Insights from this Year’s IAOP Outsourcing World Summit, by Michelle Stephens, COP

I recently had the opportunity to attend the 20th annual IAOP (International Association of Outsourcing Professionals) Outsourcing World Summit held in San Antonio, Texas.  It always brings back fond memories of the network of friends and colleagues I’ve met and stayed in touch with over the last six years through IAOP Summits, chapter meetings, conferences and certification training classes. Regarding the latter, I am proud to have obtained my COP (Certified Outsourcing Professional) designation in 2011.

With the conference fresh on my mind, I’d like to share some insights on how IAOP has helped me develop a strong understanding of the structure and steps for implementing successful business process outsourcing projects, which in today’s environment must include a strong information governance framework.  I am very fortunate to have worked for over five years on the client side at a large P&C insurance company, spearheading the first of several outsourced offshore and onshore start-up engagements.  For the past six years I’ve worked on the provider side of the insurance industry implementing a variety of managed services projects. This hands-on experience, along with my education at IAOP, has enabled me to understand critical issues from both the client and provider perspective.

While I am currently an Insurance Solution Advisor working on the provider side, my background enables me to wear a client “hat,” providing my colleagues with suggestions that can help them understand the inner workings of potential insurance clients who are interested in using our services and how to best address their needs.  I also understand the importance of a strong governance framework from the client’s standpoint. This means I can help clients improve processes through an integrated service delivery model—leveraging and transitioning relevant work to onsite, offsite and offshore business processing centers—while deploying advanced technology where appropriate to generate results such as increased processing volumes and cycle times combined with reduced operating costs.

Because of my diverse experience, I couldn’t agree more with the message on the welcome page of the IAOP January/February 2017 issue of Pulse magazine, which we received at the Summit. CEO Debi Hamill stated:  “While robotics, artificial intelligence, digitization, crowdsourcing, and other technology trends are examined in depth throughout the Summit, core topics such as governance, contracts, negotiations, innovation and creating value are as important as ever in the program lineup.”

With that said, I suggest insurers keep in mind that value should be created via technology as well as through governance models and innovation.  For this and other key business reasons, Canon Business Process Services (Canon) offers a dedicated team of skilled experts who visit clients and implement a specialized, onsite Business Process Assessment (BPA).  This approach enables me and other Canon specialists to team with clients and listen as they share existing operational pain points and business challenges their organization is facing.  We can perform an in-depth analysis that looks at existing processes with an eye toward recommending and implementing solutions designed to improve and streamline workflows.

View our webinar to learn more about conducting a BPA.  Additionally, feel free to visit the Insurance Services page of our website for more insights on industry trends and best practices, including white papers, case histories, research reports and more.
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This blog was originally posted on Canon's website.
Michelle Stephens is a Certified Outsourcing Professional (COP), and the BPO Advisor, Insurance Solutions, Canon Business Process Services, Inc.

Blogging from IAOP’s 20th Annual Outsourcing World Summit in San Antonio by guest blogger, Steve Sheahan, IBM

IAOP held its 20th annual conference Outsourcing World Summit 17 in San Antonio, Texas from February 19-22. The theme of this year’s conference was Harnessing the Power of Disruption and the local weather cooperated to underline the theme by sending a tornado across San Antonio on Sunday evening after most of the participants arrived. No harm done to the Marriott Hill Country resort that was this year’s spectacular venue but a reminder that all of our business conversations now take place in the context of rolling technological, social, and political change.

I wore two hats at this event; first, as a member of the IBM delegation with our Abbvie client and the powerful story of how we created a financial infrastructure for that new company with an 18-month, complex global deployment of a Finance Infrastructure solution; and second, as a Co-chair of the Atlanta Chapter of IAOP at the conference with several of our members to promote our 2017 webinar series and expand our mailing list of friends of the chapter which includes IAOP members outside of the Atlanta area. In between breakout sessions, I split my time in the Exhibit Hall between the IBM and Atlanta Chapter Booths.

IBM is a corporate member of IAOP, which has grown steadily in its 20-year history to become an active network of more than 40 Chapters and a growing presence here and outside the United States. Twenty years ago at the first OWS, the Association welcomed 150 delegates and at this year’s event in San Antonio, it hosted more than 700 delegates from 40 countries. The Association “with collaboration at its core” maintains a membership body composed of outsourcing providers, analysts, and customers and the interaction among those core constituent groups keep the dialogue energized and relevant.

