BPO, the unfulfilled promise

The adoption of larger-scale (i.e. total contract value of US$25 million or above) BPO (business process outsourcing) deals has struggled to gain permanent traction in the sourcing industry and I've been wondering why.

Theories often put forward include:

• BPO is more transformational and therefore easily deferred in tough financial times.
  
• The service providers do not actually have great solutions in many areas.
  
• It only works with good labor arbitrage and that is fast disappearing.

While to a degree all of those have an element of truth, I wonder if we really understand what is holding back greater BPO adoption.

If we look at areas where larger-scale BPO adoption has happened on a somewhat reasonably sustained basis, we see that it is mostly relatively discrete processes that can be easily segmented. In addition, they often involve a high volume of relatively mundane/boring tasks. Think of payroll, facilities management, CRM and FSO as examples.

Is BPO perhaps at a maturity level similar to applications work 10 years ago where we haven't found the right boundary points to effectively and efficiently componentize and distribute the work?

If so, once we figure that out as an industry, will we see an increased rate of BPO adoption?

• Talkback
• Print
• E-mail
• Share
• Alerts

• Are telcos new drivers of outsourcing industry?
• Deciding to outsource: Is it cultural?
• Outsourced or not, demand must be managed
• Competition heats up for outsourcing industry
• What do we mean by 'outsourcing'?

• Have we started to turn the corner?
• Outsourcing and value for money improvement--incompatible?
• The link between academia and outsourcing
• 1H09: Asia-Pacific and ITO the bright spots
• Nanjing displays leadership

2009

2008

2007

2006

• Amendments to empower Copyright Tribunal
• Don't CC me, I'll CC you
• M'sian broadband wars heat up
• Where have all the bosses gone?
• NUS Enterprise: An 'incubator without walls'

Michael Rehkopf

Michael has more than 20 years of experience in operations, strategy and sourcing covering all major parts of the globe. He has also worked for Australian, Canadian, German and Japanese companies in both business process outsourcing and IT outsourcing.
Michael's industry experience includes the financial services, manufacturing, telecommunications and travel sectors. He leverages this diverse industry experience and his university background in accounting, IT and his Master of Dispute Resolution, to assist clients in the development of business strategies and the implementation of sourcing strategies. These include the associated evaluation, negotiation and organizational change.
Michael is currently a partner at TPI, the world's oldest and largest sourcing advisory firm. Prior to joining TPI, Michael held leadership positions with Siemens Business Services, OpenPlus International, Mitsubishi Electric and Netron.