Why BPM & BPO Together Deliver Operation Excellence for Changing Business Demands

Business process outsourcing (BPO) is all about where and how a company can best use IT to gain competitive advantage by outsourcing. We have seen that business process outsourcing (BPO) is increasingly becoming the strategic fit for the companies looking to achieve operation excellence, service quality and cost reductions while focusing on their core business capabilities. Companies perform strict due diligence on BPO’s technology and performance before selecting the best BPO vendor for their process outsourcing needs.

There is major shift in the focus for a company to choose a BPO vendor, companies look for:

  • Quick process rollout – How quickly BPO can deliver the process automation and its technology alignment to integrate with company’s core application.
  • Manage change quickly – How quickly BPO can rollout and adapt to process changes brought in by from business, market and different geographies.
  • Real time visibility– How BPO can provide real time visibility to their key processes- Companies wants to work in collaboration with BPO to have visibility on the complete process by monitoring them.
  • Cost reduction – How BPO can bring in opportunities to reduce cost and improve process efficiencies
  • Flexible pricing options–How flexible BPO can be by providing different pricing options for company to choose for its needs.

Most business processes in a company are human-centric or able to be processed straight, require frequent changes from business and do not provide competitive advantage to keep them in house. The need to outsource complete process or some steps of the process to a BPO depends upon the process volumes, data entry, verification, sampling, quality checks needs and type of auditing and reporting required on such processes.

Some of the horizontal candidate processes for BPO can be:

  • Finance and Accounting (F&A) – Invoice processing, procure to pay, order to cash, record to report, ERP integrated accounts payable, accounts receivables and vendor maintenance etc.
  • Human Resources (HR)– Employee reimbursement, travel & entertainment, medical reimbursement, employee joining & transfer, employee relocation etc. in HR.

Some of the vertical specific candidate processes for BPO can be:

  • Healthcare – Medicare enrolment, medicaid enrollment, provider contracting, claims processing etc.
  • Banking and Finance – Account opening, account servicing, customer query resolution, mortgage processing (loan origination) and others in trade finance business.
  • Insurance – New business, claims and anything that follows an ACORD form in insurance.
  • Telecom – Customer on boarding & acquisition, data entry & verification, complaints handling, disputes, bill processing etc. among others.

and many more across verticals…

With the BPO market maturing and the focus shifting towards complex process outsourcing engagements from simple-process outsourcing, BPO vendors need to adopt a more customer centric, creative and re-use based approach to deliver BPO services.

A research shows that some BPOs have taken steps in this direction by creating custom applications to suit a particular client’s process needs. But this custom development using traditional software development practices, consumes anywhere from 20-33% of the total deal value and lengthens the ROI time for clients. Other BPOs have acquired software companies to use their platforms to achieve the goal, but the inflexibility make change to those applications makes them not a better choice.

Business Process Management (BPM) software offers a unique approach. It allows BPO’s to easily create and re-use custom process applications for the client’s process needs that dramatically improve processes rollout time, reduce operating costs and enhance client service. With keeping this in mind some of the benefits BPO’s can achieve using BPM can be:

Operational benefits:

  • Shorter process rollout time, leading to faster benefit realization with low risk and cost for the BPO.
  • Ability to rollout and work on same process with minimum cost for multiple geographies and languages. BPM providing multitenant and multilingual support.
  • Leverage processes created for geography to other geographies or for one client to other clients, further reducing the client’s time to market, cost and risks
  • Ability to make process improvements, by extending real time visibility of the client process to the client and bringing in collaborative monitoring and control.
  • Flexible pricing options, per seat or FTE based, per instance based, fixed cost, concurrent request based; giving flexibility to the client to pick one for his needs.
  • Ability to extend critical and confidential  steps of the process to the client to process like exception handling, approvals etc. without incurring development cost while separating it from the total cost of process work.
  • Capacity tracking, ability to track the capacity and take in time cost effective decision.
  • Easily upgradeable platform without impacting any client process or major downtime.

Staff and FTE benefits:

  • Improved staff and FTE productivity through automatic work routing based on staff skill, roles, efficiency, past trends of working on process.
  • Reduced FTE and staff user interface switching costs via a single and unified BPM interface, no matter what back-end client system is holding the process.
  • Increased productivity of staff and agents with easy identification of the most productive team and member of the team to provide rewards.
  • User-friendly and intuitive screens for staff to work and pick up the process with contextual helps etc.

Benefits to their client:

  • Adherence to SLAs because of BPM’s out of the box ability to real time report on a wide range of process and data information.
  • Real time visibility using business activity monitoring (BAM) capabilities of BPM into processes.
  • Leverage modern social interfaces and on the go mobile process participation to monitor and work on the processes.
  • Ability to adjust, evolve and rollout processes using BPM as the client’s market or business conditions change.
  • Reducing turn-around time for processing and adherence to timelines.

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By RahulKochhar @ BPM, ECM & Digital Specialist | June 24, 2013

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