Accenture shares 5 BPO tips for effective IT transformation

Accenture has shared 5 BPO tips for effective IT and technology operations. These recommendations are based on an Accenture sponsored study from HfS Research.

The report called BPO on the Brink of a New Generation: Technology Transformation found that concerted action is needed by both enterprise clients and service providers.

Accenture recommendations:

Break away from the labor arbitrage model with automation

BPO clients will eventually see their efficiency gains wither away if they cannot break out of the labor arbitrage model. Automation will provide the bridge between the labor arbitrage past and the state of technology enabled transformation.

Embrace the move to digital

Clients and providers alike should re-think existing processes and remove or replace all analog steps which may currently be eased by technology but which aren’t fundamentally digital in nature.

Improve governance skills

Clients also need to invest in improved governance skills to cover these new capabilities, while many service providers need to invest in the higher caliber talent, analytics capabilities and technology platforms required to create this value.

Invest in technology-centric personnel

Service providers should re-organize around product management and development teams driven by software engineers and supported by business analysts rather than capability teams defined by the geography or broad pools of generalist talent.

CTO should have more voice

The CTO of a BPO service provider needs to have a voice at the leadership table.

To address the shift in buyer expectations and achieve sustainable value beyond cost reduction, both clients and outsourcing providers must embrace comprehensive technology capabilities including automation, analytics, and cloud computing, said Accenture.

The survey is based on inputs from 773 BPO industry stakeholders including enterprise buyers, service providers and advisors.

BPO India

Accenture said two-thirds of the BPO industry remains trapped in engagements focused on cost reduction alone with existing processes simply lifted and shifted from the client to low cost delivery centers.

49 percent of today’s clients expect to undertake a wide-scale transformation of their business processes within the next two years to capture new and more sustainable business outcomes that are enabled by technology.

Six out of ten clients feel their providers are failing to deliver the technology skills and capabilities needed to drive this transformation.

“The HfS report validates that technology-enabled BPO engagements – those we would consider to be high performing – are achieving significantly higher value business outcomes than those focused merely on cost reduction and labor arbitrage,” said Mike Salvino, group chief executive, Business Process Outsourcing at Accenture.

80 percent view their operational performance as quite or highly effective, compared to 65 percent of those who have not technology-enabled their BPO. This demonstrates the impact technology enablement can have in creating a modern service infrastructure, optimized for analytics, offering more standardized processes and workflows, and enabling greater visibility and control for clients.

Fifty-two percent of buyers with technology-enabled BPO are seeing real progress towards shifting away from the “lift and shift” BPO model where the only value metric is based on cost per employee. This is twice the proportion of those clients which haven’t undergone technology-enablement of their BPO processes.

52 percent of the buyers who have undergone a technology transformation can boast much greater effectiveness of process delivery in the cloud, with significantly improved cost, quality, and organizational agility.

Most technology-enabled BPO buyers are achieving real effectiveness in higher value areas, namely new ideas/initiatives (50 percent), analytical insight (45 percent) and even gain sharing with their providers (42 percent).

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