By Preetam Kaushik
Also known as BPAAS or Business Process as a Service, the concept of platform BPO is targeted toward improving the efficiency levels in the outsourcing service delivery domain. Platform BPO services are hosted technology-based services that are delivered on the basis of a “pay per usage” model.
Platform BPO Gains Traction
During the course of the year 2011, prominent Indian service providers including Tata Consultancy Services and Infosys expanded their platform BPO offerings and initiatives. Similarly, prominent entities in the global BPO consulting segment like Capgemini and Accenture have also begun devoting more attention and efforts toward platform BPO initiatives.
Therefore, there is ample reason to carry out an in-depth analysis into the reasons for such a shift. Primarily, there are a couple of fundamental causes responsible for driving this shift toward platform BPO. First, prominent economies all over the world are shouting signs of a distinct slowdown and this has put service providers in thinking mode. They are becoming unsure of the future of outsourcing services. Naturally, there is a quest for ways to improve margins and reduce costs.
Second, there has been distinct growth in vertically specific BPO. An apt example of this growth can be found in the prevailing BFSI (banking, financial services, insurance) sector. Computing models that function on large scale through AAAS or “Analytics as a Service” possesses the potential of making them more efficient and less cost-intensive even while helping uncover opportunities that are solely data-driven. This practically explains the shifts undergone by organizations like IBM, Genpact and Accenture to platform BPO and provision of AAAS.
Third, the desire of BPO buyers to derive revenues from non-linear patterns of revenue growth has driven prominent BPO proviers to make a shift toward platform BPO. The non-linear pattern is highly significant here because when recurring costs for companies are increasing, they seek more revenues and profits via a sustained growth rate that exceeds the rate of manpower addition. So, there is a delinking of sorts of growth from manpower.
Platform BPO is Based on Outcome
The shift toward the concept of platform BPO becomes even more understandable when we start evaluating the outcomes associated with such a model. It is quite rightly described as the “outcome-based business model.” This means the payments made toward services rendered are directly in correlation to the ultimate set of benefits derived by a client from the services being rendered, rather than being based on the number of employees engaged for delivering the services and the physical hours spent on delivering them. Thus platform BPO offers an alternative route to companies seeking to improve on their revenue per unit of manpower engaged.
Platform BPO – A Look Ahead
The ultimate success of Platform BPO will depend on a host of factors like improved customer satisfaction, cost reduction, the attitudes exhibited by top market players, and even the governments of leading BPO destinations such as India, as they have a role to play in providing outsourcing contracts. And countries which were generally not considered as having the potential for propelling platform BPO trends are now emerging as key powerful players in the market.
Therefore, Chile for knowledge process outsourcing (KPO), Colombia for BPO, Costa Rica for ITO, and Uruguay for outsourced software engineering are some of these newfound destinations. The prevailing investment climate has also proved to be conducive for fresh investment pumped into these countries and also into developing economies like Brazil, enabling global players to depend on then for realizing their ultimate sustainability potential in the domain of platform BPO, making it a viable alternative.
The natural disaster that devastated Japan could also have a role to play in this. Japanese BPO providers have been increasingly investing in platform BPO through the M&A route. Southeast Asia also emerges as a definite beneficiary of the platform BPO trend due to positive market conditions in countries like Thailand, Indonesia and Philippines. Finally, the social media boom may also benefit platform BPO because of its orientation toward customer satisfaction.