Business Platforms – BPO meets Technology

Business Platforms: It is all about when and where you want to make the shift

2010-03-07T13:49:16Z

The business platform model is clearly emerging as the front runner choice for client corporations to manage their outsourced services (IT & Business Process). There is still a considered and well thought through shift which customers need to make. Continued incremental approach and getting wedded to the sunk cost is indeed a hurdle to jump over. This would need a mindset change, the ability to look ahead, see the curve coming and the ability to change lanes to make the shift without business discontinuity.

I am reminded of the elevated expressway (to Electronic City - the Silicon Hub of India) of 9kms which is now operational and is used by us

]]> to commute to work. Of course, this has significantly reduced commute time by more than 60 to 70 % while having to pay toll for the usage. The infamous hosur road below the elevated expressway has also benefitted from this as many more users are using the elevated toll expressway, decongesting the hosur road somewhat.

The analogy is very relevant as the elevated toll expressway is equivalent of the business platform model which promises speed, agility and sustenance while having to pay for outcomes or transactions. The old hosur road is like the sunk cost of legacy systems and processes which many of us were wedded to just like client corporations are to their legacy baggage.

The key shift and turning point was when the decision was taken to shift all further investments towards the elevated express toll way rather then spend incrementally on the approach of patch work expansion and widening of the old hosur road.

It is this key shift which was made 3 years back, which is benefitting multiple commuters today to electronic city (Silicon hub of India). The benefits of reduced commute time, ease of travel and pay for usage are very same principles of the business platform model. Yes, during the transition of 3 years it did seem that the life was more difficult, trying to balance the build out of the elevated expressway on the already cramped sunk baggage of the old hosur road.

It is for client corporations to see ahead, make the shift and get on to the elevated expressway of Growth & Agility leveraging Business Platforms which will also have the added advantage of easing the commute and mangement of their current sunk cost of legacy processes and systems.

Business platforms is all about making the shift and now is the opportune time…………

Business Platforms: the complete ecosystem in a box

2010-02-28T13:05:39Z

Increasingly, the organizations and clients are looking for ecosystem integrators rather than system integrators or process outsourcers. Given the need for speed and responsiveness, having a simple governance model with a single provider who plays the role of the ecosystem orchestrator is what the clients are seeking for. The Business Platform model is nothing but the complete ecosystem in a box with the managed service provider playing the role of the ecosystem orchestrator. This model facilitates the synchronization and symphony of the various moving parts within the ecosystem. The managed service provider takes the ownership for business outcomes and service levels of the entire ecosystem, and provides the added value of simpler governance & scale for supporting both organic and inorganic growth for clients.

So the new era of ecosystem in a box through Business Platforms has commenced.

Multiply your supplier collaboration effort using Platform

2010-02-15T13:15:03Z

I had an interesting comment in one of my blog entry that - we need to be cognizant of the fact that while supplier consolidation offer better negotiation power and control on supplies in addition of host of other benefits, there is another school of thought that drives de-risking of supplies by using more suppliers’. While there’s no one-size-fit-all approach while attempting supplier rationalization (read consolidation) in the present economic environment it is also important to have a rigorous supplier risk management plan in place while taking a decision on supplier rationalization. On one hand the idea of supplier rationalization is extremely effective in improving relationship with a focused supplier base and thus helping you in increasing your sourcing effectiveness, I have also seen instances where organization after consolidating its supply base continue the business-as-usual with the remaining suppliers attempts no improvement in collaboration, partnership or try to come out with a new road map and such supplier rationalization is certainly not good for organization’s health in the long term. ]]> Organizations those truly leverage supplier rationalization as an opportunity to infuse strong collaboration with their suppliers through better communication, exchanging detailed forecast, sharing product design and resolution of financial crisis are bound to achieve sustainable business value in the long term. The suppliers because now they are getting much larger pie of the business would be more enthusiastic in sharing cost issues, potential savings, capacity information, supply chain concerns and other key information that will provide far greater visibility into your potential supply risks thus helping to address the usual dichotomy between supply rationalization and supply risk. This would enable them to have an early risk warning framework in place by proactively identifying any potential supply interruptions. To achieve this end state it is important to extend the procurement technology automation to extended supply base rather than taking a myopic view by automating internal source-to-pay process only. It is important that one should continuously watch and review if the underlying procurement technology is keeping pace with changing business need of external collaboration and thus not becoming a constraint in adapting to the extended collaboration need. Technology platform on a managed services model can help organization to accelerate external collaboration automation in a smooth way and thus ensure achieving seamless sharing of supply information. Having said that depending on the strategic nature of supply, one may still want to evaluate an alternate supply after taking into consideration its criticality and business impact. For example no level of collaboration can safeguard you from natural disaster, trade barriers or adverse geo-political events.

