|By Clinton Jones||
|July 25, 2012 04:06 PM EDT||
Business process outsourcing (BPO) of shared services centers (SSC) is not really something new, but lately BPOs and SSCs have become particularly popular as discussion topics in large organizations with complex and simple business processes.
In reality, the BPO function is nothing more than the contracting of specific business tasks, typically back office business tasks, to a 3rd party service provider. Companies like a payroll bureau and recruitment agencies have been effectively performing these kinds of services for decades. In the late 1990's improvements in computing technology, the internet and global communications allowed an explosion in outsourced customer services centers. This in turn led to an increased focus in businesses not just looking at the BPO function but also in the breaking down of traditional organizational processing silos and the creation of aggregated back-office functions in the form of shared services centers.
Lately there has been a large amount of business and research focus on the optimal combinations of outsourced processes and shared services and some of the trends in this area. Of particular interest was the recent Deloitte Consulting 2011 Global Shared Services Survey. InformationWeek's Chris Murphy says "Business Process Outsourcing (BPO) is the fastest growing worldwide outsourced market segment". According to analyst firm NelsonHall, the global BPO market valued €217.8 billion in 2007 and is expected to reach €323.6 billion in 2011, showing an average growth rate of 10% per year.
BPO is catching up with industries like medical transcription services that have effectively provided a BPO service for more than a decade. Moreover, it is not just India or the Philippines that are booming with BPO services; Central & Eastern Europe are aggressively chasing near-shore outsourcing for Europe and the North America.
A 2005 combined study by InformationWeek magazine and EquaTerra, an outsourcing advisory services firm, showed that 73% of BPO customers surveyed believe BPO improves processes, demonstrating that principal drivers for BPO are efficiency and effectiveness.
With median revenue of $12bn among the Deloitte survey respondents, shared service centres were identified as largely distributed between APAC, LATAM, Western Europe and North America. Roughly half of all SSC's being based in North America (29%) and Western Europe (23%). Many of these organizations (38%) operated out of just one SSC and 71% operated with three or less. However as the size of the organization grows, the trend is for the number of SSC's to increase with companies with revenue of $25b or more, having on average 4.3 SSC's.
Key drivers for SSC selection unsurprisingly focus on quality, ramp-up-time, labour costs and language. Unsurprisingly, relatively unimportant factors were physical proximity to operations and HQ, regulation riskiness and sustainability. The U.S. has the most well-established Shared Services market with over 44% of all centers that are over 10 years old. 51% of SSC's support only 1 language. The U.S. also has the highest concentration of multi-language centers serving multiple continents.
In terms of the costing profile for SSC's since 1999 at least, services charged based on volume continue to be the primary chargeback model used by respondents. The respondents cited that the primary modes for effective management were site visits, leadership meetings, SLA's and continuous improvement initiatives.
Probably the most important discoveries were that the bulk of SSC activities are centered on financial operations (93%), human resources (60%) and IT (48%). 53% of respondents only serviced one process area with a SSC. In the financial processes space, 84% of respondents indicated that they handled AP processing, 72% Fixed Assets and General Accounting and 70% Travel and Expense management. In human resources, almost half were running payroll and time administration (40%) out of the SSC, 36% Employee Data administration and 33% benefits administration.
Of all the SSC respondents, 87% indicated that workflow was important to effective operations, with 67% already having workflow in place. Electronic Document Management was considered important by 88% with 52% already having EDM in place. Although relatively low in the adoption stakes, Vendor Self Service featured as important to 65% of respondents with 1 in 4 already having a vendor self-service solution in place. There was over a 35% increase in respondents that have implemented workflow and call center since the 2005 survey.
Timeliness of response to requests was stated as a key driver for 96% of respondents and that measurement was being driven by process based KPI's it is unsurprising then that products like Winshuttle Workflow are focal to BPO's in ensuring SSC performance optimization and effectiveness. For 91% of the respondents, SSC's resulted in cost reductions and for 85% levels of control increased with 87% reporting that they saw process efficiency.
