BPO is not just about cost cutting, there's more! Tuesday, August 3 2004 17:30 Hrs (IST)
Bangalore:
As organisations outsource more business processes, executives are finding they gain more control over capabilities that affect their entire organisation, says a report released by Accenture, a global management consulting, technology services and outsourcing company.
The report 'Control: Getting it and Keeping it in Business Process Outsourcing', found that an overwhelming majority of executives interviewed were pleased to report that their overall level of control actually increased as a result of BPO. In fact, the kind of control these executives got was more powerful than what they initially feared losing, Accenture said in a statement in Bangalore today (August 3, 2004).
Insights from the report were gathered through a number of in-depth interviews with senior executives from public and private organisations who steered BPO relationships in the US, Europe and Asia Pacific, the statement said.
More than two-thirds of the executives interviewed described control as a "very important" or "important" obstacle during the evaluation phase of a BPO deal. These include concerns over losing control of operational performance, personal influence, knowledge and customer relationship, the statement said.
Those who gained better control as a result of BPO found that processes and information within their organisation became much more transparent. Additionally, over a third of the executives agreed that outsourcing allowed them to not only change business direction at a faster and more controlled rate but also supported the acceleration of business growth, it said.
Asia Pacific executives placed high significance on the issue of trust, which is very closely related to control. Over 84 per cent of the executives interviewed in this region specifically cited trust and the Asian way of doing business, built around personal relationships, as a key consideration in any outsourcing relationship. What was evident overall was the desire to find a trustworthy outsourcing partner and the challenge of having to do this without first working together.
Most successful executives go beyond direct, supervisory control mechanisms to help them achieve BPO objectives. They use indirect and enabling controls focused on instilling their provider with the right behaviours, the statement said.
Acenture said it interviewed 38 senior executives in depth. This group included individuals who steer BPO relationships at 27 public and private organisations, involving functions including finance and accounting, human resources, customer service and procurement. Their goals for BPO range from cost-cutting to direct support of corporate strategy. It also includes 11 senior executives who are considering BPO relationships.
Of the total group, 40 per cent are based in the United States or Canada; 30 per cent are based in Europe and another 30 per cent in Asia-Pacific region. Forty per cent are C-level executives, one-quarter are vice presidents and the remainder includes directors, relationship managers and the heads of Government department, the statement said.