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Research & Insight

Research & Insight

business process as a service

Forces of Change Shaping Outsourcing Solutions

Outsourcing Center, Kathleen Goolsby, Senior Writer

Like a pre-storm sky, a look at the investments outsourcing solutions providers are currently undertaking presents evidence of tremendous change over the next five years. They’re mapping out a new course, and buyers of outsourcing services need to understand where providers are headed so they can make informed decisions. Outsourcing Center asked 12 leading ITO and BPO service providers about the forces driving their investments for solutions over the next five years. Market volatility, market differentiation, lack of investment capital, collaboration, globalization, and rethinking how work gets done are among the top business needs for which buyers are asking outsourcing providers for help. Speed is the theme that emerged in the interviewed providers’ descriptions of their investments in solutions addressing these forces. Here’s a rundown. Cloud technologies Wipro Technologies is establishing strong system integration capabilities in private clouds and in integration of public and private clouds. Rajan Kohli, CMO, says, “Our investments are geared at creating platform cloud solutions that successfully deliver business value to clients.” According to DonSchulman, General Manager for IBM’s global F&A and SCM business, IBM continues investing in its BPO Business Process as a Service (BPaaS) offerings. He says, “Our cloud-based BPO solutions are specifically designed to enable quick deployment of this technology in order to drive rapid benefits. This includes immediate cost-efficiencies, increased scalability, and easier access to technology innovation as well as sustainable performance improvements for client organizations.” Infosys BPO is investing in services for the cloud as well as services on the cloud “to help clients achieve faster process efficiency and effectiveness,” says Ritesh Idnani, COO. Joanne Olsen, Senior Vice President, Oracle Cloud Services, points out that “The economy may be officially out of a recession; but organizations have learned that, in the ‘new normal,’ extreme volatility and uncertainty will persist.” Making large capital investments without a fast return on investment is no longer an option; yet, given the uncertainty, organizations need to accelerate the pace of innovation and become more agile and responsive. “Flexibility and speed are the key attributes for any outsourcing solution for the foreseeable future,” predicts Olsen. Oracle has invested in cloud services to enable clients to achieve financial flexibility and business agility to adjust to changing market conditions and demands quickly and efficiently. With cloud services, they pay for what they use and move their capital expense to an operating expense. Allied Digital Services is also investing in the cloud delivery model to help companies move from the own-and-operate (cap-ex) model to a services-based (op-ex) model. Kevin Schatzle, President, refers to this as an “IT evolution” enabled by advances in virtualization technologies and the development of remote management tools. As part of the evolution, Allied Digital invested in an integrated delivery framework with customized best-in-breed infrastructure management tools integrated on a common platform that enables visibility to all critical components of an organization’s IT infrastructure. Partha Sakar, CEO at Hinduja Global Solutions, says “Cloud concepts certainly will disrupt the playing field, but success in many of the disciplines will continue and always require well-trained, compassionate, culturally compatible and, as appropriate, proximate resources.” Therefore, HGS is also investing in building more remote data centers in proximity to current and future growth markets. Industry-specific solutions / platforms / collaboration “Companies are looking for new ways to harmonize business processes on an end-to-end basis across their enterprises, so we’re responding to that and investing accordingly,” says IBM’s Schulman. “Our strategy has been to focus on a tighter linkage between F&A and SCM businesses to facilitate more cohesive end-to-end capabilities. Schulman says companies are increasingly recognizing the need to address both the outsourced and retained portions of their finance and procurement back-office processes in a more integrated, holistic fashion. This requires technology that enables visibility across all processes including non-outsourced scope. He says clients are also looking closely at creating vertical integration of their business to find new ways to interact with their vendors and customers in a consistent manner. “In fact, we now have the technology available to establish a shared platform that goes beyond individual processes,” says Schulman. “We are able to drive standardization across companies and even industries by connecting data from many disparate sources. Access to this kind of information enables companies to proactively identify and respond to emerging trends, both large and small, for enhanced business agility. At the same time, this technology will help clients innovate their processes in ways that differentiate their enterprise.” Gordon Coburn, Chief Financial & Operating Officer at Cognizant, says “Tectonic shifts in the economy, society, and technology are driving organizations to create an environment where work becomes a more fluid and intimate collaboration between employees, customers, suppliers, and other stakeholders, delivering continuous business value.” New virtualized platforms are enabling real-time collaboration within organizations and with external partners, leading to new ways of working, managing, and innovating. To achieve new ways of working, Cognizant is investing in frameworks and methodologies that help companies assess their ability to create more collaborative and virtual ways of working. Deepak Patel, CEO of Aditya Birla Minacs, also predicts “virtualization” of enterprise business models will accelerate business opportunities for the BPO industry. Aditya Birla Minacs is investing in robust process capabilities aligned to vertical domains. He says market forces are now providing outsourcing service providers with “a unique opportunity to dive deeper into the core processes of their clients and move up and across the value chain.” TCS is investing in building a strong pool of industry domain experts. It is also investing in acquisitions (such as Citigroup Global Services Ltd and Supervalu’s India captive) to gain vertical expertise. In addition, TCS continues to invest in building beyond its current seven vertical platform BPO services. These services deliver a process as a service, leveraging the cloud. “Over the next few years, we will invest in strengthening our platforms and increasing service coverage,” states V. K. Raman, Head, Domain Services, TCS BPO Services. Infosys BPO is investing in vertical domain competencies not only by lateral hiring but …

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