Strategic CIO // IT Strategy
Commentary
6/13/2005
06:11 PM
Paul McDougall
Paul McDougall
Commentary
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Effective BPO Deals Require Partnering

Business process outsourcing is about more than just saving money. Sure, a good services agreement from a reputable provider should yield cost savings around billing, HR administration, accounting or whichever process your company has handed off to a third party. But most buyers of BPO services are getting much more than that, a new survey shows.

Business process outsourcing is about more than just saving money. Sure, a good services agreement from a reputable provider should yield cost savings around billing, HR administration, accounting or whichever process your company has handed off to a third party. But most buyers of BPO services are getting much more than that, a new survey shows.73% of buyers of BPO services say their business processes have actually improved because of outsourcing, according to a survey of 200 companies conducted by InformationWeek Research, in conjunction with CMP Media's Managing Offshore newsletter and outsourcing advisory firm EquaTerra.

One company using BPO services to good effect is Blue Cross & Blue Shield of Rhode Island. Working with Perot Systems, the insurer has decreased its claims inventory by 40% in the past six months. Meanwhile, Pfizer Inc. has improved reporting, recording and quality assurance in some call center operations by turning them over to Telerx.

Execs leading their company's BPO efforts aren't getting these kinds of results by accident. Rather, they're ensuring that their vendors go above and beyond basic SLAs by forging with them partnerships. "We have to help Perot solve the business problems so we can drive our strategy in the community," says Brad Weaver, an assistant VP of operations at BCBS Rhode Island, in an interview with my InformationWeek colleague Jennifer Zaino for her feature, Letting The Process Go.

This partnership approach is good not only for BPO buyers, but also for services vendors. As more companies are able to benefit from BPO services, sales of such services will increase. It's already happening. Nearly half of the respondents to the InformationWeek BPO survey said they planned to spend more on BPO services this year than they did last yearâ€"proof that performance pays off.

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