Why 3 out of 5 Global Business Service Operations are Actively Outsourcing
Business process outsourcing, or BPO, is a crucial subject for Global Business Services (GBS), but sadly, it runs the risk of being underappreciated. Although many GBS discussions over the past ten years have focused on optimization, process improvement, and automation, we may have forgotten the fundamental truth that three out of five GBS still actively outsource.
BPO service providers have risen up the value chain and into many different functions in the previous ten years, including finance, supply chain, HR, and IT. Many service providers have raised the bar recently. Therein lies a chance for organizations to win. Modern BPOs are professionals at what they do. They provide GBS enterprises with access to the tools and technologies they need to seamlessly outsource, as well as the best in class business process management capabilities.
Choosing the Right BPO Service Provider is Essential
It is crucial to choose a service provider who has extensive understanding and expertise about your function. This choice presents a number of options for the vast majority of enterprises.
The following three steps concentrate on the fundamentals of finding BPO partners:
Knowledge and Expertise
Several businesses place a strong emphasis on hiring service providers with years of experience and specialized knowledge in their field, such as finance. This has to be highlighted.
Businesses are increasingly attempting to get an edge by forming alliances with BPO to implement technology. Examining what this can accomplish for your companies can open up a world of opportunity.
The final consideration is the economics of outsourcing from a business standpoint. One of the main factors is how this fits into the budget of the company.
With all the Available Options for Automation, Where Does an Outsourcer Fit into Today’s Sourcing Decisions?
While making BPO decisions, nearly 50% of firms begin by considering cost reduction. When you consider outsourcing in general for shared services and GBS, you can see how value is realized as the business grows over time. Organizations have recently seen that analytics, automation, and the usage of process engines provide value, allowing for much more work to be done with fewer people and hours, as well as improved time zone integration.
The automated processes in use are frequently created by the outsourced service providers themselves. The appropriate automation engines and associated technology are brought in. Robotic process automation (RPA), which automates repetitive tasks that drain the human resource pool, can dynamically increase corporate performance. Nevertheless, organizational-wide RPA implementations can be quite challenging, and this is where BPOs will continue to be important.
Captive vs Outsourced BPO Model
In a recent survey, it was shown that 80% of those asked to choose between an outsourced and captive model believed the former offered greater advantages. Just 20% of respondents believed outsourcing has more advantages. Overall, the poll suggests that businesses intend to outsource more. Currently, 35% of the market is entirely captive, but in three years, that percentage will drop to 25%. The data shows that, despite the notion that a captive model offers more benefits, shared services and GBS really outsource a lot of work.