Prominent participants in this year’s conference included IBM, Deloitte, Accenture, ISG, NeoGroup, Avasant, KPMG, Microsoft, Genpact, Abbvie, WGroup, Infosys, Bristol-Myers Squibb, Humana, CapGemini, and HCL.

Some highlights from sessions I attended follow.

Chapter Chairs Session
Leaders from chapters from all geographies met to exchange current issues with a focus on how the organization can enable successful chapters. One key outcome of the conversation: we identified the common challenges of 1) growing membership and 2) growing an outsourcing practice in the context of the political uncertainty affecting both the U.S. in the early days of the new administration and Europe in the aftermath of the Brexit vote. The idea of exploring item number 2 in a global webinar and using that event to generate interest from prospective members (thereby addressing item #1) was raised (by me) and the Atlanta Chapter will sponsor the event which will be planned for the April time frame.

Provider/Advisor Topics
This session, which excluded customers, was designed as a series of small group discussions of topics that were rotated every 15 minutes. The group I was in elected to remain intact throughout the session with just one or two new people joining the table at each 15-minute interval. We had representation from the U.S. and Europe, providers, advisors and academics.

Topics included:

• How to work Agile in combination with fixed price/fixed scope/fixed date terms? Discussion ranged across contractual remedies and how to cultivate customer expectations that were aligned with Agile vs. Waterfall project methodologies. Disciplined governance (both between client and provider and within the client company) was identified as a critical success factor regardless of the methodology used.
• With the maturation of outsourcing there are fewer greenfield situations. This can result in more renewals being structured in a sole-sourced context. What should providers and advisors do to ensure appropriate and fair deals? Participants’ experience suggested that many renewing contracts are rebid and that, while norming the price is offered as the business reason, a rebid always suggests some level of client dissatisfaction apart from financial terms. Answers to the topic question included commitments to benchmarking and the use of TPAs to ensure that current market standards are reflected in renewing contracts. The group discussed the importance of rigorous client satisfaction monitoring throughout the term of an agreement to prevent a rebid. When a rebid is a real possibility the providers at our table suggested adding value to an existing contract by expanding the scope or engaging in collaborative solutioning to resolve client challenges in areas that may fall outside of the original scope.
• Participants elected to work on a topic the group identified and – as was the case in nearly every session I attended, regardless of the topic - people wanted to discuss the potential effect on the industry of policies that could emerge from the new American administration that could affect the industry. Participants were quick to note the potential gap between the media noise about the issue and the ultimate emergence of actual policy proposals and their chances of being enacted as laws or regulations. But the group also discussed the influence the noise alone can have on clients who become reluctant to enter into deals whose terms might be subject to scrutiny or the cause of negative public attention. 

I found this to be a well-structured session. The topics were well selected and written concisely in a way that invited a range of responses. The ability to move from table to table allowed one to access different viewpoints.

Keynote Address – Kaihan Krippendorff
Although I generally have a high degree of resistance to ‘motivational’ speakers of any kind, the former McKinsey analyst, Kaihan Krippendorff delivered an engaging keynote address. He drew his material from his current book, Outthink the Competition, which aims to deliver practical guidance for those who seek to think differently in order to achieve competitive breakthroughs that change the client conversation.  He began with a general treatment of how difficult it can be to advance a new approach to anything and the value of persistence in the face of resistance, citing a quote from Gandhi: “First they ignore you, then they laugh at you, then they fight you, then you win.” He proceeded to cover principles of disruptive competition that included Creating Something out of Nothing (example was a furniture manufacturer who sold his goods via multivendor furniture ‘fairs’ which were common in Scandinavia who was excluded from a fair by his competitors and decided to create and own his own ‘fair’ which became the first IKEA store) and Force a Two-Front Battle with your Competitors (examples were Amazon entering web services and Ali Baba redefining itself as a data company and the lesson was to not define yourself by your industry).

