Business Process Outsourcing & Factors that Influence BPO Success

IntroductionBusiness process outsourcing, or BPO, is the act of transferring responsibility for a significant part of a business process and the respective process results to a third-party service provider.It has become a mainstream strategic tool for organizations to employ to support process improvement and/or cost-cutting efforts.Beyond these critical and high-level issues lie numerous additional details organizations must factor into their decision-making processes.The scope of BPO is expanding beyond functional areas initially targeted and more often comprises multi-level efforts. 

Factors that Impact BPO SuccessThis document will make you familiar with present findings from the 2007 study update, as well as reinterpretation and analysis of original findings based on the results of ongoing market assessment.Survey respondents were organizations in North America and Western Europe. All respondent organizations have 5,000 or more employees and over US$1 billion in annual revenue. Respondents overall most frequently indicated they planned to expand BPO usage into new business units, divisions or geographies.Based on this BPO definition, 84% of total respondents described themselves and their organizations as currently engaged in BPO. The remaining were actively evaluating BPO.The 2006 study surveyed a total of 126 respondents engaged in human resource and/or finance and accounting outsourcing and the 2007 update included buyers of procurement outsourcing for a total of 154 respondents.Respondents were queried on what they viewed as the biggest factors impacting the success of BPO efforts. 

The following table illustrates the combined rankings of the success factors for HR and F&A respondents. 

**SP – Service Provider 

The quality of the BPO service provider was the leading factor cited over the life of the study and in each individual year, surpassing all other factors and being the only factor cited by a majority of respondents.The need and desire for service provider quality, however, is somewhat self-evident.It is also important to note that the adoption of standardized processes was not deemed critical to BPO success overall. This is unfortunate because standardization also could ease transition costs, pains and timeframes. Respondents give relatively high emphasis to the BPO service provider’s abilities to meet cost reduction and process improvement goals. Achieving these goals are typically two of the main reasons why buyers undertake BPO efforts. We interpret these rankings, however, not to mean that buyers today care less about saving money and improving process performance, but rather that they are more focused than in the past on how to achieve the goals. 

The Importance of Information Technology to BPO SuccessThe current and future IT systems and application environment is one critical area organizations must evaluate when assessing BPO opportunities. This is especially the case with core enterprise applications, such as those embodied commercial enterprise software and integrated Enterprise Resource Planning (ERP) systems. These systems play a key role in the business operations of any organization that has deployed them. While they represent IT systems, it is difficult to separate them from the business processes they support when it comes to outsourcing.Organizations must address many elements of their ERP and related enterprise software applications when pursuing BPO. These include:    • Measuring and benchmarking current cost levels, and accurately estimating cost levels and savings potentially gained from outsourcing.    • Understanding the capabilities of the enterprise software environment that supports ongoing outsourcing management and governance needs, as well as the costs to provide this support both in terms of operational  (expenses and any required software enhancements or upgrades.   • Determining how underlying IT systems enable and/or constrain business process performance and how outsourcing will impact performance levels.   • Defining a means to compare and contrast the current enterprise software environment to that provided by BPO service provider candidates.   • Defining the outsourcing scope from the perspective of the enterprise software environment. This involves mapping the business process elements being outsourced against the underlying software applications support. Typically, the IT components do not map cleanly to the business functions being outsourced, creating challenges in terms of extracting the relevant IT applications. 

Many organizations struggle to address these points for various reasons, including:§   BPO is focused on cost reduction and process improvement (the end goals) and often not enough on the means, of which IT is one

• BPO decision making typically is driven by efforts to reduce costs and improve process performance levels, not specifically to address IT issues. These BPO goals are impacted and enabled by the IT environment, but also are dependent upon non-IT elements like strategy, people, resources, operational locations, and process definitions and operating models. IT considerations can get lost in the shuffle if decision makers do not adequately understand IT’s role.

