In the second-part of this two-part interview, Oracle's Tibor Beles discusses how service providers can be successful at platform-BPO offerings, how the broader BPO industry can improve, in addition to discussing the shifting dynamics with software licensing models. Tibor is also a blackbelt in martial arts (not the Six Sigma category), but spends more time hitting tennis balls these days with his teenage daughter. He also loves political thrillers, but he didn't elaborate whether that was through his day-job, or reading Le Carré novels -:)
Phil Fersht (PF): Do you see platform-based BPO as a major threat to the BPO pureplays which are not experienced in broad-based ERP enablement and implementation services?
Tibor Beles (TB):The first question calls for a long answer but I will try to keep it short. An aggregate BPO service provider must be passionately committed to process and IT excellence in its chosen function. Offshoring for labor arbitrage alone has limited benefits.
I believe platform-based BPO is the best path to transformational excellence. The provider who supports every lift-and-shift platform its customers started with has higher costs, fewer best practices, and less value to its customers. All it can provide is low cost labor and marginal process improvement.
Yes, platform-based BPO is a threat to pureplays. While the traditional service BPO might be a good enough solution for a short-term it has a limited process performance and cost improvement potential.
Legacy platforms of the pureplay BPO providers are often stretched to their limits in the new BPO world. Buyers increasingly expect service providers to add new services and to innovate. What can you expect from a provider running multiple obsolete service delivery platforms?
PF: If the software licensing model is shifting from the customer to the BPO provider for several enterprises, will this be a win-win for Oracle, or do you see good opportunities here for niche software providers to get into the BPO game here?
TB: The outsourcing market can be an opportunity for every software company capable to develop the right product and to offer licensing model(s) meeting providers’ needs. We will continue creating offerings in all relevant markets where all the three market constituents can win – the buyer, the supplier and Oracle. Oracle offers a unique proposition, with the breadth of our offerings, our commitment to open standards, and the integration we provide. Niche vendors may have a functional focus that brings depth to their products, but they can’t match our integration and breadth.
PF: Tibor, all-in-all, what does the BPO industry need to do next to improve, both from the client and service provider standpoint?
TB: This is a huge question. I will try to keep my answer simple and short. Two thoughts only:
I believe platform BPO is the future delivery model. I would like to see buyers to leverage the lessons learned from the ERP market, to make the choice of the service delivery platform part of the sourcing process rather than an afterthought, and also to avoid proprietary and customized software. Configure, don’t customize.
I hope that a provider-buyer relationship will become a partnership more often than it was the case in the past, as it is critical for enabling innovation. The term means many things to many people. It can range from a software upgrade, through introduction of self-services, process retooling, up to a complete process transformation or a long-term, continuous best practice improvement program. I leave it to the readers to define what the term means to them personally.
PF: Tibor, it’s been a pleasure hearing your views on the industry, and am sure our readers here appreciate your time today.
Tibor Beles (pictured) leads Oracle’s Business Process Outsourcing (BPO) globally. Oracle's BPO strategy seeks to expand the "Oracle economy "by placing its applications, technology and ancillary services under the umbrella of BPO provider offerings. Prior to Oracle, Tibor has been with SAP and IBM. He is a graduate of the Harvard Business School.
Posted in : Business Process Outsourcing (BPO), Cloud Computing, Outsourcing Heros, SaaS, PaaS, IaaS and BPaaS
Phil & Tibor,
What an excellent discussion – I didn’t realize Oracle was so focused in a BPO strategy, but these are some excellent strategic insights,
An interesting school-of-thought that BPO providers are the key to unlocking the potential of state-of-the-art software… time will tell,
Good discussion gentlemen,
Thanks for the feedback.
Another name for BPO providers could be ‘business process champions’. If they combine their process expertise with the ability to leverage the potential of standard software the mix can be a compelling service offering.