Futurism
A number of conversations and sessions touched or focused on the future of the outsourcing industry with the buzz focused on the disruption caused by new technology (digital, RPA, AI) driving the creation of new solutions, which in turn depend upon accelerated delivery and give rise to new organizational forms (the “Liquid Workforce”). The only thing tempering the excitement was the thoughtful pause of the practitioners who are rightfully concerned about minimizing the breakage that disruption can produce. And the best discussions were the ones that didn’t stop at the ‘Cool’ response but proceeded past it to consider how the digital revolution underway might call on us to create ways to conserve affected human resources and strengthen customer relationships.

The “Liquid Workforce” concept – the dawning era in which most of us are projected to be casually employed as contractors with our relationship to our ‘employers’ mediated entirely by digital tools - is a provocative idea begging for a fuller treatment by Human Resources visionaries and social scientists than could be included in the sessions I attended.  While one can see how such a model would deliver benefits to Capital in the form of reduced expenses – one is hard put to see how it would satisfy all of the needs of Labor which many recognize as encompassing more than the receipt of a check. The thin construct that it delivers freedom and flexibility to workers is questionable. But you could test this with your next Uber driver.

Global Impact Sourcing 
The two events I attended on this topic were, for me, the most engaging sessions I participated in. The first, a session on the Role of Impact Sourcing in Global Site Strategy, was a lively discussion led by Jon Browning, President of BPO Solutions.

Impact Sourcing is the term applied to an inclusive business practice that intentionally targets for hire those populations which, by virtue of their geographic location or socio-economic circumstances, have limited prospects for sustainable employment. The discussion pointed to the 50% unemployment rate among college graduates in Africa and the 33% unemployment rate among youth in Detroit as target populations. Other target populations include Native Americans and military spouses. The case study success stories presented were compelling and the business case argument – that the significantly lower attrition rate of workers drawn from the target populations more than offsets any additional ramp-up costs - was well defended.

There are obvious benefits to the outsourcing industry – currently under growing pressure from developed, self-protective economies – to invest in a range of initiatives that conserve human resources. And there is a certain pleasing symmetry in the idea that the digital revolution that has driven the disruption to so many workforces is the same force that enables work to be performed by a larger family of workers in a greater range of circumstances and geographies.

This session made a strong case that work being done in this area will grow in importance as we rapidly apply the lessons learned by its pioneers and that it deserves more attention from the industry.

GISC – The Global Impact Sourcing Coalition
I attended a breakfast meeting that featured a presentation by Sara Enright, Manager of Advisory Services at BSR, an NGO with 250 member companies that provide thought leadership and advisory services in sustainability.

BSR, with sponsorship from the Rockefeller Foundation, leads a collaborative initiative between buyers and providers called the Global Impact Sourcing Coalition. The Coalition seeks to increase the uptake of global sourcing practices in the supply chains of multinational companies and their vendors and to contribute to the body of knowledge that corporations can draw on to understand best practices and manage their own initiatives more effectively. The initial focus of GISC, which was formed in 2015, is to scale Impact Sourcing in the global BPO industry. IAOP, which has a longstanding commitment to Corporate Social Responsibility, is an Associate Member of the Coalition which has grown to include 30 members.

This was a lively discussion with a highly engaged audience which included representatives of companies who described their successes with Impact Sourcing. I found particularly intriguing the idea that target populations can include the long-term unemployed and the growing population of workers who are ‘informally’ employed. This pointed to a potentially effective way to advance the practice of Impact Sourcing in a BPO context, even in political economies that are drifting towards more protectionist policy proposals. Policy makers who misunderstand outsourcing or underappreciate its potential for contributing to sustained economic growth should be a key audience for the research results that the GISC will be communicating.
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Steve Sheahan is a Sales Integration Executive at IBM.

Growth Through Nearshore Delivery — Delivery Through Scalable Talent by guest blogger Patrick Corcoran

Back in December 2015, I experimented with my first LinkedIn profile-blog post. Given that I was in a bit of a nostalgic mood for golf and had a lot of travel to Central and Eastern Europe under my belt, it was time to crack the ice and author a piece on the infamous “nearshore delivery model,” which has been and will continue to be accepted as par for the course – despite my solid ability to maintain a bogey-level golf handicap!

