High performers recognise the BPO value multiplier effect
The full business value available from business process outsourcing (BPO) today is being realised on a relatively limited scale due to the misconception of BPO as a labour or process substitute rather than a value multiplier. Findings from the recent Accenture 2015 High Performance BPO research report found that only a select group of companies – about one in five – are fully capturing business value from their relationships and can be classified as “high performers.” This is nearly identical to the distribution of high performers revealed in a similar 2012 study, indicating that the majority of relationships are still failing to deliver their full potential.
So what gives? Clearly the perception of BPO hasn’t changed much over the past three years and a shift is still needed for organisations to capitalise on the full business value BPO initiatives have to offer. But what’s becoming evident, as proven in the study, is that high performers are increasingly characterised by visionary leaders who understand the critical role that technology and talent play in multiplying business value for their enterprise. These are two key areas where the correlation with high performance is significantly stronger today than it was in 2012.
Advanced technologies are now distinguishing the best BPO engagements from more typical ones. High performers are moving toward digital operations, characterised by the use of the latest innovations in automation, analytics, cloud and mobility. Among the companies surveyed, 69 per cent of those identified as high performers said that gaining access to technology in a BPO relationship was important, while only 27 per cent of typical performers agreed. A provider’s ability to bring specialised technology solutions and expertise is becoming a critical factor in unlocking new forms of value.
In addition to technology, BPO providers and buyers alike are finding that talent – both in the retained organisation and among providers – is also becoming a powerful value multiplier. After years of insufficient investment in people, companies are now starting to realise that talent is a critical differentiator. About eight out of ten high performers said their BPO relationship allowed them to augment their talent pool and gain access to scarce skills. More than half of high performers also noted that their BPO relationships did more than just add talent; it helped them transform their retained talent model as well, acquiring new capabilities and re-training existing staff to focus more on business outcomes than process management.
A Powerful Combination
It’s this balance between technology and talent that has the greatest impact on the top-performing BPO relationships. Automation technologies are eliminating some transactional work, driving process improvements, reducing the need for labour and increasing quality. This not only increases speed, productivity, accuracy and standardisation but removes subjectivity and enables repeatability.
High performers are using data and information from the services of a BPO engagement to capture additional business benefits. Outsourcing providers with a mature analytics capability can deploy algorithms, models and statistical analysis to measure the right key process indicators, identify process weaknesses and opportunities, and redesign processes to deliver measurable business outcomes.
While new technologies and innovations are changing the current BPO model, they are also changing the kind of talent that providers need to deliver the greatest value to clients. This means that buyers and providers alike should focus on the skills that higher-value BPO talent can deliver, such as industry expertise and high-demand analytics skills.
While digital technology and talent were their most distinctive characteristics, high performers in our study were also found to have a focus on creating value rather than on lowering the cost of service. Sixty-five per cent of high performers target strategic outcomes and look for competitive advantage, compared to just 23 per cent of typical performers.
Ultimately, the keys to a successful value based approach are a combination of automation, analytics and deep industry expertise to generate insights and foresight – which enable better business decisions, reduce costs and increase revenues. The forward-thinking organisations that recognize the value multiplier effect will be in the best position to get the most out of their BPO relationships today and in the years ahead.
About the Author
Simon Sammons is Managing Director – Business Process Outsourcing, the Offering lead for Business Process Outsourcing (BPO) at Accenture, where he is responsible for the evolution and growth of Accenture’s industry-specific and cross-industry BPO offerings. In this role, he is also responsible for the integration of BPO into function and industry business services and leads a global team of professionals charged with growing each of Accenture’s BPO offerings to be #1 or #2 in the market. He also leads the UK Accenture alumni program, which maintains a strong contact network between Accenture and its alumni across the business community.