Three Steps to Greater Valuewritten previously about the importance to outsourcing initiatives of a solid business case and a plan for realizing its expected benefits. The business case is the compass and the realization plan provides the navigation for a successful journey.
Extending this loose analogy, business process management (BPM) focuses on making the trip more effective and efficient. When the bumper sticker on our shiny new business process outsourcing (BPO) initiative asks Hows My Driving? we can use BPM to help answer that question.
BPM has historically suffered from conflicting interpretations. It is often equated to workflow, enterprise integration and even content management. It has been disgorged in the same breath as BPMN, BPEL and other guttural noises. Instead, I want to focus on how key BPM principles can help enable outsourcing.
Im not diminishing any of the technical innovations within the BPM space, but its the approach built on these key principles that affords the best chance for effective process management. The principles apply as much to outsourced processes as to those performed internally, and its important to understand how outsourcing providers incorporate them within their offerings, and how they integrate them with their customers BPM efforts.
Business processes that truly add value have inherent critical performance metrics. To manage the process effectively, an organization needs the appropriate visibility into the process and these metrics. Within BPM, business activity monitoring (BAM) provides this visibility by collecting raw process data, then making this data actionable by putting it in a business context.
As an example, consider an organization outsourcing its customer contact processes to a provider offering a multi-channel contact center. The provider works with the organization to balance service levels and costs by trying to shift some customer contact scenarios to a self-service model.
BAM can help both the organization and the provider understand whether the shift to self-service is achieving the expected balance of service convenience and quality with lower costs. Ideally for the organization, there will be a clear line of sight from process performance metrics to its broader key performance indicators (KPIs).
Important considerations for organizations looking at BPO providers include:
Organizations using BPM internally are ultimately seeking to improve their decisions, operations and performance. This improvement naturally involves process changes based on activity monitoring and other input factors.
Outsourcing providers have, until recently, tended to limit the options for process changes because it made BPO easier to sell, operate and profit versus customization. However, one of the newer approaches in outsourcing is selective customization, and providers are beginning to use it as a key differentiator versus commodity pricing in a copycat market.
Example scenarios for selective customization might be a Human Resources department using outsourcing to manage a large number of expatriates across several dozen countries or emerging outsourcing areas such as R&D.
In order to make selective customization work, outsourcing providers need to at minimum effectively couple monitoring and agile response. Key considerations include:
Breakthrough process innovation is generally a welcome development, but increasing process value often means incremental and continuous improvement. Completing the loop begun earlier by active monitoring and agile response, some important considerations for continuous BPO improvement include:
BPM has helped organizations to maximize process value and improve their decisions, operations and performance. It makes sense to examine whether leveraging these principles for BPO can help to catalyze success for both the organization and its outsourcing providers.