Business Platforms: laying the foundation for the future agile enterprise

2010-02-12T07:59:36Z

As I see more clients onboard and go-live on Business Platforms [Bundle of Process, Technology (Application + Infra) and People delivered through a managed services model] – it is becoming obvious that they have in one significant paradigm shift moved from the motley baggage of applications and splintered processes of the past to a new simplified and harmonized end-to-end process, supported by a single platform and with trained people provided by a single provider.

This is like a whiff of fresh air, which will be the stepping foundation for their future success, agility and growth. To bring this to life, a recent client who moved onto the HRO platform, now realizes the significantly enhanced and empowered employee experience been created for their associates.

]]> The basic employee data like leave is enabled online, the employee is able to see their pay slips with the details (rather than having to look up the bank account for the credit). Given employee cross company movement is needed for the growth of their business, the single unified HRO platform –provides them this ability to harmonize and commonly reflect the terms of employment for the various employees, facilitating ease of cross company transfers or employee movements.

The business Platform model while being new and needing a change in the client mindset to adopt, also releases significant pain of carrying the baggage of the past. This is the True value of moving into a Business Platform based service as it frees up leadership bandwidth and provides a great spring in the step and speed to carry out the much needed business changes for explosive growth .

Business Platforms remain the key choice for building the foundation of an agile future !

Platform innovation for effective change management

2010-01-29T13:58:04Z

Imagine a situation wherein you are leaving for a business trip at a short notice for an important business event. You have checked-in at the airport, well settled in your seat for a 24 hours flight and now comfortably seated on a reclined cushioned seat with refreshment on the tray, gazing at your favorite business magazine on an article you have been yearning to read for weeks and now only you have got free time. Suddenly … a flight attendant approach you to exchange your seat with some other passenger and you are suddenly in a discomfort zone with your mental harmony completely shattered. All in all, you would require considerable effort on your part to get you back on track and get into your comfort zone again. Imagine if this change is happening when aircraft is passing through a turbulent storm and now not only your effort to settle down will be much more intensive you would also feel unsettled for a long time in a unproductive mode.

]]> This is how change management touches all our lives at some point or other and we never give it a much serious thought while trying to build a new program or initiative. Can this always predicted and avoided? Well a good monitoring can prepare organization and reduce impact to some extent but it can’t be avoided completely especially in the present situation, when there are question mark again on the economic recovery and so organizations necessarily need to build adaptability or ‘ability to react promptly and positively’ as inherent in its business DNA in today’s new dawn of global rivalry and unpredictable economy where the only thing which is constant is ‘change’.

So organization’s innate people and processes need to react much faster to any external or internal business events or disruptions. This mean the futuristic business models have to be built on a strong foundation of blended processes and technology so that they should be agile enough to incorporate change and adapt themselves with least effort in a smooth way. By outsourcing basic non-core process and technology on a hosted platform business model on a variable cost structure can enable organization to adapt and react much quickly to varying business condition because most of the change management will actually be happening on the service provider side, who have got enough expertise on these basic non-core area and thus would enable least of change management on the organization part on an ongoing basis. However organizations also need to deliberate seriously whether they are really ready for this ‘change’ and the current economic scenario is providing enought signals that the options are really limited.

Leveraging Business Platforms To Drive Higher Business Value

2010-01-22T11:10:34Z

As more market awareness, client interest and new deals start playing out in the market place for Business Platforms, it is imperative to understand that this new engagement model clearly can unleash phenomenal business value.

Some of the areas of business value unleashed by Business Platforms are:

Simplifying process, technology and people experience with an easier or robust governance model provided by a single partner
Builds the Foundation for growth, both organic and inorganic
Enhancing Employee, Supplier and Customer experience with higher empowerment & self sufficiency
Continuous benchmarking on both efficiency and effectiveness dimensions to ensure the process supported by the platform is best-in-class
Higher level of sustainability by creating significant optimization of resource consumption (e.g infra)

Overall, the Business Platform model adoption has the potential to unleash phenomenal business value to customers for sustainable growth and profitability.

Leveraging Business Platforms to become a Smart Enterprise

2010-01-08T12:59:42Z

As we march into the new year with the strengthening green shoots of global recovery, client corporations enter into their planning for this year and the next decade. Business Platforms which is the nirvana state of managed services in cloud will clearly emerge to be the new business model for the next decade.