I am now sitting on the train in December 2016, traveling from our founding office in Moscow to our historic office in St. Petersburg, so I think it’s prudent to reflect upon why this matters. I will start by offering you a very relevant quote from Sir Richard Burton, in which he said, “Of the gladdest moments in human life, methinks, is the departure upon a distant journey into unknown lands.” We all can agree that India has been looked at many times by the vast majority of firms studying IT services, but we can also agree that only a small fraction of them have taken a look at Central and Eastern Europe – until now.

Luxoft has taken the lead when it comes to introducing global analysts and advisors to our centers in Kiev, Odessa, Krakow, Wroclaw, Moscow, Bucharest, in addition to, Stuttgart, Sydney, Singapore, Guadalajara, and Ho Chi Minh City. This has been the largest contribution to our grand strategy of thought leadership – not just a focused white paper discussing emerging topics like Blockchain or Big Data, but a strategy that’s focused on bringing to light the phenomenal IT professionals and the “availability of scalability” in these countries as well as the experienced and knowledgeable delivery teams that set us apart from other countries supporting outsourcing delivery.

As most outsourcing professionals are aware, and some even currently engaged with their growing “business units” within the enterprise – across all verticals – have been, and increasingly are involving themselves within sourcing recommendations, and ultimately vendor and/or strategic decision-making for their respective units, and in some cases across the entire organization. Because of the need to satisfy business units in a shorter time frame and provide a faster return on investment, nearshore has become quite important for the overall delivery of resources. 

Areas like this include less travel time between client and delivery locations and less time zone differentiation between client and delivery locations. Depending on the geographic region, there are cultural and historic similarities between both buyers and providers, which aid in areas from requirements elicitation to flexible delivery coordination. Most importantly, there are very strong Tier-1 and Tier-2/3 cities with a history of university education within relevant fields (computer science, mathematics, linguistics, etc.) that have created and continue to create very talented IT professionals who are ready to contribute to leading-edge technology work. 

In line with the business unit expansion of purchasing services (which requires domain expertise), there is a growing demand for consulting. Consulting can have many different definitions and styles of execution. Let’s assume it’s an aspect of the overall implementation of outsourcing services in two areas – technology and business. In cases where the client’s business unit has very little to no understanding of technology, the technical advisory role is important to help a client map and construct a strategy that will ultimately drive delivery execution. This is quite difficult to do when many of the aforementioned benefits of nearshore are not applicable. In some cases, consulting requires a much more detailed involvement with clients before the execution actually begins. 

It’s easy to argue that the same model applies on the business consulting side, but in this case, it’s not the absence of knowledge that matters but rather the verification and gaining of objective opinions on the strategy. In combination with the growth of business-unit purchasing and important consulting services, the question centers around what kind of services are primarily focused on in nearshore discussions. 

In many cases, the work is very Agile intensive as well as middle and front-office-dominated, and dependent on digital and customer experience as well as ERP integration and Mode-1 transformative efforts – in other words, the work should not be viewed in classic “black and white” modes. There is a great deal of interconnectedness between each mode, which can benefit greatly from nearshore adoption. As the business grows and demands increased collaboration from its central IT organization, this will continue to be a large part of the growth in nearshore, consulting, and the adoption of Mode-2-like services.

Our growth as a provider has been fueled by delivery, built upon exceptional IT talent and personal passion in the technology and business worlds. Our door is always open, and the transparency of who we are will continue to drive our success. Do not fret readers, we can scale, too!
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Patrick R. Corcoran is the Global Director of Analyst and Advisor Relations at Luxoft and is also one of the Co-Chairman of the IAOP NY Chapter. Prior to joining Luxoft, Patrick worked as a Global Account Executive for the International Institute for Learning; Consultant with the Public Affairs Council; Teaching Assistant and Research Associate at The Catholic University of America; and was a Visiting Researcher with former ZA President F.W. de Klerk at his foundation. He holds an MA of International Relations from The New School and has an extensive publication, interview, and podcast track record. He also enjoys travel, golf, and cooking. On a side note, Patrick also worked for about nine years at King Kullen (still family owned) and recognized by the Smithsonian Institute as “America’s First Supermarket.”

