Business Management Review |
Outsourcing business process management is becoming much more digital and potentially much more powerful as buyers and providers are willing to engage in more strategic and collaborative ways.
FREMONT CA: Decades ago, companies often used outsource business processes primarily as a cost-cutting strategy. While technology optimized business processes, it was primarily limited to basic task automation. Currently, a better strategy is emerging, in which organizations can outsource to take advantage of more advanced provider solutions. Customized industry solutions and digital technology advancements such as AI, analytics, and machine learning are included as well.
The experiences of developing organizations increasingly show that the time has come for the outsourcing industry to evolve from advance from classic right-shoring and basic automation to completely digital operations via business-process management (BPM). These kinds of outsourcing partnerships aren't prevalent yet, giving both service buyers and providers a boost by generating distinct operational advantages and big bottom-line value.
Companies spend an estimated USD 230 billion on business process management globally. These include customer-service services like contact centers to back-office processing in areas like claims, payments, finance, and procurement. So far, outsourcing transactions that specifically demand next-generation technologies have accounted for a modest percentage of total spending.
An in-depth evaluation of 53 business-process-outsourcing transactions that closed in between 2016-2020—a specimen of more than 200 such deals—shows that about one-quarter included at least one digital component (social media, mobile applications, analytics, automation, cloud, or Internet of Things). This prospective possibility contrasts sharply with the outsourcing industry's average single-digit growth rates. Examining the total contract value (TCV) reveals a similar trend, where the digital services increased from 30 to 70 percent of TCV from 2016-2020. Moreover, the pool of new deals with a digital constituent has continuously increased to nearly 50 percent.
Multifarious companies attribute the rapid growth of digital in BPM deals to a variety of factors. Primarily, the customer demand for digital products and services has increased at an exponential rate, along with the widespread adoption of cloud technologies across industries. Cloud-enabled deals peaked at 67 percent of TCV in the private sector and 63 percent in the public sector.
Cloud platforms and services, consecutively, enable the adoption of additional digital and data technologies. Many BPM providers, for instance, are leveraging cloud-based systems in specific applications, such as accounting and credit and cash management, to reduce cycle times for data-intensive processes. According to BPM buyers and providers, introducing digital into an outsourcing contract can deliver two to three times more impact than traditional models, simultaneously, improving the buyer and customer experience.
This content is copyright protected
However, if you would like to share the information in this article, you may use the link below: