Why are managers considering BPO and BKO options?
Our research indicates that outsourcing is well suited for a fast-growth economy, in which companies use service providers to grow rapidly; outsourcing does well in a slow-growth economy, in which companies look to change their cost structures. CFOs are looking at BPO as a way to reallocate resources and focus on core tasks since so many managers are busy trying to juggle broken processes and have little time for vision and leadership.
Managers are looking at BPO as way to deal with application fragmentation. Despite huge investments in enterprise applications such as SAP, Siebel, Peoples oft, and Oracle, corporations’ business processes have become bureaucratic and inefficient through decades of acquisitions, divestitures, adoption of new technologies, and other changes or adaptations caused by the normal course of business.
BPO offers the opportunity to reorganize and “clean up” a specific function, optimizing it for an organization’s current operating structure, competitive environment, and technology platform. Moreover, BPO service providers allow a corporation to continue to re-optimize the function over time. The corporate adoption of Internet/intranet technologies and ERP systems is making it easier to deliver many business processes remotely and more efficiently.