BPOs yet to attain maturity
Over the last few years, the worldwide business process outsourcing (ITeS-BPO) industry has undergone rapid transformation. Maturity of the marketplace, preceding rapid developments in telecommunications and related infrastructure, and setting up of new off shoring destinations have catalysed the growth of the ITeS-BPO industry.
The accelerated pace of industry consolidation and service convergence, has helped stabilise the ITeS-BPO market and strengthen the BPO value proposition. Given the relative infancy of the ITeS-BPO Industry, service providers have not yet reached the levels of maturity displayed by IT services companies. This has resulted in higher risk levels and consequently, there is a greater need for due-diligence. While vendors have succeeded in providing adequate infrastructure and high quality, cost efficient resources, most still lack the process expertise, systems and practices that need to be built to support customer organisations. This often demands for alternative certification frameworks / building blocks, so that clients can be reassured of the quality of service delivery.
For both customers and vendors, offshore relationships impact the formal and informal information systems. It is therefore, important for the management to create policies and practices to support dynamic business requirements. Regulatory compliance and data protection are equally important as service providers need to meet client expectations and examples of failures abound. It is imperative that customer organisations develop governance models with offshore vendors and assure that objectives, contracts, delivery models and measurements are adhered to.
The service providers need to adopt best practices through compliance/certifications in functional areas. Key certifications in the area of quality include ISO9000, COPC and eSCM. Information security practices are benchmarked against ISO27001, BS7799 and COBIT, while IT Service management is benchmarked to ITIL and BS20000. Service providers achieve control maturity through SAS70 and other attest procedures. Ergonomics and OSHA guidelines ensure employee safety. Continuous improvement in quality and productivity are important for long-term sustainability of a service provider’s value proposition. To reinforce the credibility of a process driven culture, on going evidences should be presented to clients through self assessment/ attest reports. It demonstrates the provider’s willingness to live the values and ability to effectively implement issues related to the country, region or industry.
The primary goal of certification is to improve productivity and reinforce customer confidence. Service providers often express dissatisfaction about the costs of multiple certifications. In the short term, various functional certifications may indeed add to the cost.
In the near term, various functional certifications may indeed add to the cost of at least certain types of outsourcing. Therefore, providers must carefully select certifications, ensuring that they have adequate “upfront” investment as well as the relevant skills and capabilities in place to meet the requirements of each functional area. In the long run certifications/attest report may actually reduce the cost of operational oversight, at least if service organisations think clearly and creatively on how to leverage the compliance effort. Evidence of such thinking is already appearing on the scene and it’s only a matter of time before it becomes an industry practice.
The writer is national director, risk and business solutions, Ernst & Young
The accelerated pace of industry consolidation and service convergence, has helped stabilise the ITeS-BPO market and strengthen the BPO value proposition. Given the relative infancy of the ITeS-BPO Industry, service providers have not yet reached the levels of maturity displayed by IT services companies. This has resulted in higher risk levels and consequently, there is a greater need for due-diligence. While vendors have succeeded in providing adequate infrastructure and high quality, cost efficient resources, most still lack the process expertise, systems and practices that need to be built to support customer organisations. This often demands for alternative certification frameworks / building blocks, so that clients can be reassured of the quality of service delivery.
For both customers and vendors, offshore relationships impact the formal and informal information systems. It is therefore, important for the management to create policies and practices to support dynamic business requirements. Regulatory compliance and data protection are equally important as service providers need to meet client expectations and examples of failures abound. It is imperative that customer organisations develop governance models with offshore vendors and assure that objectives, contracts, delivery models and measurements are adhered to.
The service providers need to adopt best practices through compliance/certifications in functional areas. Key certifications in the area of quality include ISO9000, COPC and eSCM. Information security practices are benchmarked against ISO27001, BS7799 and COBIT, while IT Service management is benchmarked to ITIL and BS20000. Service providers achieve control maturity through SAS70 and other attest procedures. Ergonomics and OSHA guidelines ensure employee safety. Continuous improvement in quality and productivity are important for long-term sustainability of a service provider’s value proposition. To reinforce the credibility of a process driven culture, on going evidences should be presented to clients through self assessment/ attest reports. It demonstrates the provider’s willingness to live the values and ability to effectively implement issues related to the country, region or industry.
The primary goal of certification is to improve productivity and reinforce customer confidence. Service providers often express dissatisfaction about the costs of multiple certifications. In the short term, various functional certifications may indeed add to the cost.
In the near term, various functional certifications may indeed add to the cost of at least certain types of outsourcing. Therefore, providers must carefully select certifications, ensuring that they have adequate “upfront” investment as well as the relevant skills and capabilities in place to meet the requirements of each functional area. In the long run certifications/attest report may actually reduce the cost of operational oversight, at least if service organisations think clearly and creatively on how to leverage the compliance effort. Evidence of such thinking is already appearing on the scene and it’s only a matter of time before it becomes an industry practice.
The writer is national director, risk and business solutions, Ernst & Young
posted by Manoj Jain @ 12:43 AM
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