While they are already a few early adopters for this model, we believe the rapid adoption will come from those clients corporations which are not wedded to their sunk cost. We expect fortune 300–2000 to be the pioneers in adoption of the new model. The fortune 300 will also adopt the platform model in emerging markets and geographies and in the areas where renewal opportunities come by. The business model makes the client corporation become a smarter enterprise, simplify their processes & technology landscape and enhance their agility to respond to the market opportunities.

Unified technology is vital for managing Supply Risk effectively

2010-01-06T10:06:41Z

The rapid embracing of globalization during last few decades has created an extremely profitable complex network business environment and on the other hand it has also made the global supply chain extremely vulnerable to any adverse event even in the remotest part of the world. You may ask any CPO and one of their biggest concerns today is supply continuity without disruptions and organization’s ability to manage any supply disruptions. While prevention is always better than cure, in managing supply risk you actually need a balanced combination of both. Today’s supply chain needs to be much more agile and adaptive to both external & internal events and should have the ability to react quickly to any negative signals popping up anywhere down the supply chain. With slow recovery though the number of bankruptcies have been abated and there’s an ease on liquidity, today’s global supply chain is bound to face newer kind of risks in the form of trade barriers, sustainability regulations, fluctuating currency rates, volatile commodity market etc, which mean that we need to gear up our supply chain eco-system beyond the myopic view of supplier monitoring alone. There’s also a need to evaluate supply risk from a multi-tier perceptive for any risk event at supplier’s supplier supply also that can impact our supply chain, and so access to diverse and fragmented sources of supply information is absolutely critical.]]> It’s a business imperative in today’s environment that organizations need to work much more closely with their supply base using collaborative tools and aspire to be closest to the supply base as a their top supply risk mitigation strategy so as to be proactive in capturing any distress signals in their supply chain. This of course will depend upon how integrated the underlying procurement technology is in terms of demand capturing, spend visibility, supplier transactions, supplier performance, external financial indicator, trade compliance, supplier accreditations etc. Though there’s much more matured procurement technology available now in terms of spend management system, supplier information management, analytical platform the key aspect will still lie in terms of ability to leverage this by collaborating and teaming with supplier in a structured way.

The second most important mitigation strategy has to be the continuous optimization of supplier portfolio by creating a lean supply base for driving the strategic level partnership. Having large nos of supplier will make the supplier risk management effort not only cumbersome but also difficult to manage. To rationalize the supply base it is necessary to have unified supplier data instead of it is fragmented across multiple disconnected purchasing systems. It is also important to enrich the procurement systems with necessary financial, supply commodity market information by collaborating with appropriate sources of external information.

While unified technology plays a crucial role in managing supply risk, the success factor still lies in affixing right priority to supply risk management program rather than running it as yet another strategic initiative with right knowledge and skilled folks. With increased emphasis on managing the supply continuity with lean supply base there’s a renewed focus on - how to best diagnose and manage supply risk in a structured way.

Should You Build, Buy, Host, Rent or Managed while addressing your underlying technology?

2009-12-16T12:29:15Z

The emergence of Application software during last few decades has addressed one of the most common business dilemma - ‘buy versus build’ with ‘build’ clearly becoming a default and preferred choice for most of the organizations. However this panacea was short lived and organizations grapple with yet another challenge of heterogeneous and fragment technology landscape multiplied over years. This happened especially in supply chain area where these applications are unable to communicate with each other resulting in sub-optimized underlying technology. While consolidation of different technology applications into a single & common instance is the most common acceptable approach, which however is a costly endeavor in current state of capital crunch. The recent economic downturn has also seen the fast emergence of yet another option – ‘Rent versus Managed’ riding on cloud computing wave and providing serious options to business and contemplate yet another model to keep pace with adaptive supply chain and remain competitive.
]]> Few days back I picked up an interesting convesation with a CFO of Fortune 1000 company. His view was though software/application is classified as CAPEX, unlike building or office equipment software technology applications it doesn’t have any resale value as most of the application vendors debars customer to resell their software to third party. This mean the investment and risk involved with software/application technology has to be addressed much differently than other capital investment. Further application vendors can literally force you to upgrade after certain period with logic of keeping abreast with latest version and useful life of software. The upkeep cost associated with maintenance of software also has to be adequately planned to avoid high cost of downtime. On top of this, in spite of provisioning for all the costs the business has to still keep a watchful eye on actual hard dollars benefits which many times would seek further investments in terms of expert intervention to stay course on realizing elusive ROI.

