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“When You Come to a Fork in the Road, Take It” – The Future of ITO and BPO

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By Craig Stevens.

when-roadOne of the world’s greatest philosopher’s and Hall of Fame baseball player, Yogi Berra, came up with this article’s basic concept many years ago. In one of his autobiographies Yogi openly said his thoughts were not meant to be insightful at all, they were basic answers to simple questions such as how do you like to get paid to which he responded, “I like getting paid in cash, that is almost as good as money.”

OK, so he may not be providing Confucius level intellect, but Yogi-isms are definitely thought provoking. I was reminded of this when considering the major decisions that both service providers and their clients must make in the near future for ITO and BPO related services as they are facing a definite fork in the road.

For years the industry has seen a commoditisation of ITO and BPO services. Even Wikipedia now states how most vendors are very similar and use price and location being their key differentiators. This is not new news as most have seen this trend for years.

But many are beginning to notice an entirely different path an organisation can take. In a recent book entitled “The Quantum Age of IT” by Charles Araujo, the first words stated in the introduction were “IT as we know it is dead.” If that is not a tough way to start a book and grab someone’s attention then I do not know what is. Although his book was obviously intended to be for IT, its concepts and ramifications closely mirror that of business process as well – especially given the intertwining aspects of business, process, and technology. Paraphrasing Charles’ concepts, the growth of these functions has gone something like this:

  • The IT, customer service and client support functions were never really created, that they simply have evolved over time
  • As time has gone on, natural silos were created based on specialisation
  • This has led to divided cultures within organisations as frequently diverging and often conflicting goals exist and often those involved do not understand the needs or concepts of others
  • As today’s issues become more and more complex, the basis for these divides has broken down, become fractured and has become a source of frustration as cultural norms often are in conflict in reality of situations

The reasons for this change are extreme and range from things like ongoing globalisation of businesses, cloud computing, social networking, infrastructure modifications, time to market issues to much more.

But how does this change effect ITO and BPO functions and what is the fork in the road? The answer is simple. Changes within an organisation’s operational support structure will change how those who support the functions operate. The existing structure has led to years of the consumerisation of ITO and BPO services and has driven those services to becoming more of a commodity than a value add for most buying organisations.

So the fork in the road now being faced for those using or considering using those services is:

  • Have service providers continue operating in more of a commodity based environment where the primary goal is driving for lower direct service costs
  • Alter the existing structure altogether to provide a unique environment enabling the creation of higher value returns

Like choosing to shop at Macy’s or Walmart, there really is no right or wrong answer to this question. No single solution is necessarily the right fit for every organisation, and there can be different solutions incorporated within a single organisation (shopping for clothes at Macy’s and household supplies at Walmart).

The main point though is to be aware that the fork in the road does exist today and organisations have a choice to make. If a business is based on providing high value, looks at itself as innovative, wants to provide high quality customer experiences and new technologies, then most likely it needs to make dramatic changes in how the firm selects, manages and works with its service providers to meet those goals. Charles states that this is a basic choice between being a “strategic innovator” to being a “strategic sourcer”.

If a company does decide to change its path to be more of a strategic innovator, one will need to implement key traits within their company so that it will become:

  • A learning organisation – being action oriented and realising everything is interconnected
  • A disciplined organisation – acting in a controlled and consistent fashion but not simply following rules, even in challenging circumstances
  • A transparent organization – showing all choices and options
  • An intimate organisation – having everyone listen to and use three key ingredients; humility, vulnerability and time
  • A dynamic organization – brings together the other four traits in a cohesive and timely manner to change the fundamental posture of an organisation.

To succeed in using these traits, an organisation must execute an organisational change program that creates shared aspirational vision, avoids being “touchy-feely”, focuses on the “what” and offers teams the “freedom to fail”. Making a decision is rarely easy, especially one that may involve core changes.

There is a major fork in the road….are you going to take it?


October 14, 2014
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