‘BPO As a Stack’- Back office on the go

Rajendra Deshpande, Chief Information Officer, Serco Global Services

By: Rajendra Deshpande, Chief Information Officer, Serco Global Services

The emergence of disruptive technologies has brought the BPO industry at the brink of the next evolution cycle. The industry is metamorphosing by aligning its processes to these technologies so as to use its resources more effectively and bring more value to the business. Most BPO providers are experimenting and evaluating to make changes in their sourcing models and contemplate newer BPO practices. This stems from a changing reality where buyers of BPO services are today revisiting their technology & operational infrastructure, business applications in an inclusive and unified manner to achieve optimized outcomes and costs.

Add to this the forces of virtualization and cloud computing over the years that have effectively seen the migration of application environments to the cloud. A combination of these forces has led BPO providers to deliberate innovative, scalable and non-linear models.

The Business- Process-as-a-Service (BPaaS) or BPO as a stack is one such model. According to the Everest Group, BPaaS is a sourcing model where buyers receive standardized business process services on a pay-as-you-go basis by accessing a shared set of resources (people, application, and infrastructure) from a single provider. So, BPO as a Stack combines all aspects such as services, processes, applications and infrastructure into one approach that allows companies to address all components together. In an ordinary setup, all components would have to be tackled separately – which in turn would mean more investment of time and resources in the mechanics.

A new approach to outsourcing, it is fundamentally different from the traditional model as it seeks to converge cost optimization at the operational layer, Software-as-a-Service (SaaS) concept at the business application layer, and Infrastructure-as-a-Service (IaaS) construct at the technology infrastructure layer in a unified fashion. These services are mostly automated. However, where there is a need of human actors, the likelihood of dedicating a labour pool to attend them is minimal.  They are also quite cost effective as the payment model is usually consumption or subscription based.

Integrating services and offering them as a stack is beneficial as it offers a one-stop solution to clients for their IT requirements. Till a few years ago, companies undertook in-house training programmes or recruitment drives to manage various operations. However, in the recent years Business Process as a Service or BPaaS has emerged as a solution that allows businesses to stack their offerings, achieve desired outcomes and establish valuable client relationships, in the face of shrinking budgets and increasing technological dependence.

 

Studies by Gartner indicate that Business process as a service (BPaaS) is expected to grow from $130 mn in 2014 to $351 mn in 2018. One of the most appealing benefits that BPaaS offers is that of cost effectiveness. By adopting BPaaS, companies can cut costs on hardware and software maintenance and reduce TCO. With BPaaS, companies can save on the expenses that would otherwise be spent on costs of operating, upgrading and updating software – both process and resource wise. This allows businesses to spare resources of the bandwidth that would be spent on mundane tasks and allow them to focus on more revenue making activities. These way resources do not have to invest their time in entering data, cross checking accuracy of the information entered, etc.

Some of the characteristics that define BPaaS are:

  • A BPaaS service is configurable based on the process being designed
  • A BPaaS service usually ought to have well-defined APIs so as to be easily connected to related services
  • The client does not manage the underlying software, platform, or infrastructure including networking, operating system, database management systems, storage, processing, storage, networking, security
  • For the customer, there is a singular service provider touch point, which furnishes the entire business process delivery in a utility model
  • It is usually beneficial for customers because it directly impacts on their savings and positively reflects on their top line & bottom line

 

Some of the factors that one needs to consider when opting for a BPaaS set up are:

  • BPO applications ought to be very agile if they have to work properly. It is imperative that BPO providers adopt agile frameworks like Scrum, to deliver high quality working software and have tangible results.

 

A BPaaS environment must be able to handle massive scaling. The service must be able to go from managing a few processes for a couple of customers to being able to support hundreds if not thousands of customers and processes. Embracing BPaaS isn’t about buying services over the cloud; it is a paradigm shift in business models and a thought process. It calls for a tighter alignment of providers, buyers, product vendors to partner and achieve business success. It, hence, calls for sufficient collaboration and co-creation.

 

The occurrences of BPaaS today are on a modular level and several organizations are outlining long term plans that should eventually weave individual modular efforts into unified platforms. BPaaS is at an early stage of evolution and for a BPaaS platform to replace a legacy system in its entirety, there is still sufficient ground to cover!

 

It is undeniable that companies that handle software themselves have less time to be efficient when researching, developing, and selling their products and services. By increasing efficiency, Business Process as a Service gives companies an important competitive advantage.

 

The greatest advantage, without doubt, is the freedom to focus on core competencies. When companies register rapid growth, they tend to consume more resources on administrative activities than investing them on tasks that could add value to their clients. Business Process as a Service can help organizations to eliminate distractions and concentrate on their core competencies, which results in larger business wins and growth in the long run.

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