Put it in Writing! Why the Contract is Key to Enabling Innovation Through Managed Services by guest bloggers Doug Plotkin and Joe Greiner

As the outsourcing industry continues to evolve and mature, customers will continue to demand more from their managed service providers (MSPs)—particularly in terms of delivering value above and beyond the terms of the agreement. These expectations include finding new ways to deliver services more efficiently and to help their customers gain a competitive edge, whether the contract stipulates innovation as a responsibility or not. Customers frequently complain that their vendors simply do not bring innovation to the table, meaning they don’t “think outside the box” and fail to proactively address issues or problems. In addition, customers often perceive their MSPs as being unable to think strategically or offer solutions to address fast-changing business challenges.  Indeed, nearly 46% of the respondents in the 2016 Deloitte Global Outsourcing Survey (GOS) cited being “reactive rather than proactive” as the biggest frustration with their MSPs, while 33% cited “lack of innovation” as the primary issue.

Source: 2016 Deloitte Global Outsourcing Survey

MSPs often counter that they do invest time and resources in innovation, but customers don’t respond to their efforts, either letting their ideas sit idle in underfunded project queues or failing to reward them for the added value they contribute. According to the Deloitte GOS results, 29% of customers primarily motivate their MSPs to innovate through positive messaging, while 21% expect them to innovate without any additional incentives. Clearly, there is great disparity in relationship expectations.

The gap between what customers expect, and what service providers actually deliver, highlights the essence of what innovation is NOT: simply maintaining the status quo. With the emergence of disruptive technologies, such as autonomics, artificial intelligence, digitization, the Internet of Things and cloud services, customers cannot afford to wait for service contracts to expire to transform their service delivery models. And, given increased competition and declining switching costs, MSPs cannot wait until contract expiration to infuse innovation into their customers’ environments. Differentiation via innovation is a critical tool on both sides of the relationship, being used to gain competitive advantage on the one hand and retain customers on the other.

Define innovation

While there is no silver bullet for bridging the gap between expectations and delivery, customers can take some steps to communicate their desires more clearly and to codify the responsibilities of the MSP in delivering innovation. The first of these steps involves clearly articulating what innovation means.

In our view, innovation can be defined as a change to an existing process or technology resulting in measurable customer benefits. These benefits can be qualitative (e.g., improved end user satisfaction or increased business agility) or quantitative (e.g., increased throughput or lower costs), but they must be measurable in some way. Some innovations require investments (e.g., new technology) to produce customer benefits, while some require transformation (e.g., process engineering), while still others may require only subtle changes.

Importantly, innovation is distinguished from productivity gains in that it requires a fundamental change to a process, whereas productivity gains require performing an activity with the same throughput but with fewer resources. Innovation also differs from continuous improvement, where a process or service is completed in the same way but at a higher level of quality. For instance, MSPs traditionally extend continuous improvement benefits to their customers by improving their service-level metrics year over year.

Several developments have recently emerged within the managed services market that meet the aforementioned definition of innovation. These include “as-a-service” offerings (i.e., Software as a Service, Infrastructure as a Service, and Platform as a Service) and public or private cloud services. Through these innovations, many MSPs have developed standardized service bundles, which help their customers to simplify operations and reduce total cost of ownership.  Other innovations that MSPs now offer to enterprises include increased use of robotics, analytics, cognitive intelligence, virtual workforces, and software-driven infrastructure—all of which can help to simplify operations, increase financial flexibility, and enable on-demand services consumption.

Additionally, MSPs can define or influence customer experiences through innovations such as wearable technology, the internet of things, mobility, exponentials, and social media. After all, when a customer calls into a contact center, she is often speaking with an MSP representative. Similarly, when an outage to a website, web portal, or mobile application occurs, MSPs are usually involved as well—either as the cause or the solution, or both.

State your expectations

To improve business outcomes and service operations in this environment, agreements with MSPs should be structured not only to define what is meant by innovation but also to specify expectations around it. The foundation of a healthy relationship between a customer and an MSP starts with the quality of the agreement. But, according to the 2016 Deloitte GOS, only 21% of respondents discuss innovation as part of their managed service agreements. Traditionally, these agreements do not enable customers to explicitly benefit from innovation, since the language around it is typically vague and does not articulate specific goals and metrics.

