by David Poole
In the BPO industry, there’s a lot of talk about breaking down silos. However, the counter-intuitive truth of it all is that the BPO industry also creates silos.
Traditionally, BPO has been transaction-based, and limited to a specific service offering or function – like Collections or Accounts Receivable. Yet horizontal back office processes such as Finance and Accounting (F&A) and Procurement exist in every customer life cycle. As well, there are also a number of processes and sub-processes that support every customer interaction.
One of the most notable trends in the BPO industry is the palpable shift from process administration services to more value-adding activities. Clients want to reduce costs, but they also actively looking for outsourcing partners that can help them improve processes, streamline through automation and drive better decision-making insights.
Many outsourcers look to accomplish this by mining the end-to-end processes for cost reduction, process improvement and better reporting. While this can go a long way in driving that much-needed and much-touted value, it doesn’t break down the silos between the front and back office.
It’s almost impossible to separate and treat outsourced F&A processes – end-to-end or otherwise – as standalone activities in the back office as, in reality, the workflows shift from front office to back office and then back to the front office again. If you look at Collections, many times problems are a result of a prior action further up the value chain – from missing or multiple invoices, pricing issues, delivery problems or damages.
To realise our clients’ goals, end-to-end isn’t good enough. Outsourcing needs a thoroughly integrated approach. We need to act as a “common conveyer belt”, linking front office, voice-driven customer-facing activities with the back office through the common thread of the Order-to-Cash function. The key is to instead view O2C as one whole value stream.
Of course, there are challenges. Front-office employees use customer relationship applications designed to support sales, marketing, and customer service. Back-office employees use ERP applications and workflow tools to handle invoicing, accounts receivable, cash flow management and reporting. While outsourcing providers have a variety of tools and technology aimed at front and back office, they are only the sum of their parts if the outsourcer is not looking at the entire customer lifecycle.
Today, there’s a real focus on using technology as an enabler to try to eliminate the work before it’s actually offshored – and not to fall into the offshoring trap, which can often get companies into a position where they are offshoring very repetitive and low-value tasks. This is the “your mess for less” business case which has driven outsourcing for the past few years, but simply isn’t sustainable.
Many organisations are now looking to technology for cost-saving measures, but are overlooking the added benefits they could be reaping from automation. A recent ACCA report made it clear that finance leaders tend to focus on efficiency rather than value-creation.
One of the leading trends in outsourcing now is robotic process automation. However, to really leverage its full potential, a BPO provider cannot operate within the vacuum of a single outsourced function. Process automation is not a bolt-on to the status quo. It requires that we go beyond traditional outsourcing discussions, bring in stakeholders from all sides of the business and look at the complete customer lifecycle. Otherwise, automation opportunities as well as innovative new ways to drive internal process change management can, and will be, overlooked.
Lastly, let’s not forget customer experience. One of the greatest benefits of an integrated approach is to improve the customer relationship. Unfortunately, many BPO companies view customer care as a commoditised business. Many have jettisoned their customer care departments altogether, and no longer have the capacity to truly integrate front and back office functions. This is problematic for clients as the whole conversation around customer experience and customer-centric practices is just beginning to take off.
When a provider can integrate the outsourced services from order management through to reconciliation, not only will costs be reduced but also clients are able to manage their customers and the relationship they have with their customers more effectively. That complete 360-view also makes processes incredibly more efficient.
Integrated BPO is a front-to-back office solution that combines technology, advanced analytics and customer service excellence to consistently deliver measurable results that directly and significantly impact the client’s business performance.
Cost reduction is just the table stakes. Clients are looking for a foundation for better business insights, improved customer loyalty and that elephant in the BPO room, innovation. BPO providers can talk all they want to about knocking down silos, but unless the front and back offices are truly integrated, processes are segregated and clients will not achieve what they most desire – real organisational transformation.
About the Author
David Poole is Chief Client Officer at Sutherland Global Services. A leader and innovator in the BPO market, David is passionate about the huge potential of technology-enabled process management. He understands that business is changing and there is about to be a revolution in the way companies deal with and interact with their customers. David also writes for Sutherland’s F&A blog, The Accounting Minute
Originally appeared Outsource Magazine