David Poole, Process Protagonist and Prognosticator
Many of you will remember one of the legends of BPO, Deputy David Poole, who’s spent much of his career fighting BPO crime on the streets of Chicago for Capgemini (where he actually rolled up with the job title “Deputy”).
He was also a founding member of PwC’s global BPO business prior to IBM acquiring their operations, having made a significant contribution to the development of the global BPO industry, crafting several major global engagements since the early ‘90s.
David’s thought to have skipped town, after a shootout at the Outcome-based Corral and is rumored to be trawling the streets of London seeking out errant processes in dire need of transformation. In the meantime, we managed to track him down somewhere in the ethernet to share some of his thoughts on where the BPO market is heading.
So without further ado, here’s Part I, where he discusses future of BPO having less to do with outsourcing and much more to do with venturing – a blurring of the lines between the client and the provider…
Venturing – Sharing of risks and rewards between clients and providers
Imagine a World where providers actually put their money where their mouths are. I don’t mean just putting their margins at risk (tied up with so much legal jargon there actually isn’t any risk). I mean really working out the added value they can provide and taking a share of that to create a true win – win. This will be a world where providers will do as much due diligence on their clients as clients do on them to analyse and dig out the true joint opportunity. Sound familiar? Well certainly not in the BPO World we know today, but much more like the venture capital world. In fact, perhaps Business Process Venturing has a nice ring to it?
So far, providers paid by results or so called business outcomes is little more than jargon, and frankly the evidence of this in practice is pretty slim, perhaps with the exception of more knowledge-based and directly financially measurable processes like in collections or procurement. The lucrative BPO market of the past few years has been extremely cosy and risk averse but this is all about to change.
I predict a new breed of deal and provider will emerge in the coming years, sending shivers through the current providers risk management processes but forcing the type of change and commitment to process excellence that the buyers always thought they were getting but in fact were not. I don’t think it’s a bad thing for the providers either because it creates the opportunity for the best ones to truly monetise the return from the investments they have made in processes, analytics, technology and facilities. This is because the overall influence providers will have over the delivery in this much more collaborative environment will be far greater and less bounded by the restrictive contracts we as an industry have over time developed to protect clients from the big bad providers.
Stay tuned for more of Poole’s patter, which pinpoints the potential of virtualized delivery, utility delivery models and the end of consulting as we know it (gasp)…
Posted in : Business Process Outsourcing (BPO), Outsourcing Heros
David,
I couldn’t agree more with this blog. The only way to make future deals truly profitable beyond labor savings is by risk-sharing. The onus has to be on the buyer to trust the provider to being new skills, process knowledge and technologies to the table – and for the provider to deliver them!
Gaurav
Goodbye BPO, long live BPS (Business Partner Sourcing)
This concept of ‘Business Process Venture’ is very interesting. I think it will be all the more relevant in some specific situations such as vertical-based processes that have a huge impact on customer experience (for ex, in Telecom, Insurance, etc.) and, in turn, future growth prospects of the company. Or for a mid-sized organization who is looking to disrupt the market by enhancing own competitiveness with a BPO ‘venture’ in partnership with a vendor that not only help in cost reduction, but also provide additional profits. I’ve seen a few such examples in the Indian context; for ex, Bharti Airtel’s deal with Ericsson and IBM; Yes Bank’s (an Indian private sector bank launched back in 2002-03) deal with HCL; or even HDFC Bank and Barclays investing in Intelenet early on; and ICICI Bank setting up Firstsource. I guess there are some elements of your ideas in these deals.
[…] Part I of Poole’s patter, we heard from BPO veteran David Poole sharing some of his thoughts on […]
great discussion piece David and glad to see you are still sharing innovative ideas in the market. Keep the Capgemini flag flying! all the best Carina
Love the idea of BPV. Someone should call Sir Richard Branson as he would be the kind of guy interested in developing a new business model that will create true value. Phil, maybe you should call him to see what he thinks?
To be successful I think these new providers will have to focus on industry verticals and hiring people with consulting and problem solving skills. I guess this is where all those out of work consultants will be going…
Agree but most of the top providers have been talking about it for some time in various forum. However, no one is really willing to walk the talk and to the large extent it has to do with devils in the detail. This is problem with many good ideas that look unassailable on paper but never gets implemented.
The challenge is most organization deos not even have the internal benchmark data. So, where do you actually start.