IT plays a critical, yet misunderstood, role in BPO

LONDON, UK: Although an increasing number of business process outsourcing (BPO) decision makers understand the critical role Information Technology (IT) plays in BPO success, many continue to struggle to determine how to act on this knowledge, according to the results of a new EquaTerra market study.  The study also found that buyers in Europe and the Americas are still uncertain about how to actually account for IT solution options in the BPO sourcing and solution design process. 

These are the overall findings from EquaTerra’s third annual “Assessing the Role of IT in BPO Success” market study. Respondents to the 2008 survey included more than 250 BPO decision makers in Western Europe and North America. All respondents were responsible for HR, finance and accounting, or procurement BPO decision making in organizations with minimum £100 million in revenue operating across all major industry groups. 

The study also investigates the perceived importance of the BPO service provider’s IT solution to BPO success, and found that the average score given was a ranking of 4.36 percent, on a scale of 1-5 (with 1 being “not at all important” and 5 being “very important“) which is a 17 percent increase compared to the 2007 results. 

Also, 88 percent of 2008 study respondents cited the provider’s IT solution as being somewhat, or very important, to BPO success. 

Additionally, the most critical attributes of BPO service providers’ IT solutions is seen as a flexibility to adopt to buyer process specificities; cost-efficiency, so the provider can pass on additional savings to the buyer, and ease of use for end-users. 

The study also shows that while the majority of buyers are open to considering BPO service providers with different IT solutions, they have clear IT solution preferences and, that when entering into BPO efforts, most buyers prefer to continue using the same commercial enterprise software solutions they currently have in place. 

Stan Lepeak, EquaTerra’s Managing Director of Research said “Although IT is linked to business process performance, EquaTerra consistently finds the IT topic, and often the buyer’s IT group, under-represented in the BPO process. As a result, poor planning around IT needs and issues in BPO frequently becomes a common root cause of BPO problems.” 

Similar to findings in previous years, the internal IT group was cited by just over half of the respondents as the lead source of advice on IT issues in BPO processes. However, while 75 percent of U.S. respondents identified the IT group as a key source of advice, only 31 percent of European respondents did so. In the 2007 survey, 63 percent of US respondents cited the IT group as a source of advice, compared to 44 percent in Europe. 

While these rankings overall are positive, they still show that a relatively large number of the BPO buyers do not meaningfully include their IT group in BPO efforts.  EquaTerra asserts that BPO buyers must seek external IT subject matter expertise if they truly feel their IT group cannot provide the needed support, or if the IT group does not step up to the challenge. 

Source: www.equaterra.com