{"id":1828,"date":"2009-09-09T11:07:00","date_gmt":"2009-09-09T11:07:00","guid":{"rendered":"http:\/\/localhost\/projects\/horsesforsources\/forget-platform-bpo-its-really-about-the-business-services-cloud-part-i\/"},"modified":"2009-09-09T11:07:00","modified_gmt":"2009-09-09T11:07:00","slug":"forget-platform-bpo-its-really-about-the-business-services-cloud-part-i","status":"publish","type":"post","link":"https:\/\/www.horsesforsources.com\/forget-platform-bpo-its-really-about-the-business-services-cloud-part-i\/","title":{"rendered":"Forget Platform BPO, it’s really about the Business Services Cloud (Part I)"},"content":{"rendered":"

The recession has upped the ante for today’s BPO providers: the move to providing business services in a <\/strong>cloud-like model<\/strong><\/a> is accelerating, and the real challenge for today’s service providers lies in answering the following questions:<\/strong><\/p>\n

1) Do <\/span>we want to play in the BPO space?\u00a0 <\/strong><\/p>\n

2) How<\/span> do we play in this market?\u00a0 What’s our angle<\/span>?<\/strong><\/p>\n

3) How can we compete<\/span>?\u00a0 What’s our differentiation<\/span>?<\/strong><\/p>\n

The challenge today is whether a provider is adding value beyond low-cost processing services.\u00a0 If you are only really providing an arbitrage solution, someone is going to come along and offer it for even less money, and someone else will eventually come along and provide it for even less.\u00a0 It’s a no-win game, unless you want to become the lowest-cost provider in town and make a razor-thin profit margin.<\/p>\n

What’s interesting is this coming together of the IT\/BPO model.\u00a0 And it’s becoming much more sophisticated then simply providing a platform and some low-cost processing services.\u00a0 It’s about\u00a0 integrated<\/em> business services where the provider delivers the hosting, the application skills and the business services needed to help clients achieve specific business outcomes.<\/p>\n

IT services\u00a0providers have made a living differentiating themselves by providing expertise in technical areas that allowed them to charge a premium to their clients.\u00a0 However, as technical skills became a commodity, some IT services providers\u00a0are moving up the value-chain by\u00a0providing\u00a0expertise that apply <\/em>technical skills to specific business needs, while others have\u00a0opted to scrap around for the low-cost “price per developer per\u00a0hour” commodity business.\u00a0 Those IT services providers which think they can get away with charging a premium for commodity development services are having a rude awakening in today’s post-recessionary marketplace.\u00a0 Most clients today are insisting on greater transparency with the costs of services.<\/p>\n

This is where BPO gets interesting,\u00a0as the similarities are striking as services commoditize, and the winners focus on providing value.\u00a0\u00a0Let’s take an example in life sciences:\u00a0\u00a0an IT services\u00a0provider is performing technical clinical data\u00a0management services for a phama client.\u00a0 This entails providing programmers skilled in integrating Oracle’s clinical data repository into the pharma’s legacy applications.\u00a0 That pharma has\u00a0five other IT services shops\u00a0working on its systems, all of which can provide the same skillset to\u00a0performthe same work.\u00a0 It’s become a price-play.\u00a0 At the same time, the pharma is spending millions a year on analysts to extract that data and apply it to research projects for new drug development.\u00a0 If that IT services\u00a0provider delivering the clinical data development work can step up and also provide analytical services to help interpret and apply <\/em>that information to the pharma’s research operations, new business value is now being created (not to mention the huge cost-savings if these services are delivered offshore).<\/p>\n

However, this isn’t about providing cheap bodies to crunch data, it’s about having systems analysts working in tandem <\/em>with bio-informatics analysts to ensure the right data is being made\u00a0available and subsequently analyzed for the pharma’s scientists to make critical judgment calls.\u00a0 The differentiation is in providing the integration of technical capability, business process execution and then applying<\/em> it to the client’s business.\u00a0 Moreover,\u00a0if the provider has\u00a0performance-based incentives to help its client develop new drugs\u00a0and achieve medical breakthroughs, it is becoming intrinsically tied to the success <\/em>of its business.\u00a0 This scenario is similar in other industries, for example merchandizing support for retailers, or supply chain optimization for manufacturers. This is where the whole\u00a0IT services\/BPO\u00a0industry needs to go.<\/p>\n

In Part II of this article, we will discuss how BPO providers can differentiate themselves by developing \/ acquiring IP to deliver holistic business services that integrate the application hosting, development and business processing within a single cloud-delivery model and then apply it to client situations.\u00a0 And is there really a role for the pure-play BPOs, or is the power shifting to the IT services shops developing domain-specific industry BPO expertise?<\/p>\n","protected":false},"excerpt":{"rendered":"

The recession has upped the ante for today’s BPO providers: the move to providing business services in a cloud-like model…<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,51,81,91],"tags":[],"ppma_author":[19],"yoast_head":"\nForget Platform BPO, it's really about the Business Services Cloud (Part I) - Horses for Sources | No Boundaries<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.horsesforsources.com\/forget-platform-bpo-its-really-about-the-business-services-cloud-part-i\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Forget Platform BPO, it's really about the Business Services Cloud (Part I) - Horses for Sources | No Boundaries\" \/>\n<meta property=\"og:description\" content=\"The recession has upped the ante for today’s BPO providers: the move to providing business services in a cloud-like model...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.horsesforsources.com\/forget-platform-bpo-its-really-about-the-business-services-cloud-part-i\/\" \/>\n<meta property=\"og:site_name\" content=\"Horses for Sources | No Boundaries\" \/>\n<meta property=\"article:published_time\" content=\"2009-09-09T11:07:00+00:00\" \/>\n<meta name=\"author\" content=\"Phil Fersht\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@pfersht\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Phil Fersht\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.horsesforsources.com\/forget-platform-bpo-its-really-about-the-business-services-cloud-part-i\/\",\"url\":\"https:\/\/www.horsesforsources.com\/forget-platform-bpo-its-really-about-the-business-services-cloud-part-i\/\",\"name\":\"Forget Platform BPO, it's really about the Business Services Cloud (Part I) - 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