How to do a successful business process management outsourcing
What is business process management, also referred to as BPM?
A definition of BPM is made available by BPM.com: “Business Process Management (BPM) is a discipline involving any combination of modeling, automation, execution, control, measurement and optimization of business activity flows, in support of enterprise goals, spanning systems, employees, customers and partners within and beyond the enterprise boundaries.”
New age providers like oWorkers are well positioned to support clients in their BPM journey. We have chosen to focus on data related services, and are happy to report that we are counted as one of the top three providers of BPM services in our chosen domain.
The rise of Business process management outsourcing
BPM appears to be a more recent phenomena in terms of awareness and there are indications that it has been the outcome of the continued success of the process outsourcing industry and the value it has added.
In fact, NASSCOM, the industry association that represents the software and IT-enabled services companies in India, the biggest outsourcing destination, has been proposing for over a decade that the process outsourcing industry should adopt Business Process Management (BPM) as its name and shed the Business Process Outsourcing (BPO) tag. However, BPO continues to be the term used more commonly.
The logic for replacing BPO with BPM appears to be based on the maturity of the industry and what it was doing. Though it may have started as the outsourcing of tasks and executing them in an efficient and economical manner, vendors have been able to go much beyond this original brief and add value in different ways, such as:
- They have been able to bring about improvements in the processes that they were handling, making them more efficient.
- Aided perhaps by the aggregated volumes across many clients, they have successfully created platforms in certain cases and converted hitherto manual operations into digital ones.
Thus, they have been able to create value for clients over and above what may have been originally envisaged.
Additionally, while outsourcing seems to indicate the engagement of an external party, many large companies opted for setting up their own spin-off units or subsidiary companies to focus on business processes for the mother ship. It is perhaps a technicality whether to consider this as an outsourcing arrangement or not. For the purists it may not constitute outsourcing while for the functionally oriented, one department of a company doing work for another department could also be considered as outsourcing.
These are some of the imperatives that may have impelled the introduction of BPM and its subsequent gain in popularity.
And our clients appreciate our support. Many of the BPM clients of oWorkers report savings in excess of 70% when compared with their pre outsourcing costs. This is true for almost all our clients from the US and Western Europe. More than 80% of our clients are technology companies, including several unicorn marketplaces.
BPM and BPO – a comparison
How is it different from business process outsourcing, or BPO? While business process management outsourcing (BPM) and business process outsourcing (BPO) may, at least on the surface, seem like the same thing, there are differences between the two that need to be understood, not only for using the right term at the right time, but also to ensure that your business is getting the best value.
BPM can be said to have a wider remit than BPO. It focuses on the entire process and is charged with the responsibility of ensuring that it is dealt with in a manner that adds the greatest value to the business. If it means changing steps and responsibilities, then that can be done, as long as it results in overall better management.
BPO, on the other hand, can be said to focus on efficiently carrying out the process that has been outsourced. How can it be done faster? How can the final output be produced in a shorter time frame? are some of the questions it would seek to answer. It does not seek to make fundamental changes in the way something is done, rather finding efficient and economical ways of doing it.
oWorkers is ISO (27001:2013 & 9001:2015) certified and operates from super secure facilities for the protection of your data. We are also necessarily GDPR compliant, since we operate from the Eurozone.
Some consider BPM to be the process of managing one’s own business processes. In other words, when a company seeks to review, improve, manage the business processes it handles, or runs, that activity is known as BPM.
When the same activity is handed over to a third party to manage and run, it is referred to as BPO or business process outsourcing.
This is more of a purist view, based on ownership of running the processes. Functionally driven business people might not differentiate between BPM and BPO on the basis of ownership.
oWorkers takes ownership of the outsourced processes and delivers. Our accuracy rates are above 99%, measured on different scales for different clients with different requirements. Our internal quality team leads the way with process improvements.
Expertise in the area of work is another parameter used to differentiate between business process management outsourcing and business process outsourcing.
On many occasions the work outsourced pertains to an area that is highly specialized and requires experts who are highly skilled. For example, legal services is an area that not many businesses have the capability of handling inhouse. It requires long years of education before one can qualify to become a lawyer. Perforce, it needs to be outsourced to a specialist like a legal firm. Such forms of outsourcing when it is done for the expertise and not for the cost or efficiency is referred to as BPM.
BPO, on the other hand, is the outsourcing of activities that could be performed by the business itself, but has chosen to outsource it to a partner for various reasons.
Being a preferred employer, oWorkers has access to the best talent the catchment area of each center can offer. Our training team works on the raw talent and makes them fit for purpose.
Responsibility and interference
In a BPO arrangement, the outsourcing is usually at a task level, and the outsourcer is usually involved at the detailed level in running the operation, even down to the task of approving resources that are being hired.
BPM, or business process management outsourcing, on the other hand, is a more wholesome outsourcing arrangement where the outsourcer does not need to be involved in the day-to-day operations of the partner.
