Technology Benefits in BPO: Are They Real? | Article

Wipro Point of View: T is for Technology, Totality, and Tads

Technology has been a cog in the BPO wheel for a while. Today technology is seated at the core of all major BPO deals.

  • Cost benefits are now a given
  • Expectations from outsourcing services are more qualitative in nature
  • Despite the shaken-up economy, BPO spending is on the rise and analysts predict it to cross $300 billion in 2012
  • Expanding the global footprint seems to be the order of the day for cost flexibility and regional language needs
  • Data-driven, smart analytics to power decision making has replaced the traditional dashboards and ad hoc query and reporting tools that only tell us what happened or why it happened
  • Customers are clearer on their expectations from BPO contracts, making outsourcing benefits less elusive

Most of these transformations have become possible only due to the leverage that technology provides. Technology is transforming the way buyers and service providers discuss BPO deals.

The expanding customer wish list

Customer expectations from transformation are getting clearer; they expect a journey from efficiency to effectiveness. Conversations are not stuck around cost arbitrage, even though it remains the primary driver of any outsourcing deal, but have graduated to negotiations on business outcomes. The increased ownership of end-to-end processes shown by customers partially explains this clarity in expectations.

Here are some of the customers’ must-haves:

  • Maximized returns from technology investments: With an economy that exercises a much tighter control on spend, it is natural for customers to want to minimize capital expenditures. There is a wish to add to the technology infrastructure but only after completely sweating out the existing systems.
  • Minimal change management: The transition is welcome but with minimum hitches, and the overall experience has to be smooth, quick, and without any radical impact to people on the job.
  • Outcome-based business models: Business models are undergoing changes and haven’t yet reached a definite point. However, the shift is certainly away from the traditional pricing models that were FTE and transaction based. Customers wish to outsource business processes for measurable and significant business outcomes.
  • One-stop shop: Customers look for combined benefits from technology and BP, with single a point of governance. Customers take process efficiency for granted in almost every BPO deal today. Governance and effectiveness is what customers appreciate, and the BPO provider landscape is rearranging to meet this evolving need.
  • Increased governance and control: Customers are not ready to give away their business processes and sit back, despite being assured of big benefits during the signing phase. They have awakened to the positives that lie in having absolute control of their outsourced processes at every step, irrespective of the new destination of the processes.
  • Intuitive business analytics: Customers are demanding speed and scale, as executives have a daunting task of ensuring overall organizational success rather than merely focusing on their own business divisions. The number of performance indicators impacting the success or failure of business objectives is complex and calls for real intelligence to aid decision making. Traditional reporting tools and dashboards for problem solving are passé.

While the wish list seems to be getting clearer, how to make it happen and how much technology can make it happen is a bit of a maze.

What’s next? With customers moving up the curve in their BPO understanding and service providers having to meet all these needs to be in business and wow their customers, the one thing that keeps both parties on the edge today is “what’s new?” Buyers are keen to know the next best thing the provider is going to pull out of its hat to accelerate value delivery in a more sustained manner while the providers are excited to come up with innovations to create more standardized process models to improve efficiencies, reduce costs, and leverage best practices.

Technology is welcome but conditions apply

Technology has proven to be the element with the ability of spinning something new to meet the needs of both buyers and providers. The changes that technology has been able to bring include:

  • The realization of economies of scale through automation
  • Labor arbitrage
  • The ability to connect and monitor remote location workflows
  • Integration between buyers and service providers across process and technology levels
  • Improved communication
  • Reduction in errors

But the skies are not totally clear. Technology certainly plays a major role in defining the way forward for BPO; however the “ifs” and “buts” are many.

Buyers expect technology-enabled BPO to provide business outcomes along with a lot of convenience. Here are some of the technology features that are a must-have in a complete BPO offering:

  • Keep customization to a minimum: Buyers expect solution implementations on the go; speed is critical. Not many want to start from the ground up; and most prefer standardized, interchangeable business process building blocks such as workflow, case management, e-mail management, SLA, reporting, and analytics to complete a solution. It works best when process-specific components such as procure-to-pay, order-to-cash, and record-to-report sit on top of a process-agnostic layer. It gives great flexibility in implementing features either as-is or customized.Reinventing the wheel is not smart anymore; buyers can leverage to the max productized best practices with cross-process standardized features. The one-size-fits-all approach does not work for organizations with a massive scale of operations. Most customers are comfortable with running business processes their way. Accounting nuances, approval flows, input tracking and control are some instances where organizations prefer to follow their own protocols. The right amount of customization is possible when technology plays that fine role of balancing automation and human intervention.
  • Cater to a factory model of process execution but accommodate operations’ floor-level variations: Technology should marry process flows with floor practices. It should imbibe the efficiencies of a BPM system,; but then, the operations floor ground reality is there has to be a lot of flexibility to accommodate variations. Like, can the agent choose the job she wants to work on or should the system or team lead assign the work? When a job fails quality control, should the job come back directly to the agent who raised it or go back to a common pool for reallocation? Technology should gracefully handle both scenarios.
  • Automate completely but then have manual Intervention for deviations: Customers want operations to handle 95 percent of the decisions with system rules but also expect five percent to have manual intervention. This balance strengthens the cause of productivity while giving flexibility on the operations floor.

