Business Process Outsourcing (BPO)

• Outsourcing often involves the transfer of existing staff, current operating processes and, subject to the service being outsourced, such as IT or facilities and building maintenance, may involve the transfer of assets too.
• You may outsource to one primary supplier (a single source) who runs and manages the end-to-end service and is responsible for co-dependencies and integration.
• Alternatively, where you may need ‘best of breed’ service delivery, you would outsource to multiple suppliers (a multi-source or mixed economy; some may be in-house) where each supplier provides a specific service.
• In this multi-source scenario, it means that you as the client, manages any integration and co-dependencies between each supplier as necessary, for the service to be delivered successfully.

We’ve dealt with optimising over 500 complex supplier relationships. More than 50% of complex supplier relationships experience misunderstandings between client and supplier over your requirements and expectations.

If the right foundations are not in place to drive maximum value, you may experience:

• Additional charges and costs for ‘misunderstood expectations’
• A lack of understanding of contractual roles and responsibilities
• Governance and performance escalation not clearly delineated
• Senior client executives not being clear on their expectations and dynamics of the relationship
• Not enough investment by senior executives in the resourcing or skills of the client supplier management team
• Loss of key in-house expertise to the supplier (inadvertent staff poaching)
• Employee resistance to new working methods from the supplier
• Clashes of culture between client and supplier staff and so forth.
• Read more about the issues faced in the BPO market by reading our analysis of outsourcing over the last 20 years and the current state of play of the outsourcing market.

• When complex/strategic outsourcing works, it works really well. If you have clarity of the business outcomes you wish to achieve, operate in a genuine collaborative manner with appropriate levels of relationship management, contract management and performance management, you’ll often encourage really excellent innovation from your supplier and drive the costs of BAU service delivery down to its most optimum.
• Many challenges exist to put in these collaborative and innovation foundations however. If done well, you can expect driving a much better return on your investment; sometimes reducing your optimum cost base for BAU services by up to 35%. Done badly, without key foundations in place, your BAU services will often end up at lower service levels than you have now, and your costs are likely to escalate and be far more expensive than your current operating costs.
• Don’t end up in this way. Use our ‘Optimise’ method to generate maximum value and the highest market reputation.