Why BPO is Evolving to Business Function Outsourcing (BFO)

What are the key attributes of a 21st Century Enterprise? And what will an enterprise of the future expect from its partners? As global enterprises become powerful brands, their key challenges will be demand generation, superior growth and financial performance, margins, cash flows and sustainability. Increasingly such enterprises will need to identify and focus on a set of critical core processes and rely on trusted partners to run and manage other core and non-core processes.

BPO services have matured from being a commoditized service offering labor arbitrage and process standardization to operational excellence enabled by Lean, Six Sigma, and domain knowledge. Year-on-year efficiency gains and excellent customer service at the cheapest cost is the new normal.

Businesses are hungry to meet their goals and want more from the outsourcing partner. They want partners who can focus on outcomes such as reduced DSO, maximizing rebates, managing cash flow, better inventory management, improve up, cross-selling, etc.

Traditionally, the CRM or customer service portion of BPO work has been seen as being either “contact center” where the outsourcing partner sets up a call center facility for you or back office where non-voice transactions are delivered. If one wants to look at business outcomes, the thinking has to change. It is important that one starts looking at it from a perspective of where the outsourcing partner envisions itself not as a “call center” but as being the customer’s front office. A similar change in perspective needs to come in the back office and in another important area and yet not fully tapped area – the middle office.

With this change in mindset, the focus can shift from simple benefits like cost take-out or better accuracy or faster turnaround. The customer and the outsourcing partner can start looking at defining and achieving functional goals rather than getting bogged down with measuring metrics limited by a process silo.



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