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An Extension of Reengineering
Whether or not they're called transformational, BPO contracts typically involve some form of business process reengineering, with or without an offshoring component. And yet traditionally, many deals have failed because of managerial issues, lack of communication, and misunderstandings over how work should be done. Anything that can standardize process can help, although some political issues are inevitable.
"As with other vendors in this sector, we have a Visio-like view into the workflows," says Pegasystems' Deitert. Point-and-click functionality lets users "develop flows, demonstrate to various business stakeholders what they will be, or revise them when necessary without a big, custom coding process with tons of old-school-style integration work." Pegasystems' BPM package includes rules-based workflows and full case management capabilities.
What used to be reserved for in-house operations is now being extended to work with third parties. "Some of the most savvy early adopters of business process management systems for internal operations want use of these tools in BPO deals," Deitert says. "Executives being asked to manage these operations want the clarity they've gained in their own shops."
Innovation and better performance were also mentioned by Manish Motiani, VP of sales for financial services at Patni Computer Systems, a global provider of IT services and business solutions headquartered in Mumbai and London. "As businesses continue to reevaluate their business strategies and cost models, they will leverage new opportunities beyond the tactical functions already explored," observes Motiani. "BPM will help in this, without the traditionally high costs of traditional integration."
New Ways to Do Deals?
Back in 2004 after an 18-month selection process, Hartford, Conn.-based Aetna tapped Pegasystems' PegaHEALTH contact center solution "as part of a corporate-wide initiative to provide easy-to-use tools and resources," according to the Pegasystems Web site.
Aetna, an $18 billion corporation offering healthcare, dental, pharmacy, group life, disability and long-term care benefits, is using the vendor's customer service desktop product in its 40 national contact centers, which serve 590,000 healthcare service providers and 13 million members. The deal is a classic "carve out" of a key, but not yet core, operational area.
Emerging deals may slice and dice the work differently. Software-as-a-service will become more of a feature of BPO deals in the mid-market, according to Dublin-based Research and Markets.
As arrangements between service providers and their clients get more complicated, says Deitert, firms might combine the adoption of cloud-based e-mail and a BPO call-center contract. Mixing and matching so-called "lift outs" of operations and ASP-style adoption of select IT services will require more managerial expertise, as well as greater knowledge on the part of the providers. Customers will look not only for affordability, but also process excellence and fewer unhappy surprises.
After all, value is primarily determined in results. "Basically, firms contracting services with sourcing specialists want to decrease the downside risks," says Saurabh Gupta, BPO analyst with Dallas-based Everest Research Institute. "This will be especially important once everyone gets beyond survival and into a growth mindset."
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