By Han Chul

Now beginning its third decade of existence, business process outsourcing (BPO) has become an accepted management practice across most companies and industries. At the same time, it is becoming a more complex endeavor, going deeper into the value chains of companies. That means the bar is being raised in terms of what companies are expecting from their BPO providers.

Accenture’s recent study found that the full business value from BPO is being realized on a relatively limited scale due to antiquated behaviors and practices. The majority, about 60 percent, are trapped in an outdated mindset that views BPO primarily as a tactical cost-reduction tool. Just 20 percent of those surveyed are classified as high performers and are fully capturing business value from their relationships. These organizations are the practitioners of high performance BPO and they demonstrate best-in-class behaviors and practices across eight areas:

• Taking a holistic approach to managing the scope of the BPO relationship. High performers consider the entire, end-to-end business process to be in scope, including elements managed within the client’s enterprise, those run by third parties as well as related processes that may impact overall performance.

• Adopting a collaborative approach to governance. Collaborative BPO governance is much more than a set of committees or a schedule of meetings; it also comprises the attitudes toward relationship and the behaviors that strengthen it.

• Making change management a priority. High performers execute carefully planned change programs to manage the effects of change during transition and beyond.

• Focusing on benefits beyond cost reduction. Both client and provider look for value beyond cost – cost reduction is important but is not the prime motivation.

• Targeting strategic business outcomes. High performers aim for specific strategic outcomes ― not just more efficient transactions ― that can be measured, such as helping clients increase revenues.

• Leveraging domain expertise and analytics. Clients look to their providers’ deep industry knowledge and ability to analyze data to more predictably drive business outcomes.

• Aligning the retained organization with the outsourced processes. High performers place as much importance on the client’s internal transformation as they place on transforming the outsourced processes.

• Using technology as an enabler. In high-performance BPO relationships, technology is a source of innovation and advantage, not just the infrastructure of delivery.

It’s clear there’s a significant opportunity for organizations to capture greater business value from BPO, adopting the behaviors and practices associated with high performance to build new competitive strengths. The research clearly shows that high-performance is not dependent on organization size, industry, geography, tenure or business function involved, makes high performance attainable for all organizations. It’s the manner in which the outsourcing arrangement is planned, established, managed and monitored that matters. Those that continue to view BPO purely in terms of transactional processing and cost will be competitively challenged.

Ph.D. Han Chul is the leader of Accenture Korea Delivery Center.