§   BPO typically is driven by business units

• BPO efforts are nearly always driven by business unit and executive management. The key BPO decision makers often are not IT-literate or interested enough in IT issues to adequately represent the firm’s enterprise software interests in a BPO effort. In many cases, the IT group play only a supporting role in BPO decision making and are not always in a position to fully address BPO challenges.

• BPO buyers also can suffer when the IT group is involved but takes a narrow, negative, or overly technical approach to their role.

Buyers must assess candidate BPO service providers’ IT application and system capabilities and the fit of these systems into their own IT environment, architecture and strategy. §   BPO decision makers may not understand understand the Impact of outsourcing decisions on ITo       Many BPO decision makers tend to focus on the outcome of the BPO effort and not on how the organization gets there. For example, while event driven employee self-service portals are often highly sought after by Human Resources (HR) professionals considering BPO, their focus generally is on how the portal performs and not on the underlying applications and systems enabling that performance. BPO buyers may not fully understand that the capabilities viewed in a service provider demo may or may not work in their own IT environment or the time, effort and cost that may be required to achieve those capabilities. The organization’s BPO decision makers, however, must ensure that someone is playing that role and can connect the dots between business and IT. This ideally would be representatives from the IT group, as well as third-party advisors, or potentially representatives from key strategic IT vendor partners.The underlying IT and enterprise software operating environment, its strengths and weaknesses, costs, and supporting vendors’ capabilities and future direction are all critical elements for organizations to analyze in any BPO decision-making process. This holds true for existing and future environments of the BPO service provider. The process becomes more complex due to the dynamic BPO service provider IT environment (e.g., current client burden, service offering plans, retirement of other offerings, strategic relationships).  

Current BPO Investments and Future Investment PlansRespondents cited HR and F&A as the two process areas most frequently outsourced.The other areas selected included ITO, call center, and industry specific BPO such as payment processing, as well as IT knowledge process outsourcing services like engineering. In terms of geographic differences, European respondents were more likely than North American respondents to have undertaken HRO. Respondents that had not already undertaken BPO but were actively engaged in doing so, also most commonly cited HR and F&A. 

Respondents overall were positive about their future BPO investment plans. Just two individual respondents in the overall survey indicated that their organizations planned to curtail or eliminate existing BPO efforts. Respondents overall most frequently indicated they planned to expand BPO usage into new business domains. This was followed closely by expanding into process areas currently outsourced and into new process areas. Maintaining existing BPO investment levels was the next most frequently cited direction. 

Future investment plan citations were lower across the board in 2007 than 2006 for comparable samples (i.e., HR and F&A respondent classes polled in each year). This may represent a slight cooling in the BPO market. It also is a function of the survey sample in that each respondent in general selected less options in this multiple answer question in 2007 than in 2006, leading to lower overall response levels. Given this point, it is important to view the ranking of the responses as well as the absolute levels. 

ConclusionThe future expected growth of BPO is consistently strong in North America, as well as Europe, and across the functional areas of human resources, finance and accounting, and procurement.BPO investment and expansion plans: Existing human resources, finance and accounting, andprocurement outsourcing levels remain strong as do plans for future BPO investments, though expansion plans tempered somewhat in 2007 compared to 2006.Sources of advice for IT issues and needs related to BPO: The internal IT group was the leading source of advice for line-of-business BPO decision makers on IT issues related to BPO.  Outsourcing consultants and enterprise software vendors also were frequently cited as sources of advice.Biggest factors impacting BPO success: Service provider quality remains the leading factor cited. The collective IT capabilities of BPO service providers clearly are recognized as critical to BPO success. The cultural fit between the buyer and the service provider, as well as creating a collaborative ”win-win” relationship, also are deemed important – more so in 2007 than 2006.

Is India’s outsourcing honeymoon over?

EW YORK (CNN/Money) - Surprise! India’s reign as the world’s “Outsourcing King” may be slipping, even with its rock-bottom call center costs.

A new report from market research firm Gartner, Inc. warns that a labor crunch and rising wages could erode as much as 45 percent of India’s market share by 2007.

Indian industry watchers acknowledge that the country’s outsourcing industry — its golden goose of the moment — is indeed facing a “serious” problem.