In order to deliver services with quality and stability, BPO providers have to have a service methodology, and the requisite infrastructure, people and reporting metrics capabilities. Leveraging technological and communication advances are the fundamental factors that lead to the success for Business Process Outsourcing. The internet and the low cost of data and voice communication, in addition to the move to standardized applications, flexible IT platforms, and more integrated systems give BPOs the tools needed to advance and spread. Adoption of technologies like Workflow and collaborative solutions built on SharePoint reduces operational risk, increase accessibility and transparency, all the while improving process quality and lowering costs
When considered collectively, SSC's combined with BPO's seem to suggest a perfect opportunity for cost savings and business process optimization. When a business shifts SSC operations to a BPO the Terra survey indicated that 53% felt that they were able to focus their attention on more critical business issues than daily data processing. In addition, using a BPO meant that businesses could be assured of a more predictable (45%) and reduced (44%) operational cost structure for back office data processing.
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
Jan. 24, 2017 07:45 AM EST Reads: 3,917
Creating replica copies to tolerate a certain number of failures is easy, but very expensive at cloud-scale. Conventional RAID has lower overhead, but it is limited in the number of failures it can tolerate. And the management is like herding cats (overseeing capacity, rebuilds, migrations, and degraded performance). In his general session at 18th Cloud Expo, Scott Cleland, Senior Director of Product Marketing for the HGST Cloud Infrastructure Business Unit, discussed how a new approach is neces...
Jan. 24, 2017 07:45 AM EST Reads: 4,548
DevOps tends to focus on the relationship between Dev and Ops, putting an emphasis on the ops and application infrastructure. But that’s changing with microservices architectures. In her session at DevOps Summit, Lori MacVittie, Evangelist for F5 Networks, will focus on how microservices are changing the underlying architectures needed to scale, secure and deliver applications based on highly distributed (micro) services and why that means an expansion into “the network” for DevOps.
Jan. 24, 2017 06:45 AM EST Reads: 5,734
In his session at 19th Cloud Expo, Claude Remillard, Principal Program Manager in Developer Division at Microsoft, contrasted how his team used config as code and immutable patterns for continuous delivery of microservices and apps to the cloud. He showed how the immutable patterns helps developers do away with most of the complexity of config as code-enabling scenarios such as rollback, zero downtime upgrades with far greater simplicity. He also demoed building immutable pipelines in the cloud ...
Jan. 24, 2017 06:45 AM EST Reads: 3,627
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new da...
Jan. 24, 2017 06:45 AM EST Reads: 6,887
@DevOpsSummit at Cloud taking place June 6-8, 2017, at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long developm...
Jan. 24, 2017 06:30 AM EST Reads: 3,657
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
Jan. 24, 2017 05:00 AM EST Reads: 3,111
The security needs of IoT environments require a strong, proven approach to maintain security, trust and privacy in their ecosystem. Assurance and protection of device identity, secure data encryption and authentication are the key security challenges organizations are trying to address when integrating IoT devices. This holds true for IoT applications in a wide range of industries, for example, healthcare, consumer devices, and manufacturing. In his session at @ThingsExpo, Lancen LaChance, vic...
Jan. 24, 2017 04:00 AM EST Reads: 6,694
While many government agencies have embraced the idea of employing cloud computing as a tool for increasing the efficiency and flexibility of IT, many still struggle with large scale adoption. The challenge is mainly attributed to the federated structure of these agencies as well as the immaturity of brokerage and governance tools and models. Initiatives like FedRAMP are a great first step toward solving many of these challenges but there are a lot of unknowns that are yet to be tackled. In hi...
Jan. 24, 2017 02:45 AM EST Reads: 3,949
Who are you? How do you introduce yourself? Do you use a name, or do you greet a friend by the last four digits of his social security number? Assuming you don’t, why are we content to associate our identity with 10 random digits assigned by our phone company? Identity is an issue that affects everyone, but as individuals we don’t spend a lot of time thinking about it. In his session at @ThingsExpo, Ben Klang, Founder & President of Mojo Lingo, discussed the impact of technology on identity. Sho...
