BPO: a project enabler
A poor reputation
When I talk to my friends about my job in Officience, I often get ironic comments such as: “oh yeah, you’re the one stealing our job”. We can debate endlessly about the “necessary evil” that is BPO (see Schumpeter’s creative destruction theory), the conclusion is that BPO very often comes with a bad reputation attached to it.
Pro-BPO people will argue that it allows companies to focus on their core activity, or dramatically decreases production costs for instance. However, one vision that seems to find echo in the mind of even the most anti-BPO folks, is to consider BPO as a project enabler.
Forgetting the cost-cutting idea
We can identify at least three distinct instances in which BPO is actually enabling projects. The first two are related to “time” and “resources”: in short, when a project has to be kicked-off swiftly in order to be successful, or when it requires a specific set of skills that you know you won’t need after your project ends, then BPO offers an interesting alternative to internal staffing. I won’t elaborate on these two advantages, as they have been cited in every single article promoting BPO.
The last instance, however, is often overlooked by articles and companies alike.
How many projects did you discard because it would have not made sense “financially”?
How many times have you wondered how to shrink down these operational expenses to turn your brilliant project into a viable one?
That is when BPO really shines as a healthy, innovative, and value-creating solution:
When, without BPO, your project would not actually EXIST.
When, with BPO, “how much do I spend for that project?” becomes lower than “how much do I get in return?”.
An obvious application: Invoice validation
It is a well-known fact that, with BPO, companies can turn an already profitable project into an even more profitable one.
Less obvious though, it can also turn an impossible project into a perfectly viable project.
Enable you to drive your costs below that revenue threshold, and bring your ROI to positive % figures.
Uncover the “long tail” of business process optimization opportunities.
Take the example of a process aiming at checking, validating and correcting all the invoices that you send to your customers. If you expect to protect 10 kUS$ revenue monthly with such a process, then staffing 3 analysts at 3 kUS$ each to perform it doesn’t seem so appealing. But outsource this process, and you may well be looking at a ROI of x3!
So, where to look?
Interestingly, this vision is also based on business owners’ out-of-the-box thinking and capacity to identify opportunities for marginal improvements.
The question to ask is not: “So, how about we outsource this existing process?”.
It requires reconsidering every aspect of a process in order to identify its leaks. And BPO will make it affordable to fix these leaks.
That’s when BPO becomes a project, innovation, and value-creation enabler.
Not by reducing the operating costs that you already have to bear.
But by actually allowing you to implement processes which would simply… never exist.
(Thanks to Thibault for the awesome charts!)