This is where ‘Rent vs Managed’ option gets interesting. While there are no large upfront investment associated with both ‘Rent’ and ‘Managed’ model along with avoidance of technology obsolescence risk, the Managed option like Platform solution clearly would provide organizations a much assured business outcome and integrated deeply into the value chain with more responsibility on the service provider side and lesser risk on the customer side.

‘Cloud services’ delivered through Platform Model

2009-11-19T12:21:27Z

The fast maturing cloud computing concept is going to disrupt and change the way organizations would use and leverage technology as a strategic tool in managing their businesses. Organizations are seriously evaluating cloud applications along with underneath computing power due to its ability to provide agile, flexible and adaptable services. In its simplest sense cloud computing will eventually involve into like simply dialing into the cloud exchange, connect with right helpdesk support & gets immediate expert response on the phone and the caller will eventually pay based on time duration. However the significant business value really lies in the bundling of business services plus cloud computing plus cloud application through a third party which will take cloud computing to the next paradigm i.e ‘cloud services’ wherein organizations would look to offload their non-core processes to providers who can deliver the cloud services in the most efficient and effective way.

While there are many different ways these cloud services can be delivered, the two main conduits are ‘Public cloud’ and ‘Private cloud’. Public cloud typically is the service which is available to everyone with a standard offering and you pay a fee based on computing power usage while Private cloud on the other hand is available to specific organization only on a platform model. For eg. not anyone can plug into to spend analytics service provider say at Infosys cloud and can buy the spend report based cloud services from Infosys. However the real test of cloud services provider would be their ability to evolve this platform model on a multi-tenant architecture. Shared infrastructure thus would not only bring economy of scale but would also be a good breeding ground in driving innovation due to its ability to get a real time access of customer behavior, business need and cross pollination of best practices within the private cloud and let organization drive non-core business processes managed through the cloud services using platform model.

Vertical Business Platform Services – Pushing the Envelope on the cloud !

2009-11-12T14:23:18Z

Even as early adoption occurs of the Traditional Business Platform services in the enterprise process areas of Procure to Pay, Hire To retire , Order to cash and Master Data Lifecycle Management, there is more opportunity and traction in vertical industry based Business Platform services.

Some of the Areas are Newspaper-in-a-box – Infosys NiAB offering which focuses on the publishing industry specific processes like circulation orders, advertising Orders and digital Orders. This is a paradigm shift for the capital starved Newspaper industry and allows them the ability to consolidate both operations and technology and also push towards more of managed shared services.]]>
The recent Infosys BPO announcement of going in for a definitive agreement to acquire McCamish Systems to Offer Business Platform based services for the Insurance Industry (Traditional and Non-traditional Life Insurance and annuities) is yet another solid example of how Vertical Business Platform services are indeed pushing the envelope – I mean policies on the Cloud for the Insurance sector.

Vertical Business Platform services is the convergence of shared service operations, Industry domain expertise, best-in-class technology and global delivery and indeed further pushes the envelope on the cloud.

Business Platforms are nothing but Managed Services on the Cloud !!

2009-10-30T14:03:19Z

The different jargons floating around in the outsourcing industry for the evolving new services model are Platform BPO, Business Services Cloud, Managed Services, SAAS, SAAS + BPO , Software on demand et al. As I had mentioned before, Business Platforms are not just bringing technology( read ERP) and BPO together, but bringing along with it a value-added layer of cloud based managed services. This means deep domain knowledge in an horizontal functional area and /or, vertical industry process area is successfully configured and encrypted on to a technology tool along with hosting of the same.]]> The value for the customer comes from the ability to get complete managed services on cloud on tap from a single service provider. The ability to benefit from significant standardization & multi-tenancy co-existing with personalization layer brought through the value added services and augmented tool layer.
For example, managing the Order-to-Cash cycle in a newspaper industry through a Business Platform model brings the power of getting managed services on cloud specific to the industry process of advertising orders, circulation orders and digital advertisement orders
Business Platform model is where a lot of value comes from a service provider bringing deep domain knowledge of the vertical industry/horizontal into action by ensuring that the technology backbone in the Business Platform offering is fully leveraged to support the end-to-end business process and any gaps are plugged with value added tool layer .This comes with the entire managed services stack (Infrastructure , application and business processing services ) serviced on the cloud.