In an interview with CNN/Money from New Delhi, Kiran Karnick, president of the National Association of Software and Service companies (NASSCOM), said he’s concerned that these challenges could stymie India’s strong double-digit growth in outsourcing services.

NASSCOM is the trade body representing India’s information technology (IT) software and services industry.

More importantly, the Gartner report cautions that a host of emerging countries such as the Philippines, Malaysia, Vietnam and Eastern European nations including Hungary and Poland, are also starting to challenge India’s leadership in offshore business process outsourcing (BPO.)

Many U.S. and international companies maintain that outsourcing business processes such as customer service call centers, administrative and accounting processes to low-cost and low-wage countries like India helps to keep down their own cost of doing business.

Analysts say India’s “go to” status as a premier outsourcing destination is a function of the country’s vast pool of about 2.5 million mostly English-speaking graduates that are ready to enter the workforce annually.

But India can’t afford to rest on its laurels, said Sujay Chohan, one of the authors of the Gartner report and vice president and research director of offshore business process outsourcing with Gartner in New Delhi.

Unless India devises a long-term roadmap to improve infrastructure and consistently grow its skilled labor force, he said India will see some of its offshore BPO clients shift business elsewhere.

“Although India’s infrastructure is improving, it is not keeping pace with the rapid growth of the industry,” the report said.

The Gartner report pointed out that while no single nation yet poses a direct threat to India as a high-quality/low-cost location, over the past two years, more than 50 other countries have emerged that together could pose a viable challenge to India in the months ahead.

Gartner estimates that India’s current 85 percent ownership of the BPO market share could dwindle to about 45 percent by 2007.

In dollar terms, that would be a significant blow to India, Chohan said. In 2004 India raked in more than $2 billion of an estimated $3 billion global offshore BPO market with more than 250,000 workers.

He estimates that the worldwide offshore BPO market will grow to about $24 billion by 2007 of which India will earn about $13.8 billion.

Rising labor costs

Given that India’s been doubling its outsourcing operations every year for the past four years, Chohan said he’s not too surprised by the current imbalance in the labor demand-supply equation as well as the onset of wage inflation and high levels of attrition.

“Four years ago, a typical call center employee would have earned between 5,000 to 6,000 rupees ($114- $136) a month. Now it may be up to between 7,000 to 9,000 rupees ($159 - $204) a month,” he said. “The rise in labor costs isn’t significant yet. What’s more important is that these increases so far have not been passed on to clients in the U.S.”

But if these costs continue to escalate, he predicts that Indian outsourcing firms will take a hit to their bottom line and eventually start to pass along the increases to their international clients.

Chohan said India could learn from Ireland’s mistakes more than a decade earlier.

“This is exactly what happened in Ireland in the 1990s,” said Chohan. “As a result, companies that were outsourcing to Ireland began to look elsewhere and discovered India for the lower-level work,” adding that Ireland today still attracts what’s considered to be “high-value” outsourcing such as R&D and software development.

Chohan isn’t worried about India losing it lead in IT outsourcing. “India dominates now and will continue to do so in the future because of the sheer scale of skills in the country at low costs. The only exception is China which has become very visible in this space within the last six months.”

Moving beyond call centers

Ashank Desai, chairman of Mumbai-based Mastek, said one way for Indian companies to maintain their competitive advantage and ensure their international clientele is to upgrade their services by offering more sophisticated back office functions in addition to the basic call center services.

Mastek is a provider of offshore IT and BPO outsourcing services. The company logged annual sales of $130 million in 2004.

“At Mastek we’re already looking into merging BPO and IT services so that our clients get double the advantage,’ Desai said.

He gave an example, “We can reconfigure IT used for processing insurance claims to make it more efficient and then process these claims more efficiently for our customers.”

In order to emerge as truly global players and undercut the competition, Chohan said Indian outsourcing companies should also think about expanding their brand globally by setting up delivery centers outside of India.