Today, an opportunity exists to improve these agreements, bringing together customers and MSPs as partners in innovation. To get started, customers can:

Source: 2016 Deloitte Global Outsourcing Survey

• Establish an innovation agenda for the service delivery organization in support of the overall corporate vision, and confirm whether current MSP agreements align with it
• Establish innovation objectives in conjunction with your MSPs with the innovation agenda in mind
• Incorporate jointly developed objectives and supporting “innovation language” into contracts
• Develop methods for measuring innovation success
• Collaborate with existing MSPs to determine innovation-driven incentives and penalties
• Work with your MSPs to identify some desired “blue ocean” innovations that could give both parties a competitive edge and that would be worth the additional risk
• Regularly track performance against innovation objectives, using metrics such as:

o   Number of ideas generated or business cases developed

o   Percentage of ideas converted into successful service enhancements

o   New and/or incremental revenue generated through service innovations

The bottom line

The marketplace is constantly evolving. To keep pace with it, both customers and their MSPs should harness innovation to improve operational efficiencies, drive cost competitiveness, and improve business outcomes. To achieve these goals, both parties should come together within the context of the contract, articulating implied expectations and agreeing upon what it means to be successful in delivering innovation.

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Doug Plotkin is a Managing Director with Deloitte Consulting LLP

Joe Greiner is a Manager with Deloitte Consulting LLP

Why BPOs are Turning to the Cloud to Provide Flexible and Scalable Contact Center Offerings by guest blogger Jacki Tessmer, VP of Service Provider and Cloud Strategy, Enghouse Interactive

As companies’ omnichannel customer experience demands increase, savvy BPO (business process outsourcing) providers are turning to the cloud to provide flexible and scalable contact center offerings.

According to the latest CEM (customer experience management) research from Aberdeen, the top two themes keeping CEM executives up at night are:

1. Customers are empowered with a wealth of information on many competitive products and services (indicated by 50% of respondents)
2. Customers expect consistent experiences across all channels (indicated by 32% of respondents).

These concerns weigh heavily on organizations, especially when it comes to making decisions about their contact centers, which play a critical role in the customer experience. Legacy contact centers have fallen out of favor with CEM managers as they recognize that today’s consumers regularly communicate on multiple channels, from different devices and expect flexibility as well as a personalization of their interactions with the businesses from which they purchase products and services. This sentiment is becoming especially evident in the contact center outsourcing industry, which has long been known for experiencing greater provider churn than other outsourced business processes. According to research from outsourcing consultancy Everest Group, the churn rate for contact center outsourcers increased from 33% three years ago to 50% in more recent years.

So, the big questions are what is causing this growing dissatisfaction with outsourced contact centers and what can be done about it?

Discovering the underlying reason for the high churn rate is likely found in the greater expectations consumers have of their interactions with businesses. These higher expectations lead to an increased demand on contact center BPOs to meet the end customer’s expectations and to provide the type of experience desired.  Their clients are no longer content simply with lower costs; they want engagements that drive business outcomes. BPOs need to enable agents to more intelligently engage today’s empowered customers and to offer an excellent experience to their clients’ customers across all channels.

What Aberdeen found in common among businesses that were able to overcome the challenges impacting customer experience programs was their ability to leverage customer data to create a unified view of the customer. This is a vital capability as it provides all contact center agents with the complete picture of the customer, which makes it easier to deliver consistent messages across all channels. This is the first step in creating an omnichannel customer experience, which is defined as enabling the end customer to have a seamless sales or service experience with an agent via call, chat, or email from any device. BPO companies that get omnichannel right are more likely to achieve the ultimate balance of improving the customer experience; increasing revenue, customer retention, and operational excellence; and reducing costs.

Most BPO providers would agree with analysts about the importance of omnichannel and having a unified view of customer data across all communication channels and interactions between the customer and agent. Achieving this ideal in a legacy, on-premise contact center environment, however, is incredibly challenging for many BPOs — until they understand what the cloud has to offer.

