Informed consent: how to use BPO effectively
Ovum Plc
June 30, 2009 16 Pages - SKU: OV2391728
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| This report serves as a guide to client organisations interested in understanding key strategic issues in business process outsourcing (BPO). It details current BPO strategy trends, recommendations and best practices.
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- Executive summary
- In a nutshell
- BPO market overview
- Defining the IT-led BPO market
- A new era in BPO
- Understanding BPO, governance and trust
- Generating client savings from BPO
- How the savings stack up
- Labour arbitrage (offshoring) is the low-hanging fruit
- Global sourcing: which country to choose?
- IT efficiencies not so clear-cut
- The BPO business model
- Suppliers must have a sustainable model
- Simple economies of scale not a main driver
- Contracts have to stand on their own feet
- Phasing of a BPO contract
- Funding ongoing savings from day one
- Shorter, simpler transitions boost profit
- Smaller deals; phased improvements
- Labour versus IT efficiencies
- Providers shy away from large-scale IT transformation
- Labour arbitrage is preferred for initial savings
- IT expertise is important for ongoing savings
- Strategic considerations in BPO
- Not about core or non-core
- The devil is in the detail
- Understanding pricing
- Understanding a transaction
- Unit- and step-pricing
- Breaking the link from cost and price
- Joint ventures
- Sharing risk and reward
- Joint ventures are not service providers’ preferred model
- Relationship management
- Measuring performance: outcomes and SLAs
- Focusing on outcomes: balancing control, openness and flexibility
- The outcome-based reverse pyramid
- Collaborative governance
- Strategic relationship through collaborative governance
- Identifying and dealing with risks and opportunities
- Keep the contract in the drawer, but the relationship fresh
- Governance costs, but fosters trust
- List of Figures
- Figure 1: Potential labour efficiencies versus IT efficiencies in BPO
- Figure 2: Typical BPO contract: cost versus price profile
- Figure 3: The reverse pyramid in outcome-based BPO
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