Indian vendors depend too much on the U.S. market. India has to make inroads into non-English speaking markets as well, “similar to what Ireland has done to successfully service the European market,” he said.  

BPO – “the possibilities are endless”

By Les Mara, Head of Business Processing Outsourcing EMEA, HP

Today, the business case for business process outsourcing (BPO) is typically built on the twin pillars of labour rate arbitrage (transferring work offshore to low-cost locations) and economies of scale (consolidating previously dispersed activities into regional and global centres). However, leading companies are increasingly looking beyond this to BPO service providers who will deliver not only best practice processes but also the relevant tools and technology to enable seamless global business processing in a cost-effective manner.

In many cases, however, achieving seamless global delivery is hampered by the legacy of a complex systems landscape. Either through a history of mergers and acquisitions or through decentralised IT investment decisions, many organisations find themselves operating a mix of dissimilar enterprise resource planning (ERP) systems and home-grown applications. This disparate set of business systems can represent a significant challenge for an organisation seeking to maximise the benefits from consolidation and standardisation of processes. Furthermore, obtaining timely meaningful management information at a corporate level can be difficult and costly, thereby impacting decision making in a highly competitive marketplace. Companies faced with this situation must decide what to do with their systems architecture as part of the outsourcing equation.

Hitherto, the response to this issue was most commonly to consolidate the ERP landscape and/or migrate to a global instance of a single platform. However, global migrations can cost hundreds of millions of dollars and take years to fully implement. Savings that could be achieved through process standardisation and consolidation of business processing activities through BPO are often delayed until ERP consolidations are completed. Any merger, acquisition or divestiture activity that occurs during consolidation may disrupt the roll-out schedule and drastically effect costs and timing.

Recently, the advent of service oriented architecture (SOA) has enabled a different approach. It enables the BPO provider to deliver services whilst ‘loosely coupled’ to the customer’s IT landscape instead of being tightly bound to the customer’s own particular set of applications. In the context of SOA, ‘services’ are business services such as invoice and payment processing, account reconciliation or order fulfilment. This structure creates a virtual application by connecting multiple services to present users with a single process view. The newly combined services become a new application that can easily be reused and restructured to meet customers’ business needs.

Whilst the concept of ‘services’ has been around for quite some time, recent advances in standard definitions for various technologies have lead to greater proliferation and interoperability. With today’s higher-performance computing and stronger communication standards, this design concept can now be used for demanding enterprise applications. Using standard protocols, different devices and applications are now able to communicate and interoperate within an SOA. In essence, the SOA builds on the extensive standard communication protocols to build a ‘container’ that can house and connect all the business services and applications. Multiple services and applications can then ‘plug’ into the container. Once they are plugged in, the various services and applications can communicate with each other via industry standard protocols and can then work together to perform various customer-specific business processes. This means that users can access all the various business services from any application or service plugged into the SOA, regardless of where those services and applications physically reside and regardless of which languages they are programmed in.

Despite a legacy of multiple ERP systems and applications, by plugging into the BPO provider’s SOA-based solution, a BPO customer can therefore gain immediate access to the provider’s standardised processes, tools and technology, and secure global data warehouse. This allows the customer to begin realising savings through process efficiencies, advanced technology, and labor arbitrage without having to spend the time and money to implement ERP changes. The BPO provider enables this by dropping in an ‘extension’ of the SOA that automates communication with the customer’s systems and enables data transfer from those systems. Once the extension is in place, the customer has the ability to view consolidated data across the entire organisation. Since the provider uses the same process and data center regardless of the underlying ERP system, the process essentially becomes ERP-agnostic, and the provider’s transactions processors can access all the necessary applications and systems with a single sign-on. This ability to interact with the customer’s many ERP systems and systems without having to replace the legacy software is a major breakthrough in transformational outsourcing, and is one that is likely to become the standard as both customers and providers learn the benefits of the SOA-based solution.

Business benefits of SOA

The benefits of SOA in the BPO environment fall into five major areas: cost, speed, agility, scalability and transparency.

