The Operating model in platform based BPO is undergoing dramatic shifts from the traditional lift and shift BPO one and yet is a curious combination of the call center utilization driven one with the efficiency one in transaction processing outsourcing.
A traditional call center thrived on asset utilization for its operating model. The more efficient contact center service providers believed they were so, because they would use “seat”, physical and technology infrastructure as much as possible to have maximum resources per seat. The shift factor model has traditionally favored the service provider while conceding a small portion of that benefit into pricing related discounts on a per FTE basis. Shift factor, thus became the mantra for a good operating model for pure play contact center service providers.
As transaction processing outsourcing gained greater momentum across multi-geography based service providers, these service providers retained some fundamental principles of the shift factor concept. They however, had greater focus on end to end business functions, Procure to Pay, Record to Report, Quote to Cash, to create greater efficiencies for customers in these business functions. Metrics started moving from transactional metrics like TAT, quality to operations focused metrics such as AR ageing, Order Value on hold etc. There were other indirect business benefits impacting the customer in terms of reduced revenue leakageetc. These were achieved through IT enhancement, Quality framework deployment or process harmonization as cases in point. Enhanced Efficiency became the end game for a good operating model for transaction process outsourcing service providers.
Enter Platform based BPO. A platform Service Provider develops and maintains the underlying application, hosts it and runs business processes/functions on the platform. Because the service provider has a singular view of the underlying application and the business process that runs on its, the ability to affect a customer’s business function is far more enhanced compared to a traditional BPO model. In this model, the service provider, by way of having a complete view of the application and business process is able to bring in significant focus on business metrics such as cost of pay per $ million or cost as percentage of total spend.
Let us now move back to the operating models. Here is where the curious combination of the call center and transaction process outsourcing models emerges. I had earlier written about the call centers and the maximum resources per seat. The same concept applies but in a different manner. The platform operating model is built on a multi-tenant basis where multiple clients are serviced in a shared center. The focus due to this multi tenancy is minimum resources per client.
Again, because of single point of ownership of the underlying application and the business processes that runs on it, the ability of the service provider to automate and reduce the number of resources servicing the account is enhanced. Also, in a multi-tenancy model, the service provider’s flexibility to cross-pollinate resources across engagements (with maximum adherence to security and risk guidelines) allows for further utilization. Like in the transaction processing model, the ability of the service provider to bring in traditional services like spend analysis, KPO etc. that further drives the efficiency driven model. A combination of the utilization and efficiency models along with the ability to affect the business will make transformational effectiveness the mantra for the integrated IT BPO based operating model.
