Is the Landscape
of BPO Changing?
The industry is littered with case studies of abandoned projects,
contracts rolled out with SLAs being broken, but managed by
the outsourcer. New developments in technology is changing the
business map.
ver the last 20 or more years, we have seen
O
enormous changes in technology and services.
It could be said outsourcing was the buy-in to
a solution for a global template for technology
and services. It enabled a company that did not have
the necessary skill and expertise in-house to outsource
administration, a major part of which would be an ERP
delivery and business process, re-engineering and a
migration de facto, into a shared services environment.
We have all learnt, I hope, best practice in this
respect; different BPO companies delivered this with
differing levels of quality. I think there are more
horror stories than there are success stories. The
industry is littered with case studies of abandoned
projects, contracts rolled out with SLAs being broken,
but managed by the outsourcer. When it comes to
contract renewal, businesses could insource or obtain
a technology upgrade by continuing the engagement.
Karen
Paterson
MBA, Dip BA, ACIB ATT
Group CEO
Acrede
16
Accolade
OCTOBER 2013
S
o where is this all going to go? Cloud
technology will disrupt this model. So
now let us explore the reasons why.
The major BPO providers have been restricted by
the size of deals they can handle for a number of
reasons; these include but are not limited to:
• Inflexible technology that will not scale down to small
numbers
• Languages – it used to be hard to find the right skill
base in one centralised location to support smaller
country head count especially with tier one voice
support
• Sub - contract of services for smaller countries could
not be made profitable.
This has forced an approach of a minimum deal
size and minimum size per country as a part of
the overall risk management and profitability
assessment. Capability has also been an issue.
Alongside this, the positioning of the major BPO players
in the world was changing. Many small companies
were becoming international. The problem domain was
control visibility and compliance over the countries
which could not easily be catered for with in-house
skills, especially payroll. This could be overcome with
larger companies, albeit very manual and hard to
manage, but for less than 2,000 employees (which
is a sizable business) it was nigh on impossible.
Smaller international businesses face the same problem
as large multinational companies. They have a globally
diverse employee base; they need control visibility