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BPO: A Transformational Strategy . Chuck Clement, Andesa Services Rob Mattioda, The Life & Annuity Group, Inc. Definitions.

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bpo a transformational strategy

BPO: A Transformational Strategy

Chuck Clement, Andesa Services

Rob Mattioda, The Life & Annuity Group, Inc.

definitions
Definitions
  • DEFINITION: Business Process Outsourcing occurs when an organization turns over the management and optimization of a business function, such as accounts payable or purchasing, to a third party that conducts the activity based on a set of predetermined performance metrics. – Computer World
  • DEFINITION: - Transformation a : to change in composition or structure b : to change the outward form or appearance of c : to change in character or condition: - Webster’s
  • Trend: BPO Market will grow to 146 billion dollar industry by 2008 - Forrester
business objectives today are
Business Objectives Today Are

Increase Share Holder Value

Time To Market – New Products

Cost Containment – Delivering Lower Unit Cost

Processing Flexibility That Adapts to Business Direction & Strategy

IT solutions That Support And Deliver The Business

Adding Functionality Without Complexity

Growth – Organic and Mergers & Acquisitions

* Have These Really Changed Over The Years?

business transformation
Business Transformation
  • Transformation Is About Change, It’s About Business Improvement
    • Better Delivery – Products & Services
    • Better Processes – Streamlined & Clean
    • Lower Costs – Business & IT
    • Greater Flexibility To Grow The Business
    • Consolidation – Fewer Moving Parts
    • Increased Share Holder Value
  • Business First – Technology Second
the legacy transformation value triangle
The Legacy Transformation Value Triangle

Application Software Platform

Time to market improvement

Consolidation = lower maintenance costs

Enables process improvement

Legacy /

Business

Transformation

Business Processes

Time to market improvement

Increased productivity

Lower cost per policy

Labor Costs

Greater degree of automation

Lower effort per transaction

Less training / fewer resource management issues

Outsourcing (BPO)

bpo is a transformation strategy
BPO Is A Transformation Strategy
  • Transformation Is About Change, It’s Not Repeating Or Replicating Today’s Limitations & Issues
  • BPO Is Transformation
    • Delivers Better Processes – Facilitates Today's Business Objectives, Best Of Breed
    • Delivers Modern Applications – No More Piecing Together Disparate Packages
    • Delivers End To End Well Configured Components – Common Look and Feel Across All Products
    • Delivers Time To Market and Lower Cost
why bpo as a transformation strategy
Why BPO As A Transformation Strategy
  • BPO Is a Bundled Approach To Transformation – Processes, Technology, Service & People
  • Legacy Applications Are So Intertwined Within A Company’s Infrastructure That Change Becomes More Difficult And More Expensive
  • BPO Strategy Focuses On Core & Non Core Functions By Bundling Technology, Business Process Improvement, Re-Engineering And Productivity Improvements Implemented As A Program In One Box
  • BPO Transformation Is A fundamental Change From Legacy Business Problems And Legacy Applications To Best Of Breed Business Processes And Modern Technology Platforms
conventional bpo vs transformational bpo
Conventional BPO Vs. Transformational BPO

BPO Transformation

Conventional Outsourcing

Business Focus – Business Driven

Operations and Technology Focus

Benefits Derived From Labor Arbitrage

Process Improvement – Creates Value – Labor Arbitrage

Isolates – Delivers Some Degree Of Control

Deliver Confidence – Manages Risk

Modern Business Re-Alignment, Technology & Services

Executes Legacy Business Processes

Delivers Higher Performance – Specialized Company

Delivers Higher Performance & Economies Of Scale

Reduces Non Core Functions From The Business To Provide A Single Release Of Capitol

Business Transformed Enabling Sustained Savings & Sustained Value

bpo transformation
BPO Transformation

BPO Transforms When:

  • You Derive Value From Every Aspect Of The Business – Not Just An IT Solution
  • Deliver The Business Consistently Across Products – Fewer Resources Required
  • Business Processes Align With Business Objectives
  • Legacy Maintenance No Longer Stifles Business Growth
  • Business Results Are Improved

BPO Is Less Effective When:

  • Outsource The Business, Focused Only On The Savings From Labor Arbitrage
  • Haven’t Driven Savings From All Aspects Of The Business
  • Replicate The Deficiencies Under The Management Of Others
  • Viewed As A Technology Solution
  • You Haven’t Positioned Your Business For Growth And Business Results Are Not Self Evident
bpo transformation components
BPO Transformation Components
  • Business Processes
  • Strategic Outsourcing
  • Technology
  • Infrastructure
  • Methodology
  • Systems
  • People
  • Management
  • Value
  • Cost Containment
business growth through budget transformation
Business Growth Through Budget Transformation
  • The Current Budget Paradigm Does Not Support Growth
  • Budget Dollars Are Consumed By Maintaining The Business

Amortization Expense

10%

Discretionary

Spending

20%

Application Maintenance

70%

transformation effects
Transformation Effects

Implement

BPO

Consolidate

Legacy Apps

Improve

Process

Re-Direct

Resources

Labor

Arbitrage

Maintenance Budget