Cost

By far the most significant cost savings come from the ability to avoid or delay large-scale ERP transformations. By implementing an SOA architecture and placing a single ‘wrapper’ around the existing disparate systems, companies can leverage existing software investments and avoid or delay the time and expense of global ERP consolidation projects.

Although implementing an SOA-based solution will not fix any underlying ERP issues and a global harmonisation of the ERP platform may still be required in the future, it will still allow customers to gain immediate access to consolidated business views and to leverage the benefits of standardised business processes and tools across their organisation.

In addition to avoiding or delaying the cost of full-scale ERP migration/implementation, by de-coupling the BPO provider from the customer, the SOA structure can also eliminate the cascading impacts of software changes and upgrades and thus simplify ongoing maintenance. SOA’s use of defined industry standards also enables old and new applications to communicate with each other, now and in the future. This means that new applications written using industry-standard languages can be reused by any program that uses the same standard. This ability to reuse programming makes it easier to add functionality in the BPO environment, providing benefits for both BPO providers and their customers.

Whilst BPO providers benefit from greater agility and the ability to respond faster to customer business changes – and from gaining an economical way to offer ‘services on tap’ to their customers – their customers benefit from the ability to pick and choose the services they need as their business requirements change, giving them greater flexibility to manage their business.

Speed

The second key benefit of the use of SOA in the BPO environment is speed to market. By implementing an SOA-based solution, the BPO provider essentially builds a plug-and-play ‘container’. The provider can then quickly implement a solution by grouping services together within the ‘container’ to support customer-specific requirements. This rapid implementation allows customers to begin realising savings and efficiency gains in a relatively short time.

Agility

An SOA structure also allows the BPO provider to quickly respond to changing customer business needs by providing a means to isolate a customer service or set of services. The SOA structure enables the provider to modify services offline to meet the customer’s new requirements and then integrate those services back into the process flow—without disrupting ongoing operations. SOA also facilitates the incorporation of best-of-breed, off-the-shelf solutions. Furthermore, the integration of acquisitions is simplified through the ability to simply ‘drop in’ an appliance close to the existing ERP system(s) and begin processing.

Scalability

The ‘plug and play’ nature of SOA enables different companies or business units to simply plug into, or unplug from, the container without disrupting the ongoing BPO operations. This ability to plug and unplug business units in a rapid and non-disruptive manner makes the SOA platform a highly scalable solution for both customers and BPO providers. From the BPO provider perspective, because the IT architecture of the SOA solution is designed to easily integrate new entities, the provider can not only accommodate new business units, but can also leverage its investment across multiple independent customers. This reduces the BPO provider’s design and operating costs and allows it to provide lower cost services across its customer base. In addition, the BPO provider can plug-and-play additional solution applications into the container and easily add or upgrade functionality to its suite of customer solutions. From the customer perspective, scalability means that customers can easily add or remove businesses and or services without causing major disruptions to their current operations. This scalability provides for greater business agility and lower operating costs.

Transparency

Previously one of the key driving forces behind ERP applications was the need for global consolidation of financial data to increase transparency and improve business management. Now however, SOA enables a single business-process portal to interface with multiple legacy financial systems, which in turn allows better visibility into business processes and ultimately results in greater control across the business. The ramifications of this increased visibility into the business reach across functions and should ultimately result in better forecasting, tighter controls, and more strategic decision-making throughout the business.

The future

Even as these tools and technologies are coming online, BPO providers are working on the next-generation platforms, which will continue to incorporate valuable new tools and services such as:

• Integrated business-process analysis tools which enables real-time simulation and analysis of business needs, infusing efficiency, effectiveness , quality and knowledge into critical business processes
• Real-time identification service issues and performance on an end-to-end basis,(from network through IT infrastructure to business processes), so that business and technology issues can be proactively addressed.
• Rules-based automated workflows to enhance business agility at all levels, aggregating company business rules within the architecture for comprehensive business-process change management.
• Web-enabled portal to provide a single access point to services which enhances processor productivity and improves business controls.