How the Cloud is Improving Omni-Channel Contact Center Flexibility and Scalability
One way BPO providers are addressing the growing dissatisfaction with outsourced contact centers is by turning to the cloud for highly flexible, integrated and scalable contact center solutions. A broad set of contact center industry analysts report that cloud-based contact center seats have grown at impressive double-digit rates over the last several years. A strong indication that the adoption of the cloud model for the contact center is here to stay comes with the predictions that in the next 3-5 years the growth rate of contact center as a service (CCaaS) will continue at 17% to 25% percent, while implementations of traditional on-premise systems will be anemic. What is equally impressive is that among those that have already made the move to cloud contact center solutions, more than 90% reported being satisfied, highly satisfied or completely satisfied with their decision.

While there are myriad reasons for a BPO to consider creating cloud-based solutions over traditional, premise solutions, two major reasons are flexibility and scalability. Many legacy premise-based contact center solutions simply cannot keep pace with a BPO’s fluctuations in interaction volumes across their customer base as well as being able to adapt to changes within their contact center staff. In the traditional contact center model, a BPO has to decide up front how many agents it will need for the year, and it has to know its projected total call and interaction volume to effectively price its services. Once these numbers are locked in, it may be difficult to change those figures during lulls or spikes in business.

In a CCaaS environment, on the other hand, a BPO can easily remove or add agents and add new features and functions, effectively flexing to meet the changing needs of clients, without consuming IT resources on lengthy projects. Using a CCaaS platform provides the BPO an elastic and agile alternative to its legacy on-premise infrastructure, and it places less pressure on BPOs to have to predict the future.

Multi-Tenancy: The Key to CCaaS’ Ability to Deliver More for Less
A key differentiator with a cloud-based contact center solution is that it uses a multi-tenant architecture. Multi-tenancy allows a single instance of a software application to support multiple end-customers (i.e. tenants). Through virtual partitioning, each tenant retains its own data access and configuration parameters, while at the same time sharing CPU processing, memory, network infrastructure and data storage resources. Using shared resources creates efficiencies and economies of scale for the BPO’s IT and operations resources both in day-to-day management and administration and especially during system updates. Unlike the old way of installing contact center software on individual machines and dealing with disruptive and high-touch maintenance processes, a unified multi-tenant contact center platform is operated across multiple end clients.

The net result of a BPO operating a cloud-based multitenant solution for delivering contact center services is that it provides a lower TCO (total cost of ownership) than a traditional contact center infrastructure:

• Ease in onboarding new clients as tenants on the platform
• Agility to adapt to the client’s changing business needs with little disruptions when agents are added or new channels, integrations or features are added
• Operational efficiencies, especially during maintenance updates or software upgrades.

Through the use of Web Service APIs (application program interfaces), CCaaS offers several integration benefits to BPO providers, also. One example is the ability to integrate communication systems and contact center technologies (e.g. email, chat, video conferencing), which is a key prerequisite for creating a true omnichannel experience. Additionally, BPO providers can use the same Web Service APIs to integrate their contact centers with their enterprise client’s CRM, ERP and other business applications. Web-based agent and supervisor interfaces can be used to extend the solution to the client’s management team, along with unified tools for reporting and agent management across all end-customer tenants.

Many BPOs find themselves in the predicament of having aging on-premise contact center infrastructure and high client turnover. They need to make much-needed technology refreshes, but multiple, lengthy and expensive upgrades to legacy contact center applications are not viable and short returns on investment are a must. A cloud-based CCaaS application platform is a smart choice that meets these needs with a lower IT resource investment and better long-term TCO. In addition to providing a unified, omnichannel customer experience, CCaaS enables BPOs to integrate their services with their customers’ enterprise applications, adapt to changes in their clients’ businesses and flex to changes in interaction types and volume. Empowered with contact center agility, the BPO can focus on providing additional business value and building stickier client relationships. As a result, client satisfaction increases and the end customer experience does, too — everybody wins.
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Jacki Tessmer is Vice President of Service Provider and Cloud Strategy for Enghouse Interactive.

The Who, What, When and Why of a Service Provider Selection Site Visit... by guest blogger Steven Kirz, Managing Director, Pace Harmon

Before outsourcing was mainstream among enterprises, the service provider site visit was an ultimate prerequisite to making a service provider selection. However, a perceived lack of benefit achieved on such trips in the past often means less emphasis on this important part of today’s selection process.

Many executives underestimate the value of performing due diligence site visits.  However, onsite due diligence trips, when done the right way and at the right time, play a critical part in the strategic procurement process, unearthing key information that helps organizations select the service provider best suited to their business.