Jan. 24, 2017 02:30 AM EST Reads: 4,276
What are the new priorities for the connected business? First: businesses need to think differently about the types of connections they will need to make – these span well beyond the traditional app to app into more modern forms of integration including SaaS integrations, mobile integrations, APIs, device integration and Big Data integration. It’s important these are unified together vs. doing them all piecemeal. Second, these types of connections need to be simple to design, adapt and configure...
Jan. 24, 2017 02:00 AM EST Reads: 1,945
"Splunk basically takes machine data and we make it usable, valuable and accessible for everyone. The way that plays in DevOps is - we need to make data-driven decisions to delivering applications," explained Andi Mann, Chief Technology Advocate at Splunk and @DevOpsSummit Conference Chair, in this SYS-CON.tv interview at @DevOpsSummit at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Jan. 24, 2017 01:45 AM EST Reads: 2,268
"Logz.io is a log analytics platform. We offer the ELK stack, which is the most common log analytics platform in the world. We offer it as a cloud service," explained Tomer Levy, co-founder and CEO of Logz.io, in this SYS-CON.tv interview at DevOps Summit, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
Jan. 24, 2017 01:15 AM EST Reads: 6,460
WebRTC is about the data channel as much as about video and audio conferencing. However, basically all commercial WebRTC applications have been built with a focus on audio and video. The handling of “data” has been limited to text chat and file download – all other data sharing seems to end with screensharing. What is holding back a more intensive use of peer-to-peer data? In her session at @ThingsExpo, Dr Silvia Pfeiffer, WebRTC Applications Team Lead at National ICT Australia, looked at differ...
Jan. 24, 2017 12:30 AM EST Reads: 5,130
"ReadyTalk is an audio and web video conferencing provider. We've really come to embrace WebRTC as the platform for our future of technology," explained Dan Cunningham, CTO of ReadyTalk, in this SYS-CON.tv interview at WebRTC Summit at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Jan. 24, 2017 12:30 AM EST Reads: 2,385
A critical component of any IoT project is what to do with all the data being generated. This data needs to be captured, processed, structured, and stored in a way to facilitate different kinds of queries. Traditional data warehouse and analytical systems are mature technologies that can be used to handle certain kinds of queries, but they are not always well suited to many problems, particularly when there is a need for real-time insights.
Jan. 24, 2017 12:30 AM EST Reads: 6,445
In his General Session at 16th Cloud Expo, David Shacochis, host of The Hybrid IT Files podcast and Vice President at CenturyLink, investigated three key trends of the “gigabit economy" though the story of a Fortune 500 communications company in transformation. Narrating how multi-modal hybrid IT, service automation, and agile delivery all intersect, he will cover the role of storytelling and empathy in achieving strategic alignment between the enterprise and its information technology.
Jan. 24, 2017 12:15 AM EST Reads: 4,782
Hardware virtualization and cloud computing allowed us to increase resource utilization and increase our flexibility to respond to business demand. Docker Containers are the next quantum leap - Are they?! Databases always represented an additional set of challenges unique to running workloads requiring a maximum of I/O, network, CPU resources combined with data locality.
Jan. 24, 2017 12:15 AM EST Reads: 1,014
Growth hacking is common for startups to make unheard-of progress in building their business. Career Hacks can help Geek Girls and those who support them (yes, that's you too, Dad!) to excel in this typically male-dominated world. Get ready to learn the facts: Is there a bias against women in the tech / developer communities? Why are women 50% of the workforce, but hold only 24% of the STEM or IT positions? Some beginnings of what to do about it! In her Day 2 Keynote at 17th Cloud Expo, Sandy Ca...
Jan. 24, 2017 12:00 AM EST Reads: 7,978
In his session at DevOps Summit, Tapabrata Pal, Director of Enterprise Architecture at Capital One, will tell a story about how Capital One has embraced Agile and DevOps Security practices across the Enterprise – driven by Enterprise Architecture; bringing in Development, Operations and Information Security organizations together. Capital Ones DevOpsSec practice is based upon three "pillars" – Shift-Left, Automate Everything, Dashboard Everything. Within about three years, from 100% waterfall, C...
Jan. 23, 2017 11:15 PM EST Reads: 10,089