As the business process outsourcing (BPO) market matures, buyers are expecting outcomes from BPO beyond just cost reduction. Next generation BPO buyers are demanding services providers bring industry expertise and insight, analytics and innovation to their engagements; adjust nimbly to shifting business directions; and drive better business outcomes. Accenture considers relationships that are achieving these exceptional results to be high performing.
So what distinguishes high performing BPO relationships from “typical” BPO relationships? Accenture set out to explore this question in a new study, conducted with the Everest Group and The Outsourcing Unit at The London School of Economics. The study uncovered eight best-in-class behaviours that separate the high performers from the rest:
1. End-to-end approach: Holistically managing the scope of the BPO relationship
For those that are most successful, the entire, end-to-end business process is within scope of the BPO arrangement, including elements managed within the client’s enterprise, those run by third parties as well as related processes that may impact overall performance.
2. Collaborative BPO governance: Adopting a partnership attitude
The disparity between high performing and typical BPO engagements is particularly evident in this practice. Nearly 85 percent of high performers consider their BPO provider to be a strategic partner versus just 41 percent of typical engagements.
3. Change management: Managing the effects of change during transition and beyond
The gap between high performers and typical performers is large in terms of attitudes toward change management, but especially when it comes to executing a robust change management program. Eighty-eight percent of companies working within a high-performance BPO relationship regard change management as important and execute carefully planned change programs.
4. Value beyond cost: Focusing on benefits beyond cost reduction
In high-performance BPO, both client and provider acknowledge the importance of cost reduction, but do not see that as the prime motivation. This mindset manifests itself in several ways, including how the business case for the BPO program is constructed.
5. Business outcomes: Targeting strategic outcomes, not just more efficient transactions
High performers aim for specific strategic outcomes from a BPO arrangement that can be measured and that can help achieve competitive advantage. Beyond that, they also forge deals that incentivize both parties to achieve those outcomes. .
6. Domain expertise and analytics: Contextualising data to create business value
As BPO evolves and matures—and as it enables richer and more complex business outcomes—the field of providers is beginning to separate out in terms of their ability to provide new levels of value. Part of that value is in the ability to use deep domain and industry knowledge—and the ability to analyse data about the functions and processes being outsourced—to more predictably drive business outcomes.
7. Retained organisation transformation: Enabling the retained organisation to perform effectively in the new environment
High performers place as much importance on internal transformation as they place on transforming the outsourced processes. Companies with high performing aspirations also need to re-align the retained organisation around the outsourced delivery model in terms of roles, responsibilities and requisite skills.
8. Technology as a business enabler: Driving operational improvements and business innovation
Technology should be a source of innovation and advantage, not just the infrastructure of delivery. For example, 40 percent of high performers consider technology provided by the service provider to be an important component of the BPO relationship, compared to only 27 percent of typical performers.
Overall, the research found that only 20 percent of those surveyed are classified as high performers. It’s clear there’s a significant opportunity for organisations to capture greater business value from BPO, adopting the behaviours and practices associated with high performance to build new competitive strengths. Those that continue to view BPO purely in terms of transactional processing and cost will be competitively challenged.
