Transformational Trends in BPO

Extracted 01FEB2012 from

Rahul Kanodia, CEO and vice chairman of Datamatics adds, "Today it's no longer just about cost. Buyers want you to produce value from more complex transactions. In fact, BPO providers need to scale up to the next level, which is knowledge process outsourcing (KPO) and business process management, for demonstrating value adds to their customers."

1. The move away from headcount-based contracts - Kanodia agrees. "Technology and platforms are driving the second generation of BPO," he observes. This makes taking over a process from end-to-end possible... BPO 2.0 "will require a higher level of change management because it's more intrusive."

2. Buyers want more transparency inside the BPO process - Ten years ago the appeal of labor arbitrage meant "no one cared about seeing inside the operation," continues Jeffery of AOMi. Today, however, it's central to a strategic customer-service provider relationship.

3. Productivity matters - Many Australian banks in particular "are requiring their service providers to standardize their processes for operational management control which aligns with the retained onshore teams."

4. The rise of the BPO specialist - The rise of knowledge process outsourcers is a good example... Trowbridge adds this trend toward specialization does not auger well for second-tier service providers... "You cannot be everything to everybody. Pick your industries and understand them well."

5. Offshore providers are doing more work onshore - to streamline, integrate, standardize and optimize their BPO processes, which requires work to happen at home as well as abroad.

6. Regulatory pressure will continue to increase - enterprises that outsource BPO processes will have to spend more time and money working with their BPO providers to accommodate the auditors.

7. Social media is a new biz op for BPO providers - Increasingly, BPO providers are "capturing the data real-time, conducting analysis and providing critical insights to drive business agility. Managing the customer experience and responding to customer concerns have created a plethora of opportunities" for BPO service providers

8. Business Process as a Service (BPaaS) is catching on - Buyers like having the supplier put the different components together

9. Buyers are getting savvier - That puts the service providers under pressure