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The Practitioner's Guide to Shared Services and BPO - Vol. 2

This white paper is volume two of a four-part series of guidelines for shared services and BPO developed by Alsbridge to reflect a shared understanding of best practices for:

1. Developing a business case
2. Organizational design
3. Change management
4. SLAs and service levels; charging and benchmarking

The Next Wave of Vendor Relationship Management

What is the next great strategic sourcing practice for sustaining cost reductions and driving an efficient, competitive business in an environment that is constantly and dramatically changing? The answer is in how companies are addressing vendor relationship management and creating incentives that better leverage the capabilities of their current providers.

Most mature outsourced companies have created a concentrated multi-provider base, often with a handful of large sourcing vendors playing a major role in supporting the organization. These efforts have shifted business critical processes and value chain activities to outsourcing providers, creating new major provider relationships that are vital to operational continuity. Accelerated software delivery life cycles, vastly more sophisticated infrastructure virtualization, rapid pace of process and technology convergence, and the need to work seamlessly with offshore vendors have made effective vendor relationship management more demanding and more critical than ever before.

These companies are developing a new set of vendor relationship management capabilities by creating vendor "tiering" structures - including processes, governance mechanisms, and systems to manage sourcing vendors on a day-to-day basis over the full relationship lifecycle.

This paper describes the new vendor relationship management and service management environments, the challenges of extracting increased value through vendor management, and the vendor relationship management best practices leading edge companies are already applying in order to deliver maximum value from their multi-sourcing provider base.

The Practitioner's Guide to Shared Services and BPO - Vol. 1

"From an economic perspective, a business case details the associated costs and benefits (both quantifiable and non-quantifiable) of the proposed solution."

Volume 1 is the first of a series of Guidelines for Shared Services and Business Process Outsourcing (BPO) developed by Alsbridge to reflect a shared understanding of good practice in developing a business case, organizational design, change management, SLAs and service levels, charging and benchmarking.

This white paper provides guidance on business cases for organizations contemplating a Shared Service or BPO initiative. It can be read straight through, as an introduction or overview, or used on a section by section basis as appropriate. Sections include an outline of the fundamentals of business case design, a description of the points in the Shared Services and BPO life cycle when business case activity is required, and details on the contents of a business case.

Nine Shock Waves That Will Hit BPO in the Next 24 Months

The biggest headline in the Business Process Outsourcing (BPO) world today is that continuing global economic changes are causing a paradigm shift in the way organizations are doing business, according to Dinanath Kholkar, Head, BFS & INS, BPO Services, Tata Consultancy Services (TCS). "Higher returns on investments, faster turnaround times and the need to reach out to emerging markets are the needs of the hour," he notes.

The outsourcing market is experiencing a radical change from the first generation lift-and-shift paradigm to today's BPO solution model, according to Richard Jeffery, managing director, Active Operations Management International (AOMi). Rahul Kanodia, CEO and vice chairman of Datamatics adds, "Today it's no longer just about cost. Buyers want you to produce value from more complex transactions. In fact, BPO providers need to scale up to the next level, which is knowledge process outsourcing (KPO) and business process management, for demonstrating value adds to their customers."
This article reveals nine of the biggest shock waves that will hit the BPO and Business Process as a Service (BPaaS) world in the next 24 months, such as:

• The move away from headcount-based contracts - BPO buyers now no longer just want to move a chunk of their back offices
• Buyers want more transparency inside the BPO process - Today's buyers are more sophisticated in what BPO should look like
• Productivity matters - There's a lot of pressure on productivity in BPO, you can also improve your costs by improving productivity through process automation
• The rise of the BPO specialist - Today companies don't want to hire a business process outsourcer that does everything
• Offshore providers are doing more work onshore - The conversation is shifting dramatically
• Regulatory pressure will continue to increase - U.S. auditors will increase their scrutiny of BPO transactions
• Social media is a new biz op for BPO providers - Social media is an increasingly relevant factor in the end-customer's decision process
• Business Process as a Service (BPaaS) is catching on - buyers like the idea of paying as they go, but they also like buying the services behind it
• Buyers are getting savvier - Which puts BPO providers under pressure