Final words

The expanding use of SOA is providing a means for BPO providers to connect with their customers and rapidly deploy BPO services in a less invasive, less costly and less time consuming manner. While there are many valid reasons for companies to opt for ERP consolidation – for example, to enable a single, consolidated general ledger – those companies who choose not to can still achieve through SOA a cohesive and comprehensive corporate view of operations.

As the BPO market continues to mature and provide increasing levels of sophistication in both products and services, the possibilities for the next generation of BPO platforms are endless.

In profile

HP is one of the world’s premier services providers for shared services and outsourcing. Based on first-hand experience and insights, HP has successfully led strategic assessments for numerous enterprises and has assisted in transforming the IT infrastructures of several Fortune 100 companies.

The HP business transformation journey began in the early 1990s, when the company set the strategic goal of reducing operating costs by 30 PERCENT in three years. HP embarked on an initiative to consolidate its business processes and move them to offshore services centres situated in strategic locations throughout the world. This initiative enabled the company to achieve its cost reduction goals, as well as improve service levels, well within the allotted time. More importantly, consolidation provided a springboard for further process improvement through the use of technology.

Today, the company is recognised for its successful business transformation journey and is viewed as a thought leader in shared services and outsourcing. Having transformed its own business and with more than 15 years of shared services experience, HP is uniquely positioned to understand the challenges of shared services and to help companies navigate through strategic and operational obstacles to build world-class processes. As a result, HP is often approached by Fortune 500 companies to conduct shared services and outsourcing feasibility studies, prepare business cases, establish service-level agreements, develop detailed implementation plans, and lead implementations of shared services centres and outsourcing arrangements.

Beyond serving clients as a consulting partner and BPO service provider, HP is a well-respected and active member of several shared services associations, and HP representatives are regularly asked to speak at conferences on both shared services and outsourcing topics. Underlining its business process excellence, HP has been named by Shared Services News as one of the “Top 10 most admired shared services organizations.” And most recently the International Association of Outsourcing Professionals (IAOP) has ranked HP as the world’s fourth leading services provider in its 2006 Global Outsourcing 100 list.

For more information, visit the HP Web site at www.hp.com/hps/process.

Evaluating the Role of the ERP in BPO

Evaluating the Role of the ERP in BPO

Regional and domain differences are observed. A majority continue to prefer retaining software licenses internally.

By Bob Cecil

EquaTerra recently completed a study with 126 finance and HR executives to determine how they viewed the role of their ERP system when evaluating and utilizing business process outsourcing (BPO).

Not surprisingly, SAP and Oracle were cited as the primary platforms of choice for companies (especially large ones) evaluating ERP systems. Of all respondents, 59 percent had more than 10,000 employees. Interestingly, 89 percent were involved in some sort of BPO activity. Further analysis showed that 60 percent have outsourced some finance and accounting functions, 61 percent have outsourced elements of HR, and 34 percent have outsourced parts of procurement.

The respondents were also asked to outline future plans for BPO: 48 percent plan to expand current outsourced functions, and 44 percent plan to expand to new process areas. None indicated a withdrawal from BPO.

In our work advising clients on strategies to improve business processes, a frequently asked question is, “How should the ERP application be evaluated when considering outsourcing to a third-party?” Fifty-one percent of respondents indicated the leading reason for their ERP selection was based on software choices that were a part of corporate strategy; 48 percent cited the importance of software already in use but not necessarily part of an overall strategy. Clearly, legacy software applications and strategies are a key driver here.

Ownership and management of the system are often a point of discussion when evaluating BPO. The study results demonstrated there was no general consensus on how companies approach licensing in BPO. Of the respondents, 31 percent preferred that the BPO provider manage the licenses; 27 percent felt the ERP application needed to be retained in-house; and 23 percent had no preference. The divided response indicates the challenges the market faces in understanding the service provider value proposition with respect to the ERP.

Of the respondents that prefer the provider retain responsibility for the licenses, 63 percent noted the convenience of the one-stop-shop approach; 47 percent cited the balance sheet benefit. Buyers typically reap greater financial benefit from the balance sheet impact, but more respondents just preferred the “hassle” to be transferred to the provider.

