Constraints and risk are primary areas of interdependence, such as meeting deadlines for business performance or regulatory compliance and the associated impact of non-performance or non-compliance. However, organizations can often miss the favorable aspects of time when developing their business case.
A potential BPO initiatives ability to accelerate benefits can have a significant effect on the business case. For example, I have seen organizations provide early retirement to highly-skilled staff, develop a captive subsidiary for those who wanted to continue their roles, and then outsource these skills to that organization. This positively affects operational costs, increasing revenue and reducing risk.
Risk - Risk is very often the differentiator whether to implement a potential BPO initiativewhich provider to choose, how to structure and manage the relationship and many other downstream aspects.
Identifying risk elements, their probability of occurrence and their associated impacts relative to other aspects of the business case is an obvious place to start. There are many good sources for risk management theory and application, but its also an area where Ive seen organizations become too involved in analysis, leading to indecisiveness and even negatively affecting potential benefits.
Its important to focus on identifying those factors and resources that can either reduce risk and/or enable success, then manage them appropriately because predicting all of them might be unrealistic. Each organizations tolerance for risk is different but I think Pareto is our friend, and assuming the business case team is competent we should aim to move forward at an 80% level of certainty and course-correct as we go.
So, we have a business case. Now, whats next? Ill save the details for future columns, but a solid business case should help an organization make an informed, holistic business decision about a potential BPO investment, as opposed to over-focusing on the cost savings, a new technological capability or other singular factors. It should also become the compass for managing the realization of the anticipated benefits.