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BPaaS: A flexible and versatile alternative

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By Martin Conboy

bpaasCloud technology is having a dramatic impact on the BPO and Shared Services space and the provision of outsourcing services. It has allowed for the emergence of what’s termed BPaaS (Business Process as a Service). BPaaS eliminates the need for infrastructure and significant initial investment, making outsourcing more accessible to many more organisations.

Offering a level of flexibility and scalability, not available with most traditional outsourcing models, it allows providers to develop more tailored and differentiated services to exploit niches within different markets.

Business Process as a Service (BPaaS) refers to any situation where a business process is delivered via a cloud services model. These services include Software as a Service (Saas), Platform as a Service (Paas), and Infrastructure as a Service(Iaas). Gartner Defines defines business process as a service (BPaaS) as:

The delivery of business process outsourcing (BPO) services that are sourced from the cloud and constructed for multi-tenancy. Services are often automated, and where human process actors are required, there is no overtly dedicated labor pool per client. The pricing models are consumption-based or subscription-based commercial terms. As a cloud service, the BPaaS model is accessed via Internet-based technologies.

With a slightly different view the Everest Group defines it as:

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.

Organisations have been automating business processes for decades. In the beginning companies would develop their own computer programs and software. Then the packaged software market emerged, where companies would buy a standard software package from a vendor and modify it to meet their needs. To run this software they are still required to invest in their own servers and infrastructure to deliver the applications to the users within the organisation.

The evolution of SaaS cloud services, meant that companies didn’t have to invest as much in their technology and infrastructure, where the applications are delivered to users via the Internet. Like cloud services, business processes are being designed as a package offering that can be delivered via the Internet.

Business processes are the steps an organisation takes to deliver products and services to its customers. These processes can be any general service that can be automated like managing emails, processing credit cards, purchasing or shipment.  Or it can be industry specific like processing a mortgage loan, insurance renewal, or back of house recruitment administration.

It allows an organisation to pick and choose what processes it wants automated as and when it needs them.

BPaas is a game changer

 

As the BPO market continues to evolve, buyers are increasingly expecting more flexible and tailored offerings to meet their individual needs. Businesses that leverage traditional outsourcing deals are looking to move off of inflexible contract and delivery structures.

As highlighted in my article last week providers are finding it more difficult to find new enterprise clients with their traditional offerings. BPaaS allows vendors to scale their service offerings and provide value above and beyond labour arbitrage.

The foundations that built and supported outsourcing in the past are under severe pressure. Labour arbitrage, old technologies, and traditional business and pricing models are limiting the effectiveness of outsourcing relations. The market is looking for more flexible, innovative, and customised solutions.

While outsourcing isn’t right for every organisation, it is an option that should be considered and  evaluated by managers on a periodic basis. Studies show significant cost and strategic benefits, including:

• Reallocation of staff for concentrated focus on content development and program management.

• Enabling learning executives and staff to spend more time with line managers and field operations.

• Freeing resources for measurement, evaluation and overall operational and quality improvement in training programs.

• Greater flexibility and responsiveness to meet business demands.

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September 9, 2014
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