HP's Laws of BPO Business Platforms, Part Two
HP’s Bob Law, is a Director in the BPO organization, responsible for the Technology platforms that support HP’s F&A, HR, Document Processing and CRM services. This global team enables the tools and processes used daily by over 25,000 HP employees and supporting over 100 HP clients. Bob has over 25 years’ experience in data/voice communications, business application development, infrastructure design/deployment/support and product engineering. With a career that spans a variety of roles from Sales through Production Delivery, Bob has a 360 degree view of the BPO business across a wide range of Industries and Business Processes.
Bob took part in HfS Research’s webinar on “The Emergence of the Business Platform”; replay available here.
We sat down recently with Bob to talk further on Business Platforms. Below is the second of two excerpts of the conversation.
Q: What are the core benefits and risks posed by Business Platforms?
Bob: Some of the more obvious benefits:
- Eliminate need for in-house IT expertise on platform tools
- Speed to implement
- Reduced capital
- Usage- or Outcome-based billing. Variablized expenses
- Access to IP
Risks in business platforms include:
- Being “shoehorned” into a non-flexible or restrictive process
- Challenge of tight integration with client’s systems (such as ERP transactions, access security/single sign-on, and metrics/reporting)
- Additional integration and management points for system changes
- Vendor instability
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Q: How should Buyers approach security issues related to a Cloud delivery model? What other risks do clients need to manage?
Bob: Basically the same approach as they would any IT outsourcing contract. While the focus tends to be on Identity and Access Management Controls and Information Protection & Vulnerability testing – the business also needs to be clear on the provider’s position on:
- Compliance & Audit Support – What the provider’s responsibilities are in supporting audit cycles – such as ISO 27001, SOC1/SSAE 16/ISAE 3402, FISMA, etc. - for the client.
- Service Integrity Approach – Virtualization and the ability to move processing and data about the cloud resources should be fully understood and the contract spelling out any limitations required based on data access/security.
- Endpoint integrity and assuring that the corporate resources remain secure while users are connected to the cloud applications.
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Q: How do you see SaaS providers impacting BPO providers?
Bob: Over time you’ll see multiple scenarios. In one, clients will directly adopt SaaS platforms for elements of their business and drive one or more of their BPO service providers to support them on those platforms. In another scenario, current staff augmentation firms will likely begin to team with SaaS providers to offer a bundled solution as they are pressured to differentiate. Finally, I see BPO providers integrating various services to their own hosted platforms and process designs which is the path HP is generally following.
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Q: Do Cloud and SaaS make Business Platforms easier or harder to adopt?
Bob: There are a few trends driving change to the economics of IT and technology in general – but not sure that it dramatically impacts the impact of process change on the client. On the progression of technology, cloud computing and availability of Infrastructure-as-a-Service and Platform-as-a-Service are certainly changing IT compute landscapes. SaaS is driving a pretty fundamental shift in the software market – and even causing Software companies to make shifts in their business models and licensing practices. So those dynamics are occurring regardless of the BPO markets and the maturation of Business Platforms. Technology is more liquid, and the move towards utility computing and utility pricing makes technology more accessible.
As to ease of adoption, at the core it’s still business process change and that is never easy.
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Q: What are the transition skills buyers need if moving to a provider’s Business Platform-based service?
Bob: Most clients have a pretty solid team and functional representation to the effort, along with relatively current process documentation. The gaps are generally around what the people are actually doing (vs. what the documentation says) and then a clearly defined approach to review and approval levels within the process, especially if the client does not use an automated workflow tool today.
Also, we often see that the most under-considered element is the impact the program has on those that remain in their roles after the transition of work to the vendor takes place.
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Q: In conclusion - what's hype and what's reality regarding Business Platforms?
Bob: Again, I’d qualify my answer to the market segments because I think some things will be reality for the Mid-Tier market, but may be more hype for the Fortune 1000 market.
For hype, I’d say that Fortune 1000 enterprises typically require more process customization based on other contracts or investments they have already made. So the hype is that because a standard platform exists, the ability to integrate global, enterprise businesses onto it is “easy”. It’s still hard work, takes time and requires both parties to be flexible and expectant of changes. Beware the suitor that does not truly understand the Enterprise business and the necessity of customization and integration. Your high volumes are attractive, but your custom needs may not be –and you’ll likely pay a premium (in both time and cost) to get those types of needs met – or have to do a lot more adapting on your side to meet the service constraints.
For reality, the existence and maturation of Business Platforms is real, and I do think it’s natural for the BPO market to move from a labor-based model to a transaction-based model as the focus shifts from labor arbitrage to automation and productivity. Clients will continue to drive their providers to that path. Clients should anticipate that this means more openness and integration with BPO provider’s systems and ultimately, the need to take a broader view to business processes and partner selections and the interdependencies become more intertwined.
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What are your thoughts regarding HP’s Laws of Business Platforms?
