The Typing Factory

• Log in
• Register

“All glory comes from daring to begin.”

Eugene F. Ware 

Business Process Outsourcing: Fad or MegaTrend?

Online Digital Typing & Translations @ The Typing Factory
The typing services provider for high quality, low cost
online typing & translations services

We strongly believe business process outsourcing (BPO) and offshoring represent the next fundamental stage in business automation: further streamlining business processes and systems using external vendors.

Global firms are becoming geographically dispersed networks of capabilities and resources. For the last four decades, a majority of IT in global companies' efforts have focused on automating and improving the efficiency of individuals and operating units within the "four walls" of an enterprise. Yet, mounting margin pressure, global competition, and an increased focus on core business are driving companies like never before to look for new ways to get things done at a lower cost.

The BPO imperative requires architecting a new relationship infrastructure and set of applications, which are largely underdeveloped today. The scale of change and transformation we are talking about is much bigger than just outsourcing a call centre. It encompasses an interdependent Web of infrastructure, technology services, multiple application sectors and marketplaces.

Given the breadth and reach of the BPO build-out to come, we are confident that BPO will be much larger than any previous business automation cycle.

Our BPO growth thesis has six key building blocks:

1. In the face of non-stop pressure to cut costs, companies are now ready to outsource business processes and applications outside their "four walls." For the last four decades, virtually all IT advancements have focused on automating business processes internal to the enterprise (e.g., general ledger, manufacturing etc.). With this IT infrastructure in place, businesses are now looking to drive more costs out of this investment by further digitizing their business processes and, at the same time, tightly couple core business processes with outsourcing partners.
2. The driver of this next stage in digitizing processes is not technology per se , but changes in competition and how businesses operate and conduct business. Increasing competition and shortened product lifecycles are forcing companies to decouple their business processes and recouple them with outside partners to improve efficiency and lower costs and time to market.
3. Despite huge investments in enterprise applications, very little of the infrastructure and applications needed to automate BPO business processes and relationships outside the enterprise are in place today. The BPO build-out ahead represents an interdependent web of infrastructure, services, software, and portals - each piece of this technology puzzle drives and depends on the others for success and represents a powerful, multiyear investment opportunity, in our view.
4. At the architecture level, BPO is fundamentally about Web Services software integrated across partners and coordinated through well-defined interfaces. Our analysis is constructed on several key building blocks: 1) enterprise applications are the engines that automate complex business processes, 2) the Web is the most efficient vehicle for the widespread automation of customer and supplier relationships and 3) BPO relationships are essentially integrated Web Services modules that enable the automation of customer and supplier relationships over the Internet.
5. Currently, we are in the early stages of a BPO cycle that is unfolding in three interlocking steps: 1) IT project-based outsourcing, 2) task-based outsourcing, such as call centre and 3) business process outsourcing. Each phase will produce a discrete set of benefits, beginning with cost savings, moving to reduced product costs and culminating on a long term in a set of companywide benefits, including increased capacity utilisation, enhanced revenues and dampened price volatility.
6. We believe BPO is a multiyear investment cycle that will produce step functions of growth and value creation over the next several years.

The bottom line: We believe BPO has much more strategic value than the previous process automation cycles. The challenge will lie with the companies daring to grab at this opportunity - the future is here since yesterday.

Source: http://www.ebstrategy.com