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Issue Date: September 2007

BPO is here to stay, but companies want it to be measurable

13 September 2007

Business process outsourcing (BPO) continues to gather steam, with companies now starting to look for benefits beyond cost cutting - such as improved processes and better customer service.
This is according to Glen Mollink COO of technology enabled outsourcer, Innovation Group, the recently empowered subsidiary of London-listed The Innovation Group.
Mollink said BPO customers are getting more demanding. "It is not just about saving on costs when it comes to outsourcing non-core processes.
Customers want to balance cost savings with improved business processes and customer service. Customers are looking for ways to achieve a greater level of business consistency when it comes to the delivery of services to customers and suppliers, adhering to compliance regulations, good corporate governance, as well as increasing time to market. This includes increasing service delivery to clients. BPO can play a big role in assisting companies to achieve these goals - and companies are increasingly recognising that if they partner with a process innovator, rather than a body shop, they are able to realise significantly more benefits.
"However, while companies are recognising the importance of BPO they are expecting their service providers to become partners in innovation.
The relationship has to be collaborative. Service providers need to work with companies to put together strategic frameworks, assisting to 'arm'
the business for future growth - as well as identifying changing business demands and working together on ways to meet these changing business demands."
Mollink said BPO service providers also need to place a bigger focus on measuring impacts and results - and need to be able to function within a 'multivendor outsourced environment'. This is because BPO contracts are becoming a lot more sophisticated and include a network of partners with which the service provider has to ensure smooth communications.
When it comes to companies selecting an outsourcing business partner, exposure to risk and the availably of a high skills level remain high on the priority list - as well as language proficiency. "Companies, these days, need to operate at a far faster pace - often on a 24 x 7 basis. If certain business processes are outsourced, companies are now not only looking at operational costs savings, but also at what level of risk they are undertaking by outsourcing. Companies are no longer primarily looking to move service desks or manufacturing capabilities offshore.
The BPO net is expanding and there is a growing need for highly skilled and educated people in specialised fields such as finance and administration, procurement and product fulfilment.
Service providers offering these skills sets need to ensure that they can offer the right processes and capabilities to assist in cutting costs and, at the same time, need to be able to prove that they are providing additional business benefits on a measurable basis,"
In addition, as the world becomes more global - and as the acceptance of this increases - service providers need to assure that they can offer true consistency via a solid global delivery model. "Companies are truly starting to understand the global business concept - that work can be conducted from anywhere, at anytime. However, for BPO specialists to play in this marketplace they need to ensure that their global delivery model is flawless as clients will be looking for high levels of standardisation and consistency in these global outsourcing services.
Mollink said the bottom-line is that companies are looking at 'broader business benefits'.
"This is how BPO sells." he said, "Beyond pure cost savings, companies want to be able to feel the business benefits of outsourcing. This means that effective measurement criteria become more critical. Protagonists of outsourcing need to be able to prove - including proving to company boards - that outsourcing is not only saving money but is assisting the company to grow by providing additional skills, technology and services that otherwise would not have been accessible."

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