By Mike Salvino
Digital technology has transformed virtually every industry, affecting the way companies serve customers, manufacture products, interact with stakeholders, manage operations and engage their workforce. Here Mike Salvino illustrates the necessity of incorporating this transformation into business process outsourcing in order to create more value.
Yet, at a time when the majority of the business world has rapidly embraced the digital revolution, most business process outsourcing (BPO) engagements continue to exist in an environment of low expectations when it comes to technology innovation and, as such, are not delivering the kind of value they should. In fact, according to Accenture-sponsored research from HfS Research, two-thirds of the buyers surveyed describe their current engagements as mainly “lift and shift,” where existing processes are merely transferred to an external provider to reduce cost, with limited business transformation involved.[ms-protect-content id=”9932″]
On the bright side, half of the respondents said they expect to undertake a wide-scale transformation in their business processes within the next two years through the greater use of technology. This constitutes an important call to action for companies looking to realise the full potential of their outsourcing engagements.
The research revealed that buyers view effective analytics solutions as the most critical component to making the move to value beyond cost. This isn’t a surprise given the rise in recent years of “big data” and the insights and business outcomes that analytics capabilities can deliver.
Automation was viewed as the next most important technology. When automation becomes part of the delivery of business process outsourcing services it can cut costs and errors and enhance compliance by reducing human interventions. It removes employees from many mundane and unsatisfying tasks, enabling them to focus on higher value, more strategic work. This not only increases employee engagement and stimulates innovation but also helps eliminate unintended mistakes and delays. Ultimately, the idea is that technologies will function autonomously — learning, predicting, monitoring and optimising with minimal human intervention required — while employees are able to concentrate on the creative and value-generating aspects of their jobs.
Cloud, mobile and social technologies are also important to the success of digital businesses, but they are not often leveraged in BPO engagements — at least not yet. More than half of buyers say their provider is not currently leveraging the cloud to deliver services but more than three quarters believe cloud technologies will be increasingly important in the future. Similarly, just over half see extending business processes to mobile access points as critically or very important now, yet 80 percent believe in its future significance. As far as social technologies, even though only about one in three currently see value in their application, that number nearly doubles when asked to gauge their importance in coming years.
So how can BPO buyers and providers get from here to there? The good news is that those who have made this leap are using technology to achieve significantly greater value. They’re optimising analytics, automating processes and workflows, processing in the cloud, and taking advantage of mobility.
These technologies can be integrated into operations to drive innovation and improve business value by addressing these four components:
• A resilient digital platform. At the heart of the new digital operations environment a digital platform is designed to be secure, scalable, accessible, easy-to-use, and continuously available in the cloud. The key is to proactively architect resilience into the platform, creating standard solutions for specific business lines and industries while also being extensible, cost effective and resilient in the face of failure or attack. This entails working to deliver security, privacy and data compliance into systems and processes. It means automating the deployment of tools and platforms for the instant provisioning of services at the “push of a button.” And it means using cloud infrastructure services to manage storage and compute capacity, while employing robust performance monitoring and failure tracing to troubleshoot systems.
• Anytime, anywhere analytics. Advanced analytics technologies can move a business from a reactive state to a proactive one. With digital business services, businesses move beyond the descriptive – simply reporting what happened in the past – to predictive and prescriptive insights. This allows providers to help their clients anticipate what will or might happen in the future, and then decide what actions need to be taken. The use of both internal and external data provides richer context and content. Big data techniques allow providers and their customers to sift through data for insights that drive greater efficiency and innovations in order to grow revenue.
As an example, for one of the largest manufacturers of agriculture machinery, the BPO provider created a social media capability for its warranty and claims service. This enabled them to analyse consumer sentiments and perceptions toward dealer services, customer service capabilities and the complaint resolution process. These insights could then be presented to corporate leadership as a way to improve service. Capabilities also exist to leverage predictive analytics that are integrated into daily operations to help in decision-making. For a retail client, a provider used analytics on pricing, markdowns and inventory that allowed category and store managers to identify pricing gaps relative to competition that could then drive faster responses at the store level.
Achieving these results requires a more integrated and less siloed approach to data management. To enable innovation-producing insights, however, buyers need to be prepared to give their providers access to more detailed data. With mobile capabilities added to the mix, new kinds of business performance and efficiency improvements will open up to buyers.
• A digital workforce of connected employees. The digital platform enables information workers across the value chain to improve their productivity, collaborate more easily, and serve customers more effectively – while at the same time giving them a more fulfilling work experience. Workers get everything they need to complete tasks, including contextually relevant, just-in-time training when they need it; required information and reference materials tailored to tasks; access to peers and supervisors to answer questions via collaboration and social media technologies; and incentives to stay relevant and up-to-date.
With the digital workforce platform and its applications sensing, even anticipating, the needs of workers and providing the right mix of required resources, the experience becomes seamless from start to finish. By ensuring that business processes are optimised and repetitive work automated – thereby reducing errors and increasing quality – the work conducted is transformed to influence employee engagement and retention. Employees become “information detectives” and “continuous improvement specialists,” rather than transactions processors.
• A digital innovation ecosystem. Neither buyer nor provider can sustain high performance without relying on and working with others across the business and technology spectrum. This entails developing the right alliance partnerships to drive increased value and new growth opportunities amid changes and new entrants into the market. These relationships enable providers and buyers to know what tools and technologies are on the horizon that might generate new services, achieve faster results and/or improve productivity. This includes being open to innovations from established partners and vendors, as well as from unexpected places – such as research organisations, universities and government agencies. These are relationships that enable a more “modular” approach to business service solutions, and can deliver solutions that might not have been possible by any organisation working alone.
There is no question that digital is here to stay. That’s why buyers must have higher expectations about driving results beyond cost reduction, and providers need to deliver with transformational capabilities through greater use of technology. Moving to digital gives both the opportunity to turn cost-cutting operational processes into major value drivers.
About the Author
Mike Salvino is group chief executive of Accenture Operations. In this role, he oversees Accenture’s comprehensive portfolio of business process services as well as infrastructure and cloud services, including the Accenture Cloud Platform. He leads a team of both consulting and outsourcing professionals charged with developing, selling and delivering differentiated intelligent infrastructure, cloud and business process services to drive transformational value and productivity for clients.