PublicationDate:18February2003ResearchBriefAFrameworkforMakingPartnerChoicesinBPOAbstract:OpportunismtypicallypropelsallianceactivityinIT.Wherebusinessprocessoutsourcingisconcerned,opportunismcanbeariskyandextremelycostlystrategy.ByChristineAdamsandRebeccaSchollRecommendationsIThefirst,criticalstepinthepartnerselectionprocessistoidentifythebusinessaimsbeingpursued.Ambiguousorill-conceivedbusinessstrategiesbecomeill-conceivedalliancestrategies.IPartneringisneithertheonlynortheuniversallyidealoption.Forexample,itisnotadvisabletopartnerforcapabilitiescoretoyourbusinessortoyourdesiredroleintheBPOservicedeliverymodel.Here,buy-or-buildstrategiesmakemoresense.IBusinessprocessoutsourcersarefewanduntested.Becautiousratherthanopportunisticinyourpartnerchoices.IBusinessprocessoutsourcing(BPO)allianceshavetobebuiltforthelong-termandallowforflexibility.Theyhavetobereassessedcontinuously.2AFrameworkforMakingPartnerChoicesinBPO©2003Gartner,Inc.18February2003IntroductionAsITproviders(andnon-ITproviders)ofalltypesfocusmoreintentlyontheBPOopportunity,"whoshouldIpartnerwithinBPO?"isanincreasinglycommon—andurgent—question.Unfortunately,noreadyanswersareavailable,evenforexperiencedITalliancebuilders.WhatworksinothersegmentsoftheITmarketsimplydoesn'tworkinBPO;thenatureoftheBPOopportunityitselfisacomplicatingfactorthatcanobscurepartnerchoicesandincreasetheriskandcostofbaddecisions.InthisResearchBrief,GartnerDataquestsetsforthaframeworkthatITproviderscanusetoevaluatetheBPOmarketplace,theroleorrolestheymightplayinitandthecriteriaformakingalliancechoices.GartnerDataquestdefinesanallianceasanongoingcooperativebusinessarrangementbetweentwoormoreindependentpartiesthatdonotnormallyrelyoneachotherasaprimarysourceofrevenue,astheymightintheresellerchannel.TheBPOOpportunityTheoutsourcingofITandprocessmanagementcontinuestogrowfasterthanenterprise-basedconsultinganddevelopmentandintegration,bysellingcostsavingsandITprogressinonepackage(see"ProcessManagementForecast:November2002"[ITSV-WW-DA-0172]).GartnerDataquestforecaststheworldwidemarketforprocessmanagement—thecorecomponentofBPOcontracts—willgrowfrom$71.3billionin2001to$113.9billionin2006.StrategicChoicesImpactGiventhemagnitudeoftheBPOopportunity,aswellastheimpactBPOislikelytohaveonthedeliveryofothertypesofITproductsandservices,itisnotsurprisingthatalltypesofproviderswanttomoverapidlytosecureapositioninthisburgeoningmarket.Intheirhaste,providersmayoverlooksomeofthefollowinguniqueaspectsofcompetinginBPO:ITheBPOservicedeliverymodelandrelatedcompetencyrequirementsarehighlyfragmented.BPOinvolvesacomplexmixofservices,includingbusinessconsulting,ITconsulting,processre-engineering,applicationsdevelopment,systemsintegration,infrastructureoutsourcing,applicationsmanagement,changemanagementandprocessmanagement,asdescribedinFigure1.Eachoneoftheseservicesrequiresdifferentskillsandcompetencies.NoBPOprovidercanclaimtoownalloftheseskills.IBPOisanumbrellatermthatencompassesmyriadprocess-basedmarketsegmentsandopportunities.AserviceprovidertargetingtheBPOsegmentmustpositionitsservicesinthecontextofaspecificprocessorgroupofprocessesandthenassessopportunitiesrelatedtooutsourcingthatprocess.3©2003Gartner,Inc.18February2003IRolesandactorsaredifferentfromthoseinotherITopportunities.BPOincludesmanytraditionalITservices,asmentionedabove.ItishardtoconceiveaBPOprojectwithou...
