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Has BPaaS Finally Come of Age?

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By Martin Conboy 

Businessman accessing modern social networking interfaceEnterprises across the globe are realising the need to embrace cloud technology. Thus, business processes are also being moved to the cloud because of the inflexible service delivery models of traditional BPO, and the old technologies that limit the effectiveness of business process outcomes.

As companies shift to SaaS, on premises – desktop software deployment is declining rapidly, expected to drop from 34 percent to 17 percent by 2017, according to Gartner. However, because of security concerns, organisations are increasing the adoption of private cloud more than public cloud. Experienced BPO providers are navigating this new reality, looking for opportunities to offer organisations BPaaS (Business Process as a Service), RPA and secure private cloud infrastructure.

BPaaS is any type of horizontal or vertical business process that’s delivered based on the cloud services model. It is a sourcing model where buyers receive standardised business process services on a pay-as-you-go basis by accessing a shared set of

MarketsandMarkets forecasts the global BPaaS Market and Cloud BPM will be worth $7.12 billion in 2018. The key forces driving this market forward are the development of automated and software driven outsourcing, growing need for cost effective business processes and the market trend of employing cloud computing technology

resources (people, application, and infrastructure) from a single provider. For example, a company may have a complex process for recruitment automation that it would outsource.

BPaaS services allow you to experiment with new business process ideas because they’re not based on programming each individual business initiative. For example, a packaged BPaaS offering that handles business travel processing or order-to-cash processes may be available, as well as other services that will handle load processing or payroll services, and predesigned services useful for everything from processing claims to managing clinical data for drug trials.

Strong market growth predicted

MarketsandMarkets forecasts the global BPaaS Market and Cloud BPM will be worth $7.12 billion in 2018. The key forces driving this market forward are the development of automated and software driven outsourcing, growing need for cost effective business processes and the market trend of employing cloud computing technology.

The research highlights that the adoption of these solutions has been relatively slow due to the cautious approach of senior management and compliance concerns. However, these solutions are now experiencing continual growth with expanding

The difference between traditional packaged applications and BPaaS is that BPaaS is designed to be service-oriented.

penetration across all major verticals.

Why BPaaS?

BPO’s traditional value proposition was the ability to reduce costs at the operational level through labour arbitrage. Buyers are increasingly evaluating operational, business application and technology infrastructure costs in a more integrated approach.

The difference between traditional packaged applications and BPaaS is that BPaaS is designed to be service-oriented. So, BPaaS is likely to have well-defined interfaces. In addition, a BPaaS is a standardised service for use by many different organizations. Because these services are much more optimized to deliver a service consistently, they can leverage automation, standardisation, and repeatability in the way the services are used and delivered.

BPaaS is radically different to traditional outsourcing models. BPaaS aims to integrate the value extracted from traditional labour arbitrage with the Software-as-a-Service (SaaS) concept at the business application layer, and Infrastructure-as-a-Service (IaaS) construct at the technology infrastructure layer in an integrated manner.

The growing demand for automation and virtualisation of workplace[i] makes these solutions very desirable, particularly for organisations with a global footprint.

BPaaS offers organisations increased agility of their business processes while keeping costs down. It provides organisations with access to critical technology and the service resources required to implement, deploy, train, and manage the critical technology without the huge capital expenditure.

The following characteristics define BPaaS:

  • The BPaaS sits on top of the other three foundational cloud services: SaaS, PaaS, and IaaS.
  • A BPaaS service is configurable based on the process being designed.
  • A BPaaS service must have well-defined APIs so it can be easily connected to related services.
  • A BPaaS must be able to support multiple languages and multiple deployment environments because a business cannot predict how a business process will be leveraged in the future.

A BPaaS environment must be able to handle massive scaling. The service must be able to go from managing a few processes for a couple of customers to being able to support hundreds if not thousands of customers and processes. The service accomplishes that objective by optimizing the underlying cloud services to support this type of elasticity and scaling.

Who’s who in BPaaS

Here’s a list of companies in this field and the business processes they deliver:

  • eBay: Provides an electronic auction service
  • PayPal: Provides an Internet payment capability as a service
  • Skype: Owned by Microsoft, Skype provides Voice over IP (VoIP) telephone calls as a service, most of which are free
  • Google: Provides an Internet search capability as a service
  • This service is free when you have access to the Internet. Google also provides an Internet e-mail service, Gmail. Google has quite a few other services, including maps, news aggregation, Google Apps, and so on.
  • YouTube: Provides video self-publishing as a service and was acquired by Google
  • Yahoo!: Like Google, Yahoo! provides an Internet search service and e-mail service
  • MailChimp and Constant Contact: Provide services for sending out online newsletters and marketing campaigns
  • Craigslist: Offers small ads as a service
  • WordPress: Hosts blogs as a service
  • LinkedIn: Offers business contacts and networking as a service

Facebook and Twitter: Provide social networking services that have a huge reach across the globe

[i] http://www.marketsandmarkets.com/PressReleases/business-process-as-a-service-bpaas.asp.
April 28, 2015
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