At the start of the year I became the CEO of Capgemini’s BPO Strategic Business Unit. We have just celebrated 10 years and I am proud to say that I have been here for nine of them. During this time, we’ve seen a lot of changes in the industry, so now seems like an excellent moment to pause and reflect.
And then get excited, because I believe that the BPO industry is developing some really fantastic capabilities and we’re in a position to transform the way that organisations work for the better if we build on our successes.
Here are some reasons why, and some of the arguments that I think need to be won along the way.
The evolution of BPO.
BPO has evolved considerably since it started out, when the focus was mainly on labour arbitrage and consolidating back office functions in lower cost locations – aka ‘Lift and Shift’.
Obviously, the cost imperative is still there. But some of the most compelling business benefits I’ve seen in BPO now come from process and technology improvements, not simple FTE cost cutting. If you combine this with the improvement in quality leading to significant business value the impact is beyond compelling.
This probably isn’t news to some people. The more experienced enterprises now say they expect to move into a more transformational environment when they enter a deal. But how strong is the legacy viewpoint that still sees BPO through a ‘Lift and Shift’ lens?
Strong enough to suggest there’s still a case to be made. And that many organisations will continue to miss out on the benefits until we can convince them that times have changed.
Outdated stereotype versus modern reality: those that can’t see beyond BPO’s roots are already missing out.
The persistent legacy.
Where are the opportunities to do things better and win the argument for BPO?
Here are some typical symptoms of the ‘Lift and Shift’ legacy that I see around today, and some reasons why they don’t always make sense:
Simply handing over a bad process to someone else.
In this case you’re simply outsourcing bad practices to someone else. It may be useful as a short term fix to a problem, perhaps supplementing labour you’ve retained, but it creates limited business value beyond that.
Handing over a bad process to someone else, and then asking a different someone else to fix it.
This happens when people see business transformation as being the sole preserve of third-party consultants. They are smart people, but they’re not as close to the transactional data and the challenges of delivery – and they’ll often have a preferred technology in mind as a starting point, no matter what they say.
I’ve seen BPO providers deliver huge value here, but if you only see them as ‘labour managers’, you’ll miss out.
Focusing on cost, but missing the true total cost of ownership and potential business value.
When you’re choosing a provider, don’t race to the bottom – it’s a mistake to still only see costs in terms of basic metrics like FTEs.
A mature BPO provider can help you understand and cut the total cost of ownership across the process and technology whilst creating and measuring business value. This more sophisticated approach should also be reflected in the contracts and commercial relationships with providers.
Sticking with what you know, because ‘Lift and Shift’ is quicker and less risky than ‘Transformation’.
This might sound a reasonable enough assumption but I’d challenge it strongly. ‘Lift and shift’ can run the risk of staff leaving and taking critical knowledge with them. Improving and applying a repeatable process through something like our Global Process Model actually lowers the risk.
And as for speed, we’re seeing faster implementations than ever before (months not years), even for global rollouts.
The new drivers of transformation.
Enough of the challenging legacy – what are the reasons to be excited? I appeal to clients (and analysts!) to expect more from BPO providers.
Here are some reasons why:
BPO increasingly employs very highly qualified people who often have extensive experience in business. For example, I used to head up the F&A team and I’m a former CFO and CIO – and many of my team are fully qualified accountants. When they all focus on creating business value in one dedicated area, it’s a powerful force for change.
The analytical firepower
While we’ve been doing the ‘heavy lifting’ over the years (over 100 BPO and Shared Service implementations) we’ve also accumulated a lot of data, allowing us to build benchmarks and grow a significant global analytics capability.
The expanded capability
Think of a transformative BPO as a ‘hands-on’ professional services organisation. In our case, we have an in-house consultancy team, a proven business transformation methodology (using the Global Enterprise Model), dedicated sector and function specialists, and technology expertise at your disposal.
Eureka! Time to celebrate BPO
As someone from an enterprise Finance and IT background, I find it easy to get excited about BPO. You can tackle the challenges of some of the biggest names in world business. And actually help deliver the solution – working on it, owning it. But I also know that it doesn’t quicken everyone’s pulse!
As an industry we’re naturally understated and discreet. We don’t create superstars. But we must do more to shout about our achievements – and they’re huge, when you consider how young BPO actually is.
So I think we should celebrate the Eureka moments.
These are the moments when someone spots the value opportunity, helps plug a gap or transforms a client’s understanding of an issue. It’s when all the insight, expertise and dedication combine and we’re in a unique position to show leadership.
In the coming months, I’ll be sharing some of these Eureka moments, and the thoughts of the brilliant people who have them.
I can’t think of a better way to show how far we’ve come. It is time to be bold and attract more talent, clients and attention for a wonderfully exciting industry.
Archimedes runs naked into the streets of Syracuse: it’s time we injected some of this excitement into BPO, albeit while keeping our clothes on…