Business Platforms is the nirvana state on the managed services cloud………

Business Platforms: Cascading Horizons in Outsourcing

2009-10-21T13:15:04Z

Over the last 2 months, through my travel across North America and United Kingdom, I experienced clients are well into concept understanding, acceptance and wanting to try out the business platform model of outsourcing. Be it a Head of Shared Services in a large retailer looking for a HR platform, or a Global Head of HR looking for an integrated core HR and payroll Business platform , or a CPO of a large European bank looking for a centralized end-to-end procurement platform, the common driving factor is all about doing more with less. It is about conserving CAPEX dollars and undertaking large scale transformation with a partner who is willing to share the risk by providing a pay-as-you-go option.

As the green shoots emerge from the current downturn, client captains simply cannot afford to follow more of the old outsourcing model and have to try newer ways of optimizing business process & technology bundled together. Business Platforms is fast emerging to be that innovative alternative model, which can help in the bounce back and in driving sustainable business value. Some of the areas of business platforms adoption are in procure-to-pay, hire-to-retire, item data lifecycle management, order-to-cash and in vertical process areas like advertising order management in newspapers, customer relationship management in retail banking, customer billing in telco and claims management in insurance.

Business Platforms is that emerging model which can help clients cascade into the next horizon of outsourcing.

eAuction is just one aspect of eSourcing strategy

2009-10-19T05:13:49Z

eAuctions erupted into sourcing scene with lots of hype later failed to live up to the high expectations, and organizations slowly realized that other modes of negotiations are equally essential as well to sustain healthy supply relationships and cost competitiveness. In many instances we have seen that the over usage of eAuctions ended into fiasco primarily due to lack of supplier acceptance and inability to cut down the cost beyond certain level. This has resulted into many organizations eschewing their eAcution tool and relook at traditional negotiation strategy like RFx, Cost model, Face-to-Face negotiations as well to drive viable & sustainable cost savings, which became important during these tough years when we saw a string of supplier bankruptcies resulting in immense supply chain risk. Having said that organizations in early stages of eAuction adoption curve, for instance in Asia region where eAuction penetration had been low due to cultural reasons, continue to reap initial success and saving benefits. Most of the eSoucing tools available in the market are pretty matured with stable functionality and differentiate very little in terms of attributes.

While evaluating eSourcing tool organization needs to consider two very important factors as well – one: Ease of use, two: Customer and training support. It is vital to keep following in mind while choosing eSourcing tool:
1.      Focus on business aspect than technology superiority: It is important to consider ‘ease of use’ and this need to be from the perspective of internal users as well as external users to accommodate change management on the supplier side also.
2.      Look for business value of feature than just availability: It’s a known fact that organizations typically use only a fraction of functionality available in any package. So the evaluation of solution should be based on business value the feature would actually be providing rather than just availability and complexity.
3.      Effective Customer Support: It is absolutely essential to have support from your eSourcing tool vendor in terms of high responsiveness and resolution of customer queries. This is a key to successfully conduct sourcing event and achieve the end objective.

Fortunately now organizations also has option of managed services for Sourcing which focuses on realized savings as an outcome rather than underlying eSourcing technology and is fast emerging as a generally accepted service model. It is typically on a gain share pricing model – a trend maturing fast in this space.

Pay-as-you-Use Pricing Model - for Managed Services

2009-09-14T10:09:34Z

Imagine a Cell phone operator instead of charging you ‘per call’, charges you based on high monthly rental irrespective of calls you make or Utility provider charges you high periodic fee irrespective of units you consume. Now after getting used to ‘pay-as-you-use’ pricing model in these areas, any other alternate pricing model is just unthinkable. As a consumer we are more comfortable and would love to pay ‘metered fee’ for the ‘service usage’ instead of just ‘service availability’. In fact much credit for the explosive growth of Telecom during last few decades can be easily attributed to user friendly innovative fee model which helped in taking telecom services closer to the mass consumers.
Platform service model is trying to emulate exactly that only by making its services available in much cost effective way for SMB segment – who often grapple with unpredicted demand and so cash flows. It allows companies to adapt to the changing external environment which could be either rapid growth or reduction in a smooth way. There are different ways evolving to define or meter the ‘service usage’ – for eg ‘$ spend’ in case of Source-to-Pay or ‘# Employee’ in case of HRO and all this make the pricing model evolution extremely challenging for managed services vendor from two aspect: One – Acceptance of pricing model plus price points by mass companies; two – Challenge for managed services provide to ensure a stable revenue. While it’s still a challenge for managed services providers to customize its services for ‘mass adoption’ and evolve an ideal ‘pay-as-you-go’ model, early drift indicates the future trend and the necessary need to come up with an innovative pricing model in this fiercely competitive services arena.