Study: Philippine BPOs need to change mindset - Home ? Other ...

MANILA, Philippines ? Global management consulting company Accenture urged business process outsourcing companies (BPOs) to change their mindsets when it comes to industry demands to achieve their full business value.

Accenture made the announcement after releasing the results of their BPO Research Study based on a survey of 263 buyers of BPO services such as finance, accounting, procurement, human resources and supply chain.

The report showed a relatively small number of BPO buyers ? 20 percent of those participating in the study ?succeeded in extracting greater business value from their BPO relationships.

The report also validated eight best-in-class practices that are strongly correlated with high performing engagements.

Accenture claimed that by adopting these practices, buyers can realize greater business value than ?typical? BPO engagements deliver.

The study showed that high performers in BPO exhibited eight core management behaviors and practices, and these includes: Taking a holistic approach to managing the scope of the BPO relationship; Adopting a collaborative approach to governance; Making change management a priority; Focusing on benefits beyond cost reduction; Targeting strategic business outcomes; Leveraging domain expertise and analytics; Aligning the retained organization with the outsourced processes; and using technology as an enabler.

?This study clearly shows that the industry mindset needs to change for organizations to capture the full business value of BPO, where engagements are measured by business outcomes and improving clients? business performance rather than just cost reduction,? said Mike Salvino, group chief executive, BPO, at Accenture.

Salvino added the results indicate that BPO arrangements deliver greater business value when the client and provider engage in deeper relationships and leverage practices that drive high-performance BPO.?

"Those who are able to bring these elements to their relationships will be well-placed to succeed ? and those that continue to view BPO purely in terms of transactional processing and cost will be competitively challenged," Salvino said.

The research also found that there are statistically significant differences in the performance and behavior of high performing and typical BPO relationships.

Some of the widest statistical differences were in areas focusing on mindsets and attitudes, or on the execution of ?soft? programs such as organizational alignment and collaboration or change management.

Survey results indicated that a collaborative, approach toward governance is important to create high performing BPO relationships.

For instance, in collaborative arrangements, clients consider their BPO provider to be a strategic partner, and senior leaders from both sides commit their time to the relationship.?

A broader stakeholder alignment and involvement of senior leaders mean that high performing engagements are better able to productively resolve their conflicts than normal engagements.

Findings showed nearly 85 percent of high performing BPO engagements consider the service provider to be a strategic partner compared to 41 percent of typical engagements.

In 75 percent of high performance BPO engagements, senior leaders from both parties spend time to understand each other?s objectives and strategies compared to 33 percent of typical engagements.

Yet 90 percent of the high performers reported that the client and provider were able to productively resolve conflicts. This was true only with 44 percent of typical performers.

Other key behaviors that showed significant differences in results include: Making change management a priority; Focusing on benefits beyond cost reduction; and Targeting strategic business outcomes.

Under prioritizing change management, results showed 77 percent of high performing BPO engagements have successfully executed change management plans compared to just 34 percent of typical engagements.

Also, nearly 85 percent of high performing engagements proactively refine their objectives as the relationship matures compared to just 40 percent of typical engagements.

And on focusing on benefits beyond cost reduction, 67 percent of high performing engagements include business benefits beyond cost in the business case compared to 26 percent of typical engagements, while 58 percent of high performers will consider service options with greater value, even at higher costs, compared with 31 percent of typical performers.

Meanwhile, under targeting strategic business outcomes, 56 percent of high performers seek competitive advantage through BPO, while only 28 percent of typical performers aim for that goal.

Also 64 percent of high performing engagements place more focus on capturing other benefits as they achieve cost reduction compared to 40 percent of typical engagements. And more than half of high performers (54 percent) have contract performance incentives in place, compared with only about a fourth (24 percent) of typical performers

"By adopting the behaviors and practices associated with high performance BPO, organizations can capture significantly greater business value and build new competitive strengths, ranging from accelerated speed to market, enhanced innovativeness and stronger customer loyalty to savvier talent management, and top-line growth," Salvino said.

Source: http://www.philstar.com/Article.aspx?articleId=784375&publicationSubCategoryId=200

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