HfS Network

What are Business Platforms and why they represent the future of outsourcing

November 14, 2011 | Phil Fersht

We've been talking about Platform BPO, Cloud BPO and every other permutation of BPO for a very, very long time.  So what's changed, we hear you cry

Buyers are ready to standardize business processes

"Please mind the innovation gap"... click here to find out what Business Platforms are and why they represent the future of outsourcing

Our recent study that covered the intentions and observations of 534 buyers, advisors and providers with their sourcing strategies, in the event of this seemly ever-present threat of a “Double-Dip” Recession, revealed what is motivating buyers to outsource in this current climate.

While eliminating cost is an ever-present obligation, buyers are also equally focused on achieving greater flexibility to scale and support their global operations - and even more significantly - prepared to explore adopting standardized business processes.

Yes:  80% of buyers are willing to move onto standard processes.  They are increasingly unconcerned if their closest competitors use the same expense management or claims adjudication processes, the same cash applications or collections tools.  They simply want to adopt quality process flows they can deploy effectively and efficiently, if there is no competitive advantage to be gained that necessitates conducting these processes in a certain unique manner:

 

Providers have a real incentive to position productized and one-to-many (or at least one-to-few) utility offerings onto buyers

The ability to develop some best-in-class processes as "Business Platforms", whether they focus on horizontal or vertical process clusters, is becoming a real differentiator in the market, as buyers seek more standardized solutions from their outsourcing engagements. Moreover, more process standardization leads to more Cloud-based BPO services where clients can easily tap-into these Business Platforms without having to grapple with cumbersome on-premise software and expensive licenses, or contend with resistance from awkward internal IT staff.  In short, buyers can start to look at moving from “A to C” with adopting quality standard processes and miss out much of that painful “B” phase (which is often where many get stuck unto perpetuity).

So what are Business Platforms?

Business Platforms, enabled by the fusion of Cloud Computing, SaaS and BPO innovations in an integrated singular managed service, are emerging rapidly as the desired “one-to-many” utility service provision for providers and a new source of value for outsourcing buyers.

Buyers can now explore transitioning more rapidly to a desired future state for a specific business process, or set of processes.  The gauntlet being laid out to providers, with these Business Platforms, is their ability to support their clients’ transitions quickly and inexpensively.  Simply selling “products” is not the concept of business platforms – it is the provider’s ability to work with their customers to facilitate and support the ultimate business outcomes of managing the processes associated with the Business Platform offering.

Business Platforms have four key characteristics:

  1. Business platforms provision managed standardized business processes;
  2. Business Platform owners (services providers) are responsible for managing the business processes associated with the Business Platform and provisioning the people that operate them, the underlying software-as-a-service platform, and the supporting public of provate Cloud infrastructure;
  3. Business Platforms focus on business outputs or outcomes rather than inputs such as labor and physical assets;
  4. Business Platforms service more than one client

Well-executed Business Platforms provide customers with compelling technology-enabled business process services that help drive innovation via process re-engineering, greater business agility and productivity improvements. They are flexible and scalable in the face of global demand fluctuations and provide high-quality process workflows.

The Bottom-line: Business Platforms change the focus to the achievement of outcomes 

The days of clients being able to spend multiple-millions of dollars to transform processes as part of a complex outsourcing transformation are fast diminishing. Subscribing to Business Platforms that consolidate infrastructure, middleware software, labor, and process/domain expertise including future investments, as OPEX is attractive to clients. Cheaper to get started, and with output or outcomes-based fees, Business Platforms align with the current budgeting trends evident in the market. Buyers of non-core operational processes do not want to go and ask for CAPEX in this economic climate.

Click here to download our new RapidInsight, "What Are Business Platforms and Why Do They Represent the Future of Outsourcing?"

 

Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesCloud Computing

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1 Comments

16 Comments

  1. Capgemini collects Vengroff Williams to slip into third spot for global Finance & Accounting BPO
    Posted Nov 15, 2011 05:25 AM | Permalink Reply

    [...] Research Services « What are Business Platforms and why they represent the future of outsourcing [...]

  2. Andrew Karpie » Study: What are Business Platforms and why they represent the future of outsourcing
    Posted Nov 15, 2011 08:41 AM | Permalink Reply

    [...] HfS Research, an outsourcing industry research firm in the UK, recently published a new study that reports continued rising interest in “business platform” approaches to business process outsourcing (BPO).   The actual report in PDF format can be found via a link at the bottom of this article:  “What are Business Platforms and why they represent the future of outsourcing‘”  [...]

