About Business Process Outsourcing

Simply put, Business Process Outsourcing is getting another company to handle some of your activities for a payment. The concept made its way into the corporate world in the 1980s. Initially, payroll functions were handed out for outsourcing. Then companies included the management of employee benefits for outsourcing. It is now common place for Call Center operations, Finance and Administration functions, Accounting, Customer Service related activities and Human Resources related activities to be outsourced. Presently, activities of a company which are considered as 'non-core' to the running of the business come under the gamut of activities which can be outsourced.

Business Process Outsourcing allows companies to invest their surplus manpower, time and money, freed by the process of outsourcing, in carrying out core business functions. This helps companies to grow fast, as precious resources are not tied up in non-productive activities. It is easier to identify jobs which can be outsourced. In the process of outsourcing non-core activities, a business becomes efficient and productive. It is seen that Business Process Outsourcing frees up capital of a business, which otherwise is tied up in carrying out non-core activities. This capital can be redeployed in the business.

At this juncture, it should be understood that Business Process Outsourcing and IT Outsourcing are different. The former involves outsourcing of activities which are not the core activities of the business. Development and management of applications, Data Center Management, quality control and testing are some of the activities which come under the umbrella of IT Outsourcing. These IT related activities can be handled by service providers or IT companies.

Outsourcing contracts normally run for a long period of time and involve huge amounts of money as contractual payment. Transfers of persons working in the company on the outsourced activities to the service provider can also happen. Some of the companies which have made a name for themselves in Business Process Outsourcing are Cap Gemini, Indian companies like Wipro, TCS and Infosys, and Companies like Accenture and IBM in the USA.

A number of the Business Process Outsourcing companies are based offshore. This means that the company doing the outsourced jobs for you, carries out these jobs in another country. India, China, Russian and Malaysia are some such offshore countries where Business Process Outsourcing companies are facing boom time. Business Processing Outsourcing companies are also synonymous with Information Technology enabled services or ITES. Knowledge Process Outsourcing (KPO) is the latest concept in the business world. Those jobs which need education, knowledge and skill to be handled can be handed over to KPOs.

Some of the problems in the field of Business Process Outsourcing are the increasing reports of information on customers and internal processes of companies being sold in the open market by employees of the service providers. This creates security risks and has detrimental effects on the company which has outsourced.

With the growth in outsourcing activities, there is also a growing resentment in the USA and UK (countries which have done the maximum outsourcing) against the loss of white-collar jobs in these countries. These issues have to be sorted out along with the risks associated with Business Process Outsourcing.

What is Business Processes Management

A lot of people may know about business processes management, including those people who are running a business of their own. A business process management is often simple when you know what to do and when to do and meeting all ends in an effective manner. Thus making your client happy this will eventually create more business opportunities for you. Therefore, when we talk about business processes management you should take it lightly because even if you don't know about it, you are doing it to some extent and that is why it is important for you to know more about it so that you are able to make your business more successful.

Now, when you start a business your top priority is to get orders and deliver them as soon as possible. This does sounds a lot easier in saying as compared to actually doing it. In order to make all of this possible you have to make a lot of struggle so that you can get things done before the deadline. If you are unable to satisfy your clients you will not be to make your business successful in that case. Therefore, it is important that you must know about business processes management and to properly manage your business so that you are able to make your business successful by taking the right steps at the right time to make your client happy by delivering the right product at the right time. The business processes management is not only essential for satisfying the client but it is equally important to keep your costs and profit under control.

The whole business process should be properly managed otherwise you will not have a clue about expenses or losses. If you think that you are earning profits and at the same time your balance sheet is saying otherwise. This basically means that you forgot a lot of things that you did to get things done in time and you were not able to manage the whole situation which eventually led to the loss in your business. Things like this happen all the time in any business but with the help of proper business processes management you can control and even eliminate such cases in your business.

The easiest way to do effective business processes management is to plan all of your business efficiently so that you can have control over the minute details of your business which will help you to increase your profits.

Business Process Management

I am working as Executive Management Advisor for many years and many clients and assisted them to restructure their organisations and to develop or restructure Business Process Models (BPM). There are many typically used methods which a Business Analyst may use when facilitating business transformations and they have all got fancy, if not scary names:

. CATWOE: Customers, Actors, Transformation Process, World View, Owner, Environmental (and Regulatory) Constraints; . Five Why's; . HEPTALYSIS: Market Opportunity, Product/Solution, Execution Plan, Financial Engine, Human Capital, Potential Return, Margin of Safety; . MOST: Mission, Objectives, Strategies, Tactics; . MoSCoW: Must have, Should have, Could have, Would like to have in the future; . PESTLE: Political, Economic, Sociological, Technological, Legal, Environmental; . The famous SWOT: Strength, Weaknesses, Opportunities, Threats; . Six Thinking Hats; . Six Sigma; . VPEC-T: Values, Policies, Events, Content.

