Software-led BPO strategy: Innovation Group
Ovum Plc
September 29, 2009 18 Pages - SKU: OV2497366
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The last decade has seen a concerted drive by many IT companies into the business process outsourcing (BPO) market. The large global players have made the most noise around BPO, from hardware and services providers such as IBM and HP through consulting and services companies such as Accenture, ACS and Capgemini to software companies such as SAP and Oracle. These players have made significant investments in building BPO-focused businesses, but this trend does not affect only the top end of the market. Across the US and Europe, many small and medium-sized software and services companies, such as NorthgateArinso, HR Access and BancTec, are also driving further into the BPO market on the back of their IT capabilities.
Innovation Group is a UK-based provider of outsourced claims management software and BPO services. Although smaller than most global BPO vendors, it is notable due to its rapid transformation from a software company into a BPO services provider over the past six years. This report analyses the drivers for Innovation Group’s move into the BPO market, documenting its transformation, highlighting the challenges it has and will continue to face, and assessing its potential for long-term success as it pursues its IT-led BPO strategy.
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- EXECUTIVE SUMMARY
- The Ovum view
- Key messages
- BPO growth investments hinder early benefits
- Software and BPO strengthens business model
- Diversification benefits BPO businesses
- Offshore BPO services would improve margins
- The history of Innovation Group
- Insurance industry ‘solutions’
- Drivers for BPO expansion
- Stabilise, grow and retain
- Financial stability
- Steadying revenues and profits
- The software versus BPO trade-off
- Strategic supplier role
- Innovation Group’s BPO strategy
- Acquisitive transition to BPO
- The repair claims service platform
- Combining IT and BPO
- Ability to define the rules engine
- Potential for outcome-based pricing
- Technology expertise supporting BPO value-add
- Strategic effectiveness
- Overview
- Financial performance
- Share performance
- Competitive positioning
- List of Tables
- Table 1: Significant events in Innovation Group’s business development
- Table 2: Table 2 Innovation Group revenue and profit performance, 2000 to 1H09
- Table 3: Performance comparison of BPO providers, 2008
- List of Figures
- Figure 1: Software versus BPO: the revenue and profit trade-off
- Figure 2: Innovation Group’s revenue mix, 2001 to 2008
- Figure 3: Innovation Group operating profit margin comparison
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