As an example, while engaging a recruitment firm for hiring resources may be considered to be a BPO engagement, handing over the HR process in its entirety, referred to as HRO or HR outsourcing, might be referred to as BPM.
oWorkers can offer staffing for handling even short-term, unplanned spikes in volume which would otherwise cost clients a lot in terms of idle resources. oWorkers can hire an additional 100 resources within 48 hours.
Lastly, and perhaps strangely, many providers believe that the two terms, BPO and BPM, have associations in terms of the nature of work and even the provider.
BPO, many providers believe, has come to be associated with high volume and low skill requirement work such as Contact Centers and Transcription. If they do that kind of work and are interested in positioning themselves for future clients, BPO works for them.
However, many providers who would like to be known to be doing work that is skilled, whether they actually do it or not notwithstanding, have made efforts to dissociate themselves from being referred to as BPO providers, promoting themselves as BPM providers instead. Other variants like BPS, which stands for Business Process Services, have also come into use.
oWorkers is happy to provide support, whether it is BPM or BPO. Our three global centers are equipped to operate 24×7 if a client has need for it, and can support clients in 22 languages through our multi-ethnic and multi-cultural staff. Incidentally, oWorkers works with fully employed staff, unlike some competitors who choose to operate with largely freelancing or contractual staff.
The path to a business process management outsourcing engagement
Whether BPO or BPM, the objective is to achieve business success, for both the outsourcer as well as the vendor. From an outsourcer’s perspective, while selecting the right vendor is often the focus of effort, a lot more that needs to be done, both before and after the vendor is identified. Without adequate attention to each of these steps, the end result could be sub-optimal. No outsourcer would want that to happen.
Outlined here is a recommended process that will guide you from the point where you have started thinking that you would like to do business process management outsourcing, through to the end point where the vendor has started delivering.
1. Identify Requirement
Many business deals do not succeed because the client (buyer) is not clear on the requirements. What are they buying? Why are they buying? What problem will it solve? What value will it add? Identification of your needs is a good starting point. Some clarity on success (or failure) criteria will be even better.
2. Advertise requirement/ Seek participation
Once it is clear that you would like to consider outsourcing as an option, you would need to make known to the prospective vendor community about it, with information from relevant items of the checklist created in the earlier phase. This can be done in many different ways:
- Issuing a Request for Proposal (RFP) is the process preferred by large enterprises. An RFP is a standardised proposal form where you specify the information you are looking for.
- Advertising in trade circles, if you are a part of them.
- Looking up prospective vendors online or through directories like Yellow Pages and informing them one by one of your requirements. They will respond if interested.
3. Shortlist vendors
By now you would have hopefully received some interest from prospective vendors. If you have been flooded with responses, you should shortlist down to a few with whom you can engage in a more detailed manner. If responses are inadequate, you may need to review the terms and conditions you have set out. Perhaps they are too strict for vendors to be interested in.
4. Detailed discussion and evaluation
At this stage, detailed discussions will start. Both parties will share information. As it is a B2B engagement, execution of a Non-Disclosure Agreement (NDA), which binds both parties to treating the information received as confidential, might be done with mutual agreement. The potential vendor will make a pitch, and a case for being selected. The scope of services will be discussed, including possible pricing. This phase usually takes the longest.
While selection criteria will vary based on the business as well as preferences of the outsourcer, the following might be suitable considerations:
- Prior experience with similar work
- Demonstrated delivery of quality and accuracy
- Ability to complete work in required time
- Updated technology with adequate arrangements for ensuring data security
- Access to a pool of suitable human resources
- Pricing that does not break the bank
5. Shortlist down to 1
Eventually the most suitable partner will be identified and a Letter of Intent issued. Contractual terms, which would have been already discussed during the previous stage, would now be formalised. Others shortlisted vendors should be kept warm if this partnership falls through for some reason.
6. Finalise terms and sign contract
Though terms may have been agreed earlier, the formal agreement is signed based on mutually acceptable terms and conditions.
7. Implement Project Plan
If this has not been done at the contracting stage, the parties will develop and agree on an Implementation Plan which defines the steps each of them must take to reach a steady state. In other words, reach a point at which the activities envisaged in the contract are running at the expected level. The timelines are also defined in the Implementation Plan. This could include a Trial Run, if agreed.
8. Team identification, training and ramp support
The vendor will need to identify the team that will support activities under this contract while the outsourcer will arrange the initial training. The support teams of the vendor, like hiring and training, will start playing their regular roles for this project as well. Technical handshakes required will also be made.
9. Begin work, test and then go full steam
Work begins. If volumes are large, there is a ramp-up generally provided for in the Project Plan. Staring slowly, the work gradually ramps up to handle the agreed volumes.
Business process management outsourcing, when done right, not only helps its clients work better, but also enables reduction of economic disparities across regions and enables left-behind communities to get employment and opportunity in the digital economy.
oWorkers regularly employs people from the marginalized communities and gives them a ticket to participate in the global digital economy. Your work will enable us to employ a few more similar people and empower them with a job.