Wipro Point of View – Companies have long benefited from the scalability and cost savings they receive from business process outsourcing that offloads non-core tasks to a qualified service provider with proven capabilities. Until now, most enterprises outsourced work horizontally by specific function. A call center was a call center. Data entry was data entry. The BPO value proposition centered around labor arbitrage, centralization, quality and economies of scale.
Today that is so 2002. Progressive service providers are now investing time, training and resources into what Wipro believes is the next big industry trend: Vertical BPO.
Although most companies outsourced for cost savings, they have now recognized the value of quality delivery and scalability that their partners bring.
We believe there is a huge opportunity to help these same clients with more complex, industry-specific work that goes beyond the traditional front- or back-office engagement. This is why we are proactively positioning for the next layer of business process outsourcing — one that requires deep domain expertise and industry-specific technology. This approach makes sense for today’s global economy and the new needs of business.
Vertical BPO is an ideal way to help companies roll out new products and service functions enterprises previously branded as core. The opportunities are endless if the service provider is willing to make the investment in specialization.
Here are some examples of Vertical BPO in three different verticals demonstrating the new need.
Ask any banker what’s keeping him or her up at night and you’ll get the same answer: regulations.
In the U.S., the Dodd-Frank Act alone is an 800-page piece of legislation that amends nearly every financial statute in the United States, requiring financial institutions to collect more data, create more reports, eliminate certain types of fee income and, in many ways, change the way they’ve done business for decades.
The number of banks in both the U.S. and Europe has been decreasing each year. Although consolidation and the economy have contributed to this, the data shows the number one driver for this reduction is legislation. A number of banks fold up or get purchased any time the government implements new legislation. Vertical BPO can play a significant role in helping financial institutions deal with these new compliance needs.
Banks that have survived the last few years are already operating lean. If they are using legacy core systems, regulatory compliance has the potential to bring them to the breaking point. European banks are facing similar challenges.
With industry-specific, integrated tools and systems in place, Wipro can seamlessly extract the needed data and create the appropriate compliance reports at a fraction of the bank’s cost.
Another example: Investment banks are also under tremendous cost pressures due to the increasing concerns on asset quality, higher cost of capital and the increasingly stringent regulatory requirements. Wipro is in the process of developing an industry utility in the trade settlement and clearing area that operates on a state-of-the-art multi-tenant platform. The goal: to reduce the total cost of operations while improving accuracy and turnaround times.
In addition to the two examples above, Wipro has developed vertical BPO offerings for mortgage origination and servicing, insurance and annuities policy administration, and credit card analytics, among others.
Healthcare and Life Sciences
In the U.S., the baby boomers are aging. Soon they will place a massive burden on the current Medicare system.
Agencies will face an influx of up to 48 million enrollees. Medicare has to verify every one of them for eligibility, then process and enroll the qualified in a timely manner. These agencies are strapped for cash and do not have the manpower to keep up with the approaching tsunami. Many of those government agencies are working with non-compliant, legacy systems that slow the process further.
The answer: engaging a vertical BPO provider like Wipro. Then these agencies gain scalability so they can accurately verify the enrollee influx. In addition, they have the opportunity to benefit from new technology without making a capital investment, a proven benefit of outsourcing. We invest in the people, process and technology so our clients don’t have to.
Wipro uses Member 360, an advanced Medicare platform to replace the agencies’ inefficient legacy systems. We deliver a more seamless, compliant and specialized solution by providing both the technology platform and the processing expertise.
Another instance: Outsourcing also provides medical device manufacturers a new source of income by providing a value-added service: remote patient monitoring. Statistics show that 60 percent of Americans have a chronic condition like diabetes or heart disease. Doctors report that proactively monitoring these patients by ensuring they stay up with tests and helping them making lifestyle choices that reduce the impact of these conditions drives down emergency room visits and ultimately reduces the cost of healthcare. A strong outsourcing partner, with nurses on staff, can monitor these patients and load this information directly into the healthcare information system. Medical devices manufacturers are offering this as a value-added service to hospitals and healthcare organizations.
The utilities market is transitioning to “smart” technology. Utility companies are replacing traditional meters with smart meters that feed usage data to a centralized system every few minutes. Today the companies don’t have to wait for data from the meter readers once a month.
Smart technology supplies huge volumes of data that utility companies never had before. Utility companies can better understand demand, customer behavior and peak consumption periods so they can allocate resources more effectively by applying available analytics. These analytics allow utilities to design programs to incent customers to change their consumption patterns; this helps them to design more efficient individual prices and optimize demand-supply alignment.
A vertically aligned outsourcing provider can be a great asset in customer satisfaction. The provider’s industry-trained staff can provide assistance from the deployment to the sustenance phase. For example, the provider’s staff can educate customers on how their smart meters work or explain their pricing model choices.
Another key opportunity in this vertical is asset lifestyle management. Service providers can offer solutions in asset data management, geographic information systems, etc. These offerings optimize planned and preventive maintenance that reduce operating and capital expenses as well as health and safety incidents.
The Future of BPO
As companies worldwide face increasing economic, competitive and regulatory challenges, vertical BPO is the future of outsourcing.
Entering a specialized market requires a commitment of time, training and investment. It also mandates specialized IT systems and platforms, certified personnel and subject matter experts with deep expertise in the specific industries served. Embedding mobility and analytics further embellishes the value proposition. This is not a strategy you can bootstrap.
Wipro has invested heavily in vertical BPO offerings. The providers that go to market first with a credible value proposition will emerge as the winners in this space. We are positioning to be a winner by making our customers winners.