Business process outsourcing (BPO) has begun to transcend process improvements to fundamentally alter customer businesses. It is my view that integrated BPO services are now possible. This would incorporate capabilities spanning application development, consulting, infrastructure management, and process management, using a holistic and global delivery model.
In 2001, people figured out that the only way to deliver greater value to the customer was to move away from viewing BPO as a separate silo. First there was Generation 0.8 BPO, or the "prove it to the customer" phase. Customers were not yet comfortable with offshoring a business process.
Then we moved to Generation 1.0 BPO. The liberalisation of the telecom sector in countries like India was not only propelling the industry but also driving socio-cultural transformation. This was the "scale it for me" phase, where providers struggled to scale services to conform to a customer's individual needs.
Providers began building industry-specific competencies and delivering greater value, knowledge-intensive processes such as medical coding for healthcare revenue-cycle customers. Voice-based accounts receivable (A/R) follow-up cycles were also initiated, reducing the number of days outstanding in A/R for customers.
Offshore processing began to build up a head of steam and many providers grew rapidly.
And so to Generation 2.0. This involves getting BPO to actually make a positive impact on customer businesses, by holistically integrating BPO with all other aspects of the customer’s business, including technology, applications and ultimately business-process transformation.
BPO has moved beyond being a fragmented service and service-level agreement (SLA)-focused offering. The service provider can manage the customer’s entire business process or function holistically.
This involves clearly defining scope, service-level expectations, baseline m etrics, a governance process, and organisational change management, among other things. This also involves merging consulting and BPO capabilities, re-engineering and connecting seemingly divergent processes and streamlining workflow.
One requires applications development capabilities as well. It has also enabled the focus to shift from transaction-oriented SLAs to contracts that hold the service provider accountable for meeting or exceeding clearly defined, standardised industry-process benchmarks.
The next generation of BPO is likely to define a more complex, integrated solution that really will help customers get a competitive edge.
Ferenc Szelenyi is EMEA vice president at Dell Services
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