    For example, team lead-assigned priorities should supersede system-driven job priorities. Quality control sampling rules should be bolstered by manually chosen jobs for quality checking, and manual triggering quality control should be possible. Similarly, technology should also help operations handle both process and non-process activities but allow leeway for the agent to modify certain job attributes without needing to acquire it – like adding comments and uploading support documents. It should also support non-process scheduled recurring tasks that the team lead can create and assign to teams or named agents.

  • Transition and ramp up operations but then rapidly evolve to a high-productivity model: Customers want BPO operations to adapt with maturity; technology should accommodate this process learning curve. It should enable easy change of the role of the system, taking into account the ramp-up of agents that change and the maturity of a process that evolves with time. For example, the same queue can have completely closed allocation right after transition and move to a completely open allocation when there is a comfort factor (or vice-versa). Once the users become experts, it should allow mass processing of jobs.
  • Aid management in decision making, but should provide a deep drill-down on operational details: In times of a business crisis, traditional management reporting falls short in recommending optimum solutions. It provides a view of what went wrong and where but not why the crisis took place. Technology can support structured analytics services to accelerate decision making using driver-based models that map performance drivers to tactical goals. A guided analysis approach enables business leaders to easily identify performance issues and their root causes and then recommend specific actions to fix them – completely in a self-service mode.
  • Move to outcome-based pricing as the way forward: Technology brings the ability to track KPIs and analyze areas that lack in performance. It facilitates reporting of transactions, process standardization, and effective monitoring of process outcomes. All of these lead to establishing pricing models that are outcome based and beneficial for both buyers and service providers.
  • Have one throat to choke: Customers want one vendor for the entire solution instead of having to chase a fleet of vendors. With technology as a key component of the package, buyers expect the vendor to become a one-stop shop presenting an a la carte menu for all BPO-related technology requirements.

Business drives technology, not the other way round. Companies implement technology for resolving business problems and enabling outsourcing. Technology solutions that increase process effectiveness, provide governance and control, and increase efficiency are welcome, but under the condition that the new plan will not junk their existing technology systems and applications, ERP systems, and supporting infrastructure. These are heavy investments with complex dependencies the companies can’t put away easily. Their ideal investment is in a breadth of technology that integrates with client core systems, provides business outcomes, combines operational best practices, is standardized but customizable, protects investments, and runs operations end-to-end – all implemented and hosted by one vendor.

Despite “ifs” and “buts,” technology is shaping up to be a critical area that organizations evaluate when assessing BPO opportunities. Today companies see it more as a business process lever than merely a cost item. Keeping the customers’ wish list in mind, the technology-augmentation route is proving to be the leanest method of empowering customers’ existing ERP and other technology infrastructure with the required add-ons and with minimum resources to realize benefits. These solutions are tailored for organizations that are not looking at disruptive changes to their existing technology landscape but are keen to find solutions for specific business problems by leveraging the existing technology with absolute visibility into their outsourced processes. This route provides business impact by unlocking hidden values, provides strategic impact by going beyond mere sustenance of operations, and productizes best practices. And it all comes with no major capital expense (capex).

Wipro is a step ahead

In 2007, Wipro BPO went a step ahead to ensure business impact to customers by modeling, refining, and transforming business processes, all with the power of technology. Wipro is passionate about protecting customers’ technology investments while delivering a holistic technology solution to deliver business value. Wipro augments customers’ core systems with its end-to-end integrated process management layer – Base)))™, which currently is used by 19 customers that have 2,200 users in eight countries.

Now, Wipro BPO has moved beyond business impact to meet the strategic needs of customers. The increasing need for wanting to become better and faster calls for insights into the big picture of business processes. Wipro BPO empowers its customers with consulting-led, driver-based performance management services to improve their planning, reporting, and decision support – Base)))™ Insights.

Nithya, who has been at Wipro 19 years, has published two patents in Business Process Management. Her primary responsibility as CTO is to drive process standardization and value creations for customers through Base )))TM and Base)))TM Insights.

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