The Increasingly Compelling Bpo Value Proposition And The Steps Required To Best Achieve It

The Increasingly Compelling Bpo Value Proposition And The Steps Required To Best Achieve It

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Given the costly nature of back office functions, it is becomingly increasingly clear that first in show, advanced, progressive companies realize that in order to survive these perilous economic times, major (if not THE greatest) capital expenditure savings are found in outsourcing those functions. With brick and mortar expenses such as added physical plant space, insurance and other benefits, unemployment allocations, workers compensation premiums, medical insurance and other employee benefits and, especially with the advent of new Congressional/Administration required health benefits, these first mover companies have discovered that their capital outlay is significantly reduced by outsourcing non-core competencies so that they can focus on their core competencies without having to give another thought to these crippling expenses.

While some companies have been long-time users of some level of BPO services, even if only for minor repetitive functions such as payroll, A/R, A/P and customer service, even today, very few companies believe they are outsourcing business processes. And, even more interestingly, an even smaller percentage of these companies see Business Process Outsourcing (BPO) as a means to the end of not only more effectively controlling operational costs and boosting efficiency but also as a robust vehicle for gaining new strategic insights and unique expertise. This is what may be termed the second essence of BPO: not only does the outsourcing of your business processes reduce your costs but this strategic action does, in fact, provide enhanced efficiency and insightful expertise to your suite of back office functions.

The harsh reality of todays economic environment in terms of pressures of ever-rising costs is mandating that many companies examine their businesses in a much more enlightened and creative way even as they struggle to find ways to streamline and improve services to their clientele at the same time. In so doing, they are discovering that it is no longer possible nor, for that matter, prudent, to perform all operations in-house. The ever-expanding explosion of advances in information and communication technologies is forever changing customers' buying behaviors and expectations thereby making the effort to merely keep up a formidable challenge for businesses of every stripe.

Companies striving to discover ways to transform business models are pleasantly surprised to find that BPO is a key efficiency and cost lever that can literally transform their business models through new, strategic insights and unique expertise. As they examine the strategic objectives for their business, they have determined where you want and need to be an expert, e.g., customer service, marketing, channel flexibility, innovative products and they then work with a seasoned BPO provider to mutually craft ways that BPO services will support and strengthen the business capabilities required. While these companies usually avoid outsourcing the functions that they rely on for their business model differentiation, they are finding that it is not only possible but inherently compelling to utilize BPO services as an augmentation of their unique core capabilities.

The typical go-forward steps that most companies utilize in the successful transition of their outsourced business processes are, in the broad strokes, usually along these lines:

1. A determination of where the company will be able to achieve the highest degree of success for the lowest investment?
2. The determination of confirming in which functions the company is truly the experts, i.e. where are their core competencies. What functions are critical to operations and strategy? Many companies have focused on becoming expert at functions that are unquestionably important but clearly not crucial to them. The result is a misallocation of their resources which is not only a distraction of time and expertise but also of huge amounts of capital and, ultimately precludes critical focus from mission-critical functions.
3. Determine how to maximize strategic improvement. Company will experience the greatest outsourcing benefits by allowing the outsourcing provider to expand upon the initial services outsourced, thereby progressively re-engineering their processes. By doing so, most companies will exponentially achieve two to five times the benefits (or more), especially in the areas of cost- savings and improved customer satisfaction.
4. The determination of need for a scalable business model. Some traditional companies are entering new business opportunities but are unsure of their needs, the methodology of processes necessary to deliver solutions for those needs or how results will take shape.
5. Set up and agree upon objective performance criteria. Responsibilities should be Delegated to personnel from both the company and the provider and quantified in as much detail as possible in terms of when the process is to be done and by whom. Here, clarity is indispensible.
6. Reach an agreement with the outsourcing provider in regard to implementing management reporting. Those companies who maximize reporting experience most harmonious relationship with the outsourcing provider.
7. Maximize personnel utility. Both individuals from the outsourcing company as well as individuals from the provider should freely share their respective professional expertise and knowledge bases. Both the company and the provider should leverage their respective strengths in terms of personnel supporting the outsourcing effort, the company tapping their in-house people in order to bring the greatest clarity and knowledge to the outsource provider and, conversely, the outsourcer should provide its best individuals suited for the project. The key here is that once the personnel is maximized in terms of their respective utility, both should assist the other in order to maximize project success.

BPO services provide the most proven horizontal offerings that apply to enterprise-wide solutions such as payroll, customer service, order-taking, up-selling, HR services, and a full complement of accounting services. BPO industry-specific services such as enrollment processing; website chat response, website and shopping cart abandonment, 24/7-365 call center support, etc.

For progressive companies, there is no time like the present to assess the opportunities afforded through BPO offerings crafted to meet their specific needs. In a similar fashion as comfort levels with IT outsourcing (ITO) services continues to increase, business organizations should retain the services of reputable BPO providers to accomplish maximum thrust in the transformation of their company effectiveness with the complete understanding that in order to compete effectively and profitably in today's complex and dynamic business environment, the greater exercise of wisdom requires that they adhere to the classic musical admonition to get by with a little help from your friends.

About the Author:
Prior to joining Premier BPO, Inc., N. Reese Bagwell was employed by ClientLogic, Inc. (now Sitel) in the Legal Department. Mr. Bagwell was previously Senior Founding Partner as a trial lawyer with The Bagwell Law Firm. While in private practice, Mr. Bagwell, who obtained his Doctor of Jurisprudence degree at Cumberland School of Law at Samford University, was a life member of the Tennessee Trial Lawyers Association and the Tennessee Association of Criminal Defense Lawyers where he served as President and was admitted to the bars of the State of Tennessee, the United States District Court and the United States Supreme Court. Mr. Bagwell has been Executive Vice President, Administration for Premier since the inception of the company in 2003



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