BusinessProcessOutsourcingBigBangCreatingValueinanExpandingUniverse1Stymiedbyanincreasingcoststructureinacompetitivebusiness?Searchingforawaytodrivetop-linerevenuegrowth?Lookingforarapidandeffectivewaytogetaccesstocutting-edgetechnologywithouthugecapitaloutlays?Manyorganizationsareturningtobusinessprocessoutsourcing(BPO)toaccomplishtheseobjectivesandmore.BusinessProcessOutsourcingBigBang:CreatingValueinanExpandingUniverseBPOoncehadaclearplaceintheexecutive’stoolkit—itwasusedtoachievecostsavingsintransaction-intensive,backofficebusinessprocesses.That’sallchanged.BPOisemergingasaflexibleandpowerfulapproachthatbusinessleaderscanusetoachieveawiderangeoftacticalandstrategicaims.ConsiderthefollowingachievementsorganizationshaveaccomplishedwithBPO:•Speedtomarket.Start-upfirmslikeUniversalLeven,Avanade,andTradeRangerusedBPOtolaunchtheirbusinesses,enablingthemtobefullyoperationalwithstate-of-the-artcapabilitiesinweeksratherthanmonths.•Competitivecapabilities.EstablishedorganizationsliketheBBC,Safeway,andaleadingfinancialservicesfirmusedBPOtoturnalso-ranprocessesintoworld-classcapabilitiesthroughstandardization,centralization,andnewtechnology.•Costsavings.FirmslikeAvayaandKerr-McGeeusedBPOtosignificantlylowercosts,enablingthemtoredirectmoneytomorestrategicaims.•Growthstimulus.InnovativecompanieslikeTiVousedBPOasacatalystforchangetohelpstimulatecompanygrowthbyachievingunique,competitivecapabilities.•Revenue.FirmslikeBAESystemsandBradford&BingleyestablishedjointventureswiththeirBPOproviderstoleveragesomeoftheirownassetsandknowledgeinexchangeforashareofBPOrevenues.AstheusesforBPOhaveexpanded,however,sotoohastheconfusionabouthowtomakeitwork.TheoldformulasaboutwhentouseBPO,howtostructuredeals,howtomanagerelationships,andhowtocapturevaluenolongerhold.Inordertobesuccessful,executivesmustconfigureahostofcomplexchoicesintoaunique“valueequation”thatfitstheirsituation.Thisisnosimpletask.Thisreportwillhelpexecutivesnavigatethroughthelargelyunchartedterrainofthenewbusinessprocessoutsourcingbyansweringthreeprincipalquestions:•Whatcanorganizationsaccomplishthroughbusinessprocessoutsourcing?•Howcanorganizationscreatetherightrelationships?•Whatstepscantheytaketoensuretheymeettheirobjectives?OurStudyToanswerthesequestions,theAccentureInstituteforStrategicChangeinterviewedexecutivesresponsibleforbusinessprocessoutsourcingin38organizations.Forthepurposesofthisstudy,theInstitutelimiteditsresearchtoorganizationsthathadundertakenBPOinoneormoreoffourfunctionalareas:humanresources,learningandtraining,customerrelationshipmanagement,andfinanceandaccounting.(Othercommonlyoutsourcedbusinessprocessesthatwerenotapartofthisstudyincludesupplychainmanagement,procurement,andlogistics.)Sixty-threepercentoftheorganizationsinourstudyareheadquarteredintheUS,and37percentareheadquarteredelsewhereintheworld.TheInstitutealsointerviewedexecutivesin11organizationsthatofferbusinessprocessoutsourcingservicestoothers.BPOIsn’tWhatItUsedtoBeBusinessprocessoutsourcingisnotnew;someleadingedgerelationshipsaremorethanadecadeold.BPOcanbedefinedsimplyas:Contractingwithanexternalorganizationtotakeprimaryresponsibilityforprovidingabusinessprocessorfunction.2August2002BPOgoesfurtherthantechnologyinfrastructureorevenapplications.Theoutsourcingprovidertakesprimaryresponsibilityforensuringthattheprocessworks,interfaceseffectiv...
