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Center of Excellence - the R&D in BPO (Part 1)

CoE.jpg

To be able to outdistance other market players, service providers have to reach to an idea used in production environments - the Research and Development units.

In today's world the physical product market value is being reduced by increasing value of services. This sector expands thanks to a growing demand for small services (valet service, restaurants) as well as corporate services, such as consulting, security or outsourcing. The growing demand for services meets with proper (or maybe even bigger) supply, which stimulates an increasing competency in the way the services are being provided. To be able to outdistance other market players, service providers have to focus on quality, procedures, as well as on a continuous, permanent development and improvement. Such situation results in the need to reach to the idea used in production environments - the Research and Development units.

Portfolio development

The Research and Development unit is often perceived as an elitist, exclusive unit to work in. It is due to the fact that people working there are one of the most creative, inventive and ingenious in the company. The future of the whole company often relies on the outcome of their work.

The main purpose of R&D units is either to create new products or to improve existing products. Many times the aim is to anticipate the customers' needs (both verbalized as well as anticipated) and to outdistance the competitors. These teams are often recognized as a motivational power for the whole organization's growth and expansion. The ideas, results of researches, new technologies and innovations give the company a competitive advantage and a major differentiator to the rivalry, which is necessary to stay in a market and achieve goals. The goal is not only related to a high level of sales, a number of new entries or wide product portfolio - it is also PR related. The ambition is to build brand awareness and position an entity as a modern, innovative company that creates the future, makes dreams come true, and is able to materialize visions that used to exist only in science fiction stories.

Parities and disparities

Should R&D focus on services as well? Service oriented enterprises should maintain a high level of sales, new entries or develop a wide product portfolio. Even though a service is not a physical product the research and development over the services they provide also has an impact on PR and branding. There is no production but still there are units focusing on the development of services offered as well as on improving their value and quality. They are Centres of Excellence (COE). 

Of course there are several differences in the ways of working and main objectives of R&Ds and COEs, but they arise mainly from the differences between the profiles (the product is defined as a physical, manufactured object, and the service - as virtual, intangible product), and the way they are being generated. Let us focus on those differences to prove that COEs are also elite, exclusive units to work in, and that COEs also give a huge value to the company.

In case of a manufacturing company, one of the most important assets are tools, machines and production lines, which produce items with a high, repeatable quality. On the contrary, the most valuable assets in the services area are staff members, their knowledge, experience and skills. Moreover, the services provided are very homogenous in nature, and thus the repetitiveness of their work is one of the main concerns.

R&D departments focus primarily on creating new products - on development and improvement, leaving the quality or improvement of the production processes to the quality or technical departments, whereas Centres of Excellence focus their attention primarily on the process improvement, and also on people development. Of course, we can assume that the service is a product, and as such, develop it using the techniques used in R&D. However in case of the service delivery it is very difficult to clearly separate the product from the process - thus there is a need to cover at the same time both streamlining and improvements.

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