For those who preferred to retain responsibility for the application licenses, the reasons most often cited were control, flexibility, ease in managing, and retaining independence from the BPO provider. These reasons are also the most common across EquaTerra’s client base.

We assessed the responses by geography (Europe versus North America) and process (F&A versus HR) and found different views with respect to software licensing. Almost 35 percent of North Americans preferred the BPO providers retain the licenses, compared with 21 percent of Europeans. In HR, 37 percent of the respondents preferred the provider retain the licenses versus 20 percent of the F&A respondents—indicating that HR systems tend to be easier to separate from the organization (i.e., not tied to inventory, materials planning, etc.).

Each respondent was asked about the key enablers of BPO success, and surprisingly, the service provider system, or ERP platform, ranked near the bottom in order of importance. Of the respondents, 63 percent felt that a quality service provider was the most important enabler of BPO success. One would expect that response to be near the top of the list, but the perception that IT was a low-level enabler was a bit startling. Other key enablers cited were service providers meeting cost reduction goals, a quality contract, and strong service level agreements.

Scoring lowest of all was the use of offshore labor. Our view is that many respondents enjoy labor arbitrage but do not view this as critical to success. While a service providers’ ability to achieve its cost reduction goals was cited as second in importance, many of these savings targets are only achievable when remote location labor pools are in the mix.

Finally, the respondents were asked to explain which factors within IT are critical to BPO success. Several of the factors included:
• Meeting quality and improvement goals;
• Meeting cost reduction objectives;
• Meeting regulatory compliance requirements; and
• Supporting outsourcing management and governance.

One of the respondents noted, “To have successful BPO, you need people, process, and systems, and without the third leg, things will fall over.” Another noted, “Without a good IT system, you have no idea how successful the outsourcing process has been. You need to have a way of measuring your success, and IT can provide this.”

To obtain a copy of the full study, e-mail research@equaterra.com.

Bob Cecil is EVP of F&A and Shared Services Practice Leader for EquaTerra. He can be reached at bob.cecil@equaterra.com.

Business process outsourcing

Business process outsourcing

Business process outsourcing (BPO) has become a major driver of performance in business today and it can also be a driver for strategic change. Companies the world over are realising the many benefits of transferring non-core activities to specialist companies. LogicaCMG has 30 years of experience as an innovator in this field and as a result, we have developed an impressive track record and a wide range of services.

BPO allows you to outsource individual, non-core business processes to LogicaCMG, such as: finance and accounting, payroll, HR administration, training, procurement administration and supply chain management, customer contact and special industry-related processess in areas such as banking and insurance, and information and content management.

You will improve cost effectiveness significantly and become leaner, more efficient, more agile and more competitive without large back and middle office operations. You maximise capital investment in your core areas to compete better.

Why LogicaCMG
We have extensive experience in BPO with both commercial and public sector organisations. We manage payrolls, electronic marketplaces and core business processes for a wide range of companies and government departments in Europe, Asia and the U.S.

Our ‘blended sourcing’ approach, which combines onshore, near-shore and offshore resources, gives you the best combination of expertise to suit your needs. We are leading global partners of SAP, Oracle and Agresso, so we have an in-depth understanding of back-office processes and how to deliver them effectively.

A BPO agreement often forms part of a major change programme and involves the transfer of staff as well as assets. We have successfully transferred thousands of people and created new and broader career opportunities for staff.

Finally, we recognise that outsourcing is a partnership, not just a service. Our contracts have continuous improvement measures built in to make sure the partnership works for the duration of the agreement.

What we deliver

• A blend of expertise to suit your needs
• Faster innovation and business change
• Mission-critical solutions
• State-of-the-art technology and communications infrastructure
• Increased productivity
• A smooth transition to outsourcing
• Maximum value from technology

Our BPO capability is, of course, complemented to your advantage by our wide-ranging IT outsourcing experience.