{"id":1661,"date":"2010-06-15T05:50:00","date_gmt":"2010-06-15T05:50:00","guid":{"rendered":"http:\/\/localhost\/projects\/horsesforsources\/innovation-purgatory-iii-061510\/"},"modified":"2010-06-15T05:50:00","modified_gmt":"2010-06-15T05:50:00","slug":"innovation-purgatory-iii-061510","status":"publish","type":"post","link":"https:\/\/www.horsesforsources.com\/innovation-purgatory-iii-061510\/","title":{"rendered":"Innovation in BPO purgatory, Part III: the escape route"},"content":{"rendered":"
\"\"<\/p>\n

Now there's some significant innovation potential…<\/p>\n<\/div>\n

When it comes to achieving\u00a0innovation when outsourcing, buyers need to identify where real innovation is possible<\/em>, and where they\u00a0only really\u00a0need operational efficiency.<\/strong>\u00a0\u00a0<\/p>\n

Innovation is about deploying creative and unique methods to drive new productivity or top line growth into the company.\u00a0\u00a0In reality,\u00a0some processes have that potential, while others, quite frankly, only offer a means to an end.\u00a0\u00a0<\/p>\n

Our new innovation\u00a0study, conducted in conjunction with our BPO networking partner, the Shared Services & Outsourcing Network<\/a>, reveals some staggering results from 136 senior BPO buyers, when we asked them where they were achieving significant innovation today, and where they saw the potential to achieving significant innovation within a two-year time frame:\u00a0<\/p>\n

\"\"<\/a><\/p>\n

Determine the\u00a0ceiling of innovation value<\/strong>\u00a0<\/p>\n

This data reveals an awful lot about outsourcing today.\u00a0 Essentially, most business processes can be improved to a certain extent when they are outsourced, whether it be through better workflows, application of new technology, and domain knowledge from experts.\u00a0 And most buyers today still feel most –\u00a0or all – of\u00a0their outsourced processes can benefit from further innovation.\u00a0<\/p>\n

However, some processes clearly have a ceiling of innovation value <\/em>that can be attained, which is where the move towards standardization comes into play.\u00a0 For example, once you’ve got a benefits or payroll solution that\u00a0delivers the required functionality, is delivered via a hosted \/ SaaS model, and the provider has the costs and service quality\u00a0performing\u00a0to an acceptable level, is there really a whole lot more value<\/em> your business can gain from them, to increase productivity further and drive new top-line growth?\u00a0 Cloud Computing and SaaS\u00a0can further\u00a0help drive down the operating costs and optimization of\u00a0delivery, but once you’re happy with the processes and the service, that may be the limit of future innovative value<\/em> that you can expect to attain.\u00a0<\/p>\n

Pinpoint where future growth and productivity can be attained with a BPO provider<\/strong>\u00a0<\/p>\n

Where there is significant opportunity to achieve innovation, is where there is significant room to improve process flows, add domain knowledge, creativity and technology into the mix to achieve impactful business outcomes.\u00a0 This is especially prevalent with those processes that are often a long way from standardization, and can benefit from consultative business partners to develop a specific innovation agenda (see Part II<\/a>).\u00a0 Analytics innovation clearly\u00a0represents a\u00a0major opportunity for providers and buyers to work together to make better use of information to drive results, in a cost-efficient manner.\u00a0 It also encompasses a much\u00a0greater need for\u00a0consultative support from the provider.\u00a0 And it’s the same story as you go through those processes where the innovation opportunity is significant, for example,\u00a0P2P (massive productivity and cash flow); supply chain (driving product to market quicker); customer–care (driving new income), recruiting (reducing time-to-hire and improving talent selection), and so on.\u00a0 Each innovation gap tells a story of where the future value lies.\u00a0<\/p>\n

The HfS Viewpoint: The key lies in determining\u00a0 and achieving the right balance between operational efficiency and innovative value.\u00a0 Both are crucial.<\/em><\/strong>\u00a0<\/span><\/span>\u00a0<\/p>\n

That means, when selecting BPO partners to drive new business value,\u00a0buyers need to focus on identifying\u00a0which ones can\u00a0genuinely\u00a0help\u00a0them innovate, versus\u00a0those who can\u00a0keep the machine cranking.\u00a0 In most cases today,\u00a0buyers are increasingly finding\u00a0they can source to multiple BPO and consulting\u00a0partners –\u00a0those to help\u00a0them innovate in processes that have real value-potential, and those which can keep the costs down and the operations functioning.\u00a0 Many buyers today with some BPO experience, are now seriously considering adding more competitiveness to their provider mix to get more creative value.\u00a0<\/p>\n

On the flip-side, providers need to determine where they add the most value.\u00a0 For example, ADP has the lion’s share of the managed payroll business – so does it need to broaden beyond that into adjacent processes, for example P2P,\u00a0that requires greater innovative and consultative support?\u00a0 Cognizant\u00a0has a strong\u00a0portfolio of industry-specific offerings in\u00a0verticals such as life sciences and banking – does it need to broaden more aggressively into more horizontal processes, such as\u00a0F&A\u00a0or procurement?\u00a0 Accenture and IBM have strong offerings across many of these processes, so where\u00a0should they choose to invest more of their resources in a tightening market?\u00a0<\/p>\n

Buyers and providers need to work out a game-plan whereupon they determine what innovation is possible,\u00a0and how it needs to be achieved.\u00a0 Some\u00a0buyers feel they don’t need a hell of a lot of innovation, and some providers are happy delivering standard services with little innovation impetus, beyond a few basic requirements.\u00a0 In the future, we’ll be drawing up\u00a0illustrations of the innovators and the operational players.\u00a0 There is room for both – the key is to determine how much focus<\/em> to put into each area.\u00a0<\/p>\n

All-in-all:\u00a0 Both buyers and providers need to be honest with themselves to determine whether they are truly prepared to invest in either achieving or delivering innovation.\u00a0 If not, stick to being operationally efficient and stop talking about an innovation game-plan that will never happen.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Now there's some significant innovation potential… When it comes to achieving\u00a0innovation when outsourcing, buyers need to identify where real innovation…<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,51,835,61,64,79,838,836,91,832,830],"tags":[442],"organization":[],"ppma_author":[19],"class_list":["post-1661","post","type-post","status-publish","format-standard","hentry","category-business-process-outsourcing-bpo","category-cloud-computing","category-f-a","category-financial-services-sourcing-strategies","category-healthcare-and-outsourcing","category-hr-outsourcing","category-kpo-analytics","category-procurement-engineering-supply-chain-outsourcing","category-saas","category-sourcing-best-practises","category-sourcing-change","tag-innovation"],"yoast_head":"\nInnovation in BPO purgatory, Part III: the escape route - Horses for Sources | No Boundaries<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.horsesforsources.com\/innovation-purgatory-iii-061510\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Innovation in BPO purgatory, Part III: the escape route - 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