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BPO: A Transformational Strategy

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

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BPO: A Transformational Strategy

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

  2. 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

  3. 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?

  4. 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

  5. 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)

  6. 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

  7. 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

  8. 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

  9. 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

  10. BPO Transformation Components • Business Processes • Strategic Outsourcing • Technology • Infrastructure • Methodology • Systems • People • Management • Value • Cost Containment

  11. 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%

  12. Transformation Effects Implement BPO Consolidate Legacy Apps Improve Process Re-Direct Resources Labor Arbitrage Maintenance Budget

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