BPO business driver is no longer cost savings

October 31, 2011: Over the years different companies have enjoyed the benefit of cost reduction by out sourcing their functions to India. So cost reduction was the main driver behind outsourcing. Managers are very well aware of the cost benefits that outsourcing offers and now they are focusing on other benefits that outsourcing can offer.

Most of the companies which have outsourced their process have reduced operational costs in areas such as software development, software testing, maintenance etc. Now they are concentrating on achieving improvements in processing and technology with the help of outsourcing. The stimulus has changed as a result of experience the managers gained from outsourcing and they are confident about other benefits that can be derived out of outsourcing.

A survey conducted across 534 buyers and providers, it is clear that the buyers are more concentrated on achieving greater flexibility to improve their operations across the globe. The survey says that it is the main driver behind outsourcing.

In most cases the managers are not interested in continuing with in house operational processes as they are not showing any signs of improvement. 80 per cent of the buyers are looking to move in to standard processes which will improve the effectiveness and efficiency of the firm. This gives the suppliers a huge opportunity to provide one to many or one to few offerings which are best in class. Such offerings are become a differentiator in the market are buyers are looking for more standardized solutions from their outsourcing partners. The standardization of processes will has led o more utilization of cloud based services which can be easily integrated with their business platform.

According to the survey 43 per cent of the buyers opined that flexibility in global operations is main motivator that drives outsourcing. During the past, the shared services and the vendor management functions which consists of outsourced IT and business process, were separated and had no linkages. But now managers have realized that these functions need to be integrated to achieve global process effectiveness.

The survey reveals that 52 per cent of the respondents said that the better access to technology support is a motivating factor for outsourcing. Now providing top class IT support has become a differentiator in the market as clients are looking for better support.

With the use of outsourcing for more than cost reduction, has started to make organizations smarter and to increase their expectations. Outsourcing providers have become so important that buyers have started to see them as strategic partners.

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