  3. Michael Gagas
    Posted Nov 29, 2011 08:07 AM | Permalink Reply

    Which processes in HCM would most companies NOT standardize and outsource? Think it depends on industry, company's secret sauce, or competitive differentiaters.

  4. Paris Law
    Posted Nov 29, 2011 10:02 PM | Permalink Reply

    I think you hit on a key point when you said "...it is the provider’s ability to work with their customers to facilitate and support the ultimate business outcomes of managing the processes associated with the Business Platform offering." This is a strong calling for providers to step beyond the product/package mentality and focus more on the outcome based results their platform can bring. I'm curious as to why the "availability of proven offerings" has such a low motivating factor. I would think the having proven offerings would demonstrate the ability to provide a strong platform.

  5. SAP + Success Factors = Great for SAP, but could restrict growth potential for the HR services industry
    Posted Dec 04, 2011 08:50 AM | Permalink Reply

    [...] their own Business Platform offerings and develop outcome-based delivery models.  As we have been discussing at length on HfS, the leading BPO providers are hurriedly developing service offerings that are underpinned by [...]

  6. SAP + SuccessFactors = Great for SAP, but could restrict growth potential for the HR services industry
    Posted Dec 04, 2011 01:40 PM | Permalink Reply

    [...] their own Business Platform offerings and develop outcome-based delivery models.  As we have been discussing at length on HfS, the leading BPO providers are hurriedly developing service offerings that are underpinned by [...]

  7. It may be for life, but will there be innovation, as TCS inks the mother of all insurance BPO deals
    Posted Dec 09, 2011 04:45 AM | Permalink Reply

    [...] been rambling on a lot about Business Platforms of late, and we see this engagement as a genuine move by a provider to develop one that dominates [...]

  8. It may be for life, but will there be innovation, as TCS inks the mother of all insurance BPO deals
    Posted Dec 13, 2011 04:34 AM | Permalink Reply

    [...] been rambling on a lot &#1072b&#959&#965t Business Platforms &#959f late, &#1072n&#1281 we see th&#1110&#1109 engagement as a [...]

  9. IBM embellishes its B2B commerce empire… by acquiring Emptoris
    Posted Dec 15, 2011 02:02 PM | Permalink Reply

    [...] technology platforms, such as Emptoris, which providers can deploy as part of an integrated “Business Platform” offering, as the future of driving productivity and growth for their services lines as they [...]

  10. Motivations for Outsourcing Are Moving Beyond Cost Reduction | BancTec
    Posted Dec 26, 2011 11:36 PM | Permalink Reply

    [...] finding came from the recent study in which 534 buyers, advisors, and providers shared their sourcing strategies in the event of a [...]

  11. After 24 years, it’s adios ACS (er… except in Asia/Pac)
    Posted Jan 29, 2012 08:50 AM | Permalink Reply

    [...] beyond what it inherited from ACS. While its competitors are hurriedly investing in developing business platforms that combine their business process and technology (Cloud) capabilities, we are yet to see Xerox [...]

  12. IBM embellishes its B2B commerce empire… by acquiring Emptoris
    Posted Feb 02, 2012 06:58 PM | Permalink Reply

    [...] of technology platforms, such as Emptoris, which providers can deploy as part of an integrated “Business Platform” offering, as the future of driving productivity and growth for their services lines as they seek [...]

  13. Why the mid-market is the mother-in-law of outsourcing
    Posted Mar 09, 2013 10:18 AM | Permalink Reply

    [...] platforms, based on industrialized tech platforms and processes.  We’ve talked about this for a few years now, but it’s taking an age to evolve.  Where are the platform partnerships between the [...]

  14. Why the mid-market is the mother-in-law of outsourcing - What is HR Outsourcing
    Posted Mar 09, 2013 06:23 PM | Permalink Reply

    [...] platforms, based on industrialized tech platforms and processes.  We’ve talked about this for a few years now, but it’s taking an age to evolve.  Where are the platform partnerships between the Netsuites, [...]

  15. What are Business Platforms and why they repres...
    Posted Jun 07, 2013 10:42 AM | Permalink Reply

    [...] The ability to develop some best-in-class processes as 'Business Platforms', whether they focus on horizontal or vertical process clusters, is becoming a real differentiator in the market, as buyers seek more standardized solutions from their...  [...]

  16. Reachout Wireless
    Posted Sep 28, 2014 07:25 PM | Permalink Reply

    Reachout Wireless...

    What are Business Platforms and why they represent the future of outsourcing...

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