All these impressive acronyms help to describe an individual approach; the aim, however remains the same: business process engineering, which is regarded to be the backbone and most important foundation for every well managed organisation - regardless of size by the way. The optimization process requires human intervention and skilled, insightful, ideally experienced professionals.

Interestingly enough though: according to my experience the perfect analyst should not be a specialist in the actual technical or scientific process. I was once asked what I did know about food technology and I replied "basics only", but that I hoped my counterpart who was a Professor with a PHD, would be the expert in our team, as I knew nobody could beat his expertise. I am convinced that a consultant claiming to be an expert on the subject matter not only limits, it actually disturbs the project. A successful business analyst needs be able to understand each organisation, seeing the whole process flow with a neutral bird's eye view.

It is helpful to comprehend a business process as an on-going living cycle which pictures how work gets done. By identifying the particular sequence of work events across time and place, with a beginning, an end and with clearly defined inputs and outputs the analyst identifies shortcomings and saving potentials. Critically reflecting how a business works typically goes hand-in-hand with a re-organisation and can - in my experience - achieve conservatively between 10 % and 20 % savings - without hurting anybody too much.

So this is the ideal set-up: a willing, supportive client, a (group of) skilled business process analyst(s) together with internal process experts forming the project team.

But despite perfect arrangements why do Business Process Management (BPM) projects ever so often fail or at least do not achieve the expected end result? We analyse problems, suggest solutions, accompany the transformation, manage the change and when it fails we feel pointing the finger at the client: "internal politics, nepotism, ignorance, the good people left, incompetence of implementing team, resistance to change."

I won't play the whistle blower. Of course I had similar projects. I had clients who only implemented the processes they dared to change and left out the rest - no wonder the project failed. I was asked to leave prematurely and then the client made all sorts of peculiar alterations. I learned my lesson: if my name is at stake, it is of utmost importance to see the implementation phase through.

My 25-odd years' experience illustrates a more reasonable explanation for failing like this: once we leave, we barely get the chance to see our recommendations life over a period of time. Hardly ever we are hired to act as a permanent advisor; we are kept uncertain about the short, much less the long term success. Pretty much like the tax payers association; they write fancy reports where the tax payers' money is wasted and by next year nothing's really changed. The same with us: we actually do not leave an ultimate and tangible legacy behind.

What is needed? Currently I am evaluating a solution which might fix the problem, which I will share publicly, once done: a simple, reasonably inexpensive but workable solution which ensures that the processes are implemented as defined or if altered remain functioning.

How to Implement New Business Processes Without Affecting Productivity Levels

A business process is basically a collection of related tasks aimed at product or service delivery. It comprises a set of activities with specific goals and objectives targeted at value-addition in an organization. I believe you sometimes implement new business processes in your entity so as to produce more, cheaper, better, quicker and generally offer more service, don't you? At the same time, you desire to implement these new processes without retarding productivity. Isn't it so? Sometimes these two appear to be conflicting. What must you do to reconcile the two? How do you implement new business processes without affecting productivity level? Let's consider some options.

- As a starting point, good people management approaches are vital. You should understand that implementing new business processes is part of change and hence change management guidelines should be considered. Don't you think so? For example, you should ensure that there is effective communication of the new processes and various implementation aspects. Psychological readiness and buy-in by the people are important. Additionally you need to empower, involve, engage and motivate your people.

- Training your people in advance is another powerful approach to implement new business processes without adversely affecting workplace productivity. Do you appreciate the value of this approach? Without advance training and orientation you will have an uphill task. But when your people learn the new approaches before their implementation, your chance of success is very high. Won't you be glad to achieve this?

- It is said that practice makes perfect. In fact perfect practice makes perfect. Practical learning methods such as work simulation, test runs, parallel runs etc help prepare people and the organization at large. Following such methods will ensure that productivity will not lag behind once you start implementing the new business processes.

- Project management approaches such as the critical path approach can additionally guide you in focusing on the critical aspects of implementing the new processes. This approach enables you to identify and place emphasis on the critical areas of change. If these critical areas are adequately handled, your process implementation most likely will not adversely affect productivity.

- The gradual and incremental approach to new processes implementation also avoids negative impact on productivity. Don't you think so? While speedy execution is desired in organizational change processes, the gradual alternative has its advantages also. Surely you don't desire speed to totally disrupt productivity and hence business continuity while implementing change. Now, why not try a slower approach?

- What about the aspect of leadership? You need strong leaders to ensure sustenance of organizational productivity while implementing change. You need capable and good leadership to monitor the change process so that productivity does not drop. Don't you agree with me on this? Just try effecting change in an organization without competent leadership, then you will appreciate the point I'm making here. Can your leaders and managers reconcile change management and high productivity?

In conclusion, productivity is extremely vital in your organization. It affects your strategic and tactical plans, staff motivation, pricing, investment analysis etc. While implementing change in your entity, you need not forget productivity. Of course your organization will keep on changing over time. The smart approach is this - you should change for the better and without destroying the good in the past. Why not consider this in your next change assignment? You can certainly improve your business processes without reducing productivity.