (SaaS) means businesses can introduce the applications used in BPO agreements without the need for large upfront payments: “Best-of-breed technology is now readily available and easy to apply.”

Sagoo added that the early parts of BPO agreements are usually loaded with costs associated with technology.

In the past, a business would have to buy licenses and install heavy-duty business applications as part of a BPO deal, but today they can sign up to cloud-based services and easily scale up and down the number of users. “It allows you to set up and run technology with a different total cost of ownership [TCO] model.”

Technology is also providing increased value from BPO relationships. The use of the latest business analytics software enables businesses to get more from the data being handled within BPO relationships. “Analytics is the big focus on technology in BPO at the moment,” said Sagoo.

Mark Lewis, head of outsourcing at law firm Berwin Leighton Paisner, said if the cloud is to offer massive BPO savings through platform-as-a-service (PaaS), BPO suppliers need to invest in cloud platforms.

“Otherwise it is the public cloud route you have to go down. If you use a private cloud, with visualization behind your firewall, you still need to buy licenses,” he said. “It would be interesting to see how many Fortune 500 companies are willing to move all or some of their processes to the public cloud.”

The Accenture research also revealed:

  • 85% of high-performing BPO engagements consider the service provider to be a strategic partner, compared with 41% of typical engagements;
  • 75% of high-performance BPO engagements involve senior leaders from both parties spending time to understand each other’s objectives and strategies, compared with 33% of typical engagements;
  • 90% of the high performers reported that the client and provider were able to productively resolve conflicts – this was true only with 44% of typical performers;
  • 77% of high-performing BPO engagements have successfully executed change management plans, compared with just 34% of typical engagements;
  • 85% of high-performing engagements proactively refine their objectives as the relationship matures, compared with just 40% of typical engagements;
  • 67% of high-performing engagements include business benefits beyond cost in the business case, compared with 26% of typical engagements;
  • 58% of high performers will consider service options with greater value, even at higher costs, compared with 31% of typical performers;
  • 56% of high performers seek competitive advantage through BPO, while only 28% of typical performers aim for that goal;
  • 64% of high-performing engagements place more focus on capturing other benefits as they achieve cost reduction, compared with 40% of typical engagements;
  • 54% have contract performance incentives in place, compared with only 24% of typical performers.

Author: Karl Flinders
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Cloud computing can help call centers cut costs

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As the business process outsourcing (BPO) industry is expected to grow strongly this year, a software company encouraged call centers to cut capital and operational costs by using cloud computing.

“There’s a new call center model in town. At the very least, you should do your due diligence to decide if it’s right for you,” inContact executive vice president Jim Tanner said in a statement issued Monday.

Call centers — expected to grow by 28 percent this year — rake in more revenues and profits by using cloud-based systems where the software is hosted, secured, and maintained by a vendor, inContact said.

“Instead of installing costly equipment like phone switches and automatic call distributors, all of the necessary technology services [may be] managed by an off-site provider and delivered over a broadband connection,” Tanner said.

“These cloud-based call centers [deployed over the Internet to cut costs] are not only far less expensive than traditional premises-based versions but also far more versatile,” Tanner added.

“You pay a fixed monthly subscription fee based on the number of seats or users, eliminating the capital outlay and ongoing overhead of installing and managing call center equipment,” Tanner explained.

With this system in place, call center agents can work from anywhere using a standard telephone and computer, he said.

According to www.techtarget.com, cloud computing is “a general term for anything that involves delivering hosted services over the Internet.”

These services include Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS).

Working away from the office

Call center agents can particularly work away from the office, Tanner pointed out.

“Agents working at home or at flexible time are more efficient, creating a so-called group of happy agents, which, in turn, gives companies higher productivity,” Tanner said.

“Home-based agents tend to be more mature, better educated, and more satisfied with their jobs, leading to increased efficiency and lower attrition rates,” he added.

The market for cloud-based call center infrastructure is booming, Tanner said, noting that it will grow by 35 percent in 2010 and 20 percent in 2011.

The market grew by 30 percent in 2009, he noted.