ASP Adds BPO Offerings for Vertical Markets | Article

Man on a stairRoad warriors, those employees who spend their lives dashing in and out of airports for the good of their companies, often rate compiling their expense reports as one of their most dreaded tasks. Typically they stuff their receipts in their briefcases. Then, when the credit card bill payment looms, they fill out the paperwork, staple the receipts to an expense voucher and submit the stack of paperwork for reimbursement. Their employers then had to key in all the appropriate numbers before authorizing accounting to cut them a check. Hopefully none of the slips of paper got lost as they changed hands.

Today, these salespeople simply send their receipts to Portera, an Applications Service Provider (ASP) that also performs Business Process Outsourcing (BPO.) Portera, located in Campbell, California, digitizes the paperwork and completes an on-line expense form for the employees. Salespeople review the completed forms from their Web browsers even if they are on the road. If it’s correct, they submit it to their bosses for approval.

Portera has taken the non-billable, non-core functions of a service organization – like expense account reporting — and integrated them into a subscription service available over the Internet. Its enterprise applications and back-office support staff are available through a standard web browser for a monthly fee. Its client roster currently totals 130.

Portera specializes in service firms. These include advertising companies, public relations firms, architects, lawyers and consultants.

The recipe for success for a BPO is applying technology to a business process, according to Gary Steele, CEO of Portera. Then the BPO can use the resulting leverage to create cost effective efficiencies.

Technology Makes BPO Work

Portera doesn’t have to employ a sizable staff typing in all these receipts; instead, everything is scanned and imagined. “BPO outsourcing works because we have the technology for it,” he says. In this case, Portera partners with an imaging partner accustomed to handling reams of paper.

Standardizing the process is requisite if more than one customer is going to use the software. And everyone has to be on the same system with no corporate firewalls. The Internet makes that possible.

Portera’s programmers wrote the expense reporting software. Programming was a natural for Portera because the company, founded in 1996, began building Java-based development tools which allowed customers to build their own applications. When Portera executives discovered a need in the marketplace, its programmers wrote a new application. “A company can be really responsive when it’s the author of the software,” points out Steele.

Two years ago Portera’s programmers rolled out Serviceport, the software suite that includes the expense report module. Steele says Serviceport “helps with the heavy lifting.”

Line Between ASPs, BPOs Blurring

The company moved into a hybrid mode because of Serviceport’s success. Its customers were so excited about their first venture into outsourcing that they told Portera they wanted to outsource their other non-core areas, including back office, human resources and procurement. “They told us they didn’t want to deal with these hassles,” Steele reports.

Steele predicts the boundaries between ASPs and BPO providers will blur as the models mature. He believes vertical service providers will not only host applications but deliver services, too.

This trend allows these hybrid outsourcers to grow into national providers, another by-product of the continuing standardization of business processes. Steele predicts “the economics for the buyers will only get better.” He points out traditional outsourcing required the vendor to assign its employees to the buyer’s company. However, having an on site presence doesn’t generate large cost savings.

But the ASP/BPO model amalgamates the work in a central location, creating leverage through a large community of subscribers. “The economics will look different. And much better for the buyer,” he predicts.

Certifying Security

The only major worry for ASP/BPO buyers is insuring the security of their data. Steele says Portera has taken all the security precautions it knows, but its word may not be enough for clients. So the firm hired KPMG, the CPA firm, to perform a security audit according to American Institute of Certified Public Accountants (AICPA) mandated standards. “We wanted to give our customers a comfort level that we take all the necessary steps to keep their data secure,” says Steele.

The founders made up the company name from the Latin word meaning “gateway” since the Internet was the doorway to its applications. Portera can always mean porter, which is what its software programs are designed to do for their users.

Lessons from the Outsourcing Primer:

  • ASPs are providing BPO services in vertical markets due to customer request.
  • Standardization and technology are the keys to success in the BPO market.
  • The economics of BPO outsourcing are getting better for the buyer because centralization is providing cost savings.
  • Buyers must check the outsourcing provider’s security precautions. Having an AICPA designation has an outsider certify the BPO provider has taken the necessary steps.

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