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How Sound is your Cloud Strategy?

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By Mark Atterby

cloud-imageCloud computing is having a dramatic impact on how organisations design and automate their business processes. As more and more business functions are transferred to the cloud, organisations are realising the opportunities to build more agile, flexible and efficient enterprises. This presents BPO providers and their clients a range of benefits as well as challenges.

The cloud is now centre stage in the strategic vision and aspirations of most

According to a recent survey by Oxford Research, collaboration, innovation and improved customer service are valued over increased efficiency and operational savings.

organisations. According to a recent survey by Oxford Research, collaboration, innovation and improved customer service are valued over increased efficiency and operational savings.

Rather than designing business processes based around internal functions and needs, moving applications into the cloud allows business processes to be re-engineered from the perspective of the customer. The flexibility and ease of adding functions, capacity and capability the cloud offers: means companies are more adaptable in meeting the changing needs of customers.

However, as the Oxford Research study points out, this simplicity can also generate unmanageable complexity. The cloud offers a simple way to plug in capabilities on the fly – whether that’s for business analytics, marketing, human resources, etc.  The cloud can magnify the emergence of operational silos, resulting in disjointed processes and procedures between business units as well as IT gaps, glitches, and breakdowns.

Security is one issue that will never go away. Issues around data security and integrating different systems across different companies and vendors can present a range of challenges. Then there are other risk associated questions.

  • What happens if the Internet go down?
  • How financially viable is the provider? What happens if they go broke?

The shift from BPO to BPM

The onward march of cloud computing, robotic automation and analytics will decrease the value proposition of traditional BPO providers, whose main value propositions relies on labour arbitrage. The cloud is encouraging forward thinking providers to shift

The onward march of cloud computing, robotic automation and analytics will decrease the value proposition of traditional BPO providers, whose main value propositions relies on labour arbitrage.

their operations from Business Process Outsourcing (BPO) to Business Process Management, where they partner and collaborate with their clients to drive innovation and raise customer satisfaction.

The increased automation and flexibility provided by the cloud and software robots is eroding the benefits of labour arbitrage. For BPO providers to stay relevant for their clients they need to invest in their systems and technology to offer services based around innovation and improving business processes. Harvey Koeppel defines BPM as:

  • A disciplined framework of principles, methods, tools and practices designed to make enterprise business processes more efficient and effective and to enable the delivery of increased business value.
  • A methodology that is driven by the concepts of continuous quality improvement, based upon constant monitoring and evaluation of outcomes; this is followed by managed enhancements to activities and deliverables to further optimise the results achieved by the next iteration of the process.

The cloud along with mobility, social media and analytics is redefining how businesses promote and deliver their products and services to the market. BPO providers have the opportunity to be at the forefront of this change, but they first need to reinvent themselves and invest in their own systems and technology to make that transition.

BPO providers can be of great assistance in helping their clients move into the cloud, thereby overcoming many of the challenges such as security.
March 7, 2015
Comments
  1. Graeme Gilovitz said on March 11, 2015 9:29 am:

    The real question is how far a BPO will go to really partner with their customer with technology advancements to increase customer experience if it erodes their revenue stream.
    Will it be a push from the customer to the BPO that will move things along?

  2. MarkAtterby said on March 13, 2015 2:15 am:

    Hi Graeme, if they are a traditional BPO provider where it’s about providing bums on seats and their only value proposition is labour arbitrage, they will not offer much if anything at all. The cloud, particularly combined with robotic automation, will erode the value proposition of these providers and hence their revenue. Those who can offer higher value through developing niche and value added services, enabled through the cloud, will have plenty of opportunities. This is about building BPO or any outsourcing relationship on innovation and collaboration. One sector where this is evolving at a rapid rate is in pharmaceuticals and health.
    From what I’ve noticed the push is coming from both sides. For BPOs, which have been traditionally contact centre focused the level of voice work is diminishing in relation to newer channels social media, apps etc. The providers are looking for new revenue streams. And clients are looking for solutions that can add value to their business.

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