The business case for outsourcing to BPO (business process outsourcing) companies may be relatively complex or very straightforward and should not be built around the “build-it-and-they-will-come” paradigm as this can dilute even the best strategy.
Organizations too often opt for BPO, expecting dramatic benefits almost instantly which rarely materialize.
Improving the bottom line by cutting costs through outsourcing makes common enough sense. But the key lies in paying full attention to issues such as which BPO company will be able to meet your requirements in matters such as quality controls, maintaining delivery schedules and the anti-social effect of time zones. This is especially true in the case of managed IT services, where slips are all too common and deadlines are tight.
So how does one maintain quality and cut costs?
Business case realization provides the framework for bringing the benefits anticipated from BPO initiatives to fruition. It is a proactive, continuous process to understand, measure and achieve predictable and sustainable business value.
Business case realization ensures that organizations understand progress and make course corrections as necessary. This approach should be incorporated into the BPO initiative from the start, touching multiple areas and disciplines within the initiative. This approach is not as simple as “wait and see,” but it makes sure that BPO companies whether they are managing IT services, or providing HR solutions, do actually ‘deliver’.
Let’s see how business case realization works by examining some key attributes of this approach:
The business case is the compass that points towards benefits in terms of the outcomes, associated measures and value. Keeping this in perspective, business case realization must develop activities, resources, accountability and measures needed to achieve such benefits. The outcomes also establish traceability.
This has some similarities to program management and it’s one of the key disciplines aligned with this approach. This program management approach also ensures that there is a clear line of sight between BPO benefits and organizational imperatives.
Proactive: Anticipating and controlling instead of reacting, is the cornerstone of business case realization. It goes down well with employees who like to see that while their company is aware of the risks while trimming costs, and has employed checkpoints and milestones to ensure quality within timeframes.
Although each BPO initiative is different, key groups such as the providers, management, employees and customers should be actively involved and anticipate what is likely to go wrong.
‘Have I helped to create a strong linkage of shared accountability between the management and all BPO companies?’
‘Do our managed IT service providers look at this as just a service level agreement (SLA) or do they really understand the interdependency of their services on our operations and share our objective of providing customer value?’
Conversely, does your management view the providers as just mere vendors or have they taken the right steps to ensure seamless integration between the services they provide and the rest of the organization, such as making key resources available for knowledge sharing?
Answers to these questions dictate the success of the BPO initiative.
Cyrus Bilimoria is a freelance columnist with keen interest in outsourcing issues. He writes on and has first hand operating experience in the practices of BPO companies especially managed it service providers.