Procurement should collaborate more with BPO providers

2 March 2012

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4 March 2012 | Adam Leach

Adopting a collaborative approach to governance, change management and achieving mutually beneficial outcomes is the key to getting best value out of business process outsourcing (BPO), a research report concludes.

Achieving high performance in BPO, published Tuesday by Accenture, found that 20 per cent of respondents are extracting greater value from their BPO deals than the rest. It identified eight core management actions that made high achievers stand out. These were: taking a holistic approach to managing the BPO relationship; collaborating on governance; prioritising change management; focusing on strategic benefits beyond cost reduction; targeting strategic outcomes; leveraging domain expertise and analytics; aligning retained organisations with outsourced processes; and using technology as an enabler.

The report found that 85 per cent of high performers see their BPO provider as a strategic partner, compared with just 41 per cent of those who are not high performers. Three quarters of high performers get senior leaders from both parties together to understand each other’s objectives, compared with just 33 per cent of non-high performers. In addition, 90 per cent of high performers were able to positively resolve conflicts, compared with just 44 per cent of non-high performers.

Mike Salvino, group chief executive, BPO at Accenture, said: “The results indicate that BPO arrangements deliver greater business value when the client and provider engage in deeper relationships and leverage practices that drive high-performance BPO.”

The report said: “Until recently, companies were looking for something relatively straightforward from a BPO relationship: greater efficiency, streamlined operations and lower costs. Today, companies expect more: business insight, innovation, industry expertise, solutions adapted to more individualised needs, a commitment to continuous improvement and more.”

The Everest Research Group and The Outsourcing Unit at London School of Economics conducted 263 surveys and 20 in-depth interviews with Accenture clients to form the research.

 

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