Herein lies the BPO conundrum: As outsourcing providers, there is only so much we can do with processes and labor arbitrage to meet the client’s expectations – drive down costs while driving up quality of delivery.
Unfortunately, the market is also complacent – many companies already have systems in place to drive some automation but are resistant to change. Many times these systems are inefficient or only address subsets of what can be automated. On the procurement side, this is largely due to lack of oversight on change management and not getting enough suppliers and content into the tools, in combination with an unpleasant end user experience (UX). In reality, this means you have a more or less empty department store and an overall failure in procurement technology.
For innovative organizations, this is where automation through technology and robotics can advance the BPO process. In fact, the BPO industry has been humming lately with talk and anticipation around Robotics Process Automation (RPA) as this emergent, game-changing technology has the potential to serve as a vital efficiency tool. RPA is already making gradual in-roads as it transforms how back offices are managed, changes how businesses operate, and plays a critical role in how labor is distributed.
However, what I am seeing with other BPO providers is a reliance on third-party application and software providers, making attempts to collaborate with them to address the needs of their customers. Naturally, this is rarely aligned with the third-party software providers’ agenda or product roadmap. In essence, this means that the BPO provider lack control over the evolution of the technology, while at the other end, IT departments which are tied to BPO delivery capabilities, are rolling out point solutions for individual engagements. While this strategy might drive some sense of automation, let’s ask ourselves a critical question – at what cost is this brand of automation worth, and what is the output in the longrun?
The most practical and efficient strategy that nurtures long-term value is created when the BPO-provider bring in their own IP; their own technology. And Im not referring just to point solutions. I’m referring to point solutions and multi-tenant solutions. Not only is this approach aligned with the process models that are provided to clients, the technology will develop and emerge through innovation driven by customer insights, learnings and best practices, aggregated by BPO, for BPO. Naturally, multi-tenant solutions truly drive automation in a very cost efficient way.
In an ideal scenario, multi-tenant solutions off the shelf should take automation to the next level through an adjusted fit for the provider’s BPO capabilities. Moreover, if the solution is Cloud-based, it will be able to address the automation and usability issues that the BPO industry must start delivering on – whether it is in the Procurement or Finance and Accounting Outsourcing (FAO) space. Let me give you some examples:
- In a multi-tenant system, the invoice status portal that drives productivity in FAO help desks can redirect most help desk queries to a portal and self-service solution. This solution also makes suppliers happy as they now have their invoice and payment status readily available at their fingertips.
- ERP procurement systems like SAP SRM, Oracle iProcure and SAP MM tend to be clunky. The biggest reason for lack of compliance in companies operating these systems is that users go elsewhere to shop. They make an extra effort not to use the system. A Cloud-based, user-friendly and ERP-agnostic eProcurement “skin”solution on top of these back-end systems, fill out the shopping content and consequently attract users. And since system compliance is the first and necessary step towards doing it right, not only will this drive up usability, it will also increase contract compliance, spend capture rates and drive up the levels of no touch POs. Outcome: Superior savings results through automation and compliance.
The current trend of relying on ad hoc point solutions and third-party software providers will in the long run outweigh the intermediate value. Ultimately, the client will bear the burden of the cost. In a scenario where the BPO-provider own the technologies, such as Capgemini’s IBX Shop, the BPO-provider is able to evolve BPO automation products while driving automation and robotics-based multi-tenant solutions.
In summary, you can buy this from five different providers, but it will only be as good as it came across at the point of purchase. But it will never be more than perceived value, when the ink is on the paper you are on your own. This is why clear accountabilities are much more important than artificial synergies when selecting your next BPO-provider. Make your pick.
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