Who Should Go? 

This onsite outsourcing service provider visit is not usually a trip for the CIO. Instead, the CIO should send the key IT staff members who are best qualified to evaluate the service provider team, tools, transition plans and solutions. This team should be the ones who will be tasked with making the outsourcing relationship work and who will be engaging with the service provider on a day-to-day basis (‘Evaluators’). Facilitating direct interaction between these two groups before final selection can help identify and anticipate potential issues before they arise.

What Should You Evaluate?

While Evaluators must address a long list of standard due diligence requirements (e.g., dual entry of telecom providers, backup power, physical and virtual security), the leading service provider contenders can often appear on par with one another. Evaluators can help differentiate between service providers as part of the onsite visit by focusing upon the criteria that are critical to a successful outsourcing partnership.

The Team

Regardless of the commercial arrangement, the service provider’s specific resources are critical to the success of the service provider’s services and solution delivery.  It is important to determine two things:  the service provider team members’ ability to collaborate on a plan based upon live feedback and their ability to demonstrate a desire, and moreover the capability, to go beyond a contract to address issues, add value, and deliver a ‘client first’ oriented service.

The Tools

Service provider tools can appear attractive in RFP responses.  However, during due diligence, Evaluators can watch how the service providers actually deploy and use these tools with their other clients.  Another way Evaluators can judge the value of tools is to learn if proposed team members have ever used the tools or received training for them; if experienced resources have never used the tool, chances are that the tool is not as critical to delivery as Evaluators may have originally thought. 

      

When Should You Go?

An optimal time for a due diligence site visit is when negotiations are almost complete (assuming negotiations are competitive among multiple service providers).  When the deal is within weeks of a start date, the service providers can realistically commit resources and the Evaluators are more likely to meet the bulk of their prospective team. Similarly, a lack of committed team members can be an indicator of service provider resource issues. Timed in this way, due diligence visits can accelerate the resolution of outstanding issues. 

Why Should You Go?

If your procurement process is competitive, pricing and essential requirements won’t be sufficient to differentiate the service providers as there is likely to be parity in these categories.  Therefore, the potential service provider teams, tools, transition plans and solutions should be the primary criteria that differentiate the top service provider from the rest. The best way to accurately differentiate key selection criteria among service providers requires traveling to their delivery centers.  Buyers that conduct a carefully planned onsite visit to the short list of outsourcing service providers that are competing for the business will tell you they can’t imagine having made the right decision without having made the trip. The alternative ­– not making the investment associated with due diligence ­– can lead to long term repercussions that far exceed the cost of the trip, even if you assume you would have selected the same service provider.

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Steven Kirz is the Managing Director at Pace Harmon.

What Are Technology Leaders Doing to Cut Run Costs and Fuel Innovation... by guest blogger, Atul Vashistha, COP, CEO, Neo Group

Neo recently surveyed a broad group of business leaders.  About 70% were senior management or C-level executives. They came from a wide range of industries, some of the largest numbers from healthcare, banking and financial services.

The goal was to find out what were technology leaders doing to cut run costs and fuel innovation. Most industries and business leaders are under significant pressure to reduce costs, especially run costs. At the same time, these business leaders are being asked to do more. They are being asked in many cases to lead the evolution to a digital enterprise, while in other cases, mine customer data to help build new products or identify new customer segments. Often, all this ask comes with no or limited budgets.

Here’s what we learned from surveying over 70 technology leaders:

• The majority of respondents indicated that their cost reduction strategies are a smart way to do business and a means to fund new growth initiatives.
• Run cost reduction strategies are mainly focused on optimization of product portfolios & applications and leveraging low-cost assets such as outsourcing and in-house low-cost centers. 
• Multiple strategies are used to reduce run costs such as optimization of products and applications, moving to the Cloud, leveraging outsourcing and low-cost centers. However, results from the survey suggest that these methods and others are not being fully utilized and as a result more opportunity is available to reduce costs further. 
• Respondents indicated that, during the next 12-24 months, their run cost strategies will stay the course and continue to be focused in multiple areas such as optimization of products and applications, moving to the Cloud, leveraging outsourcing and low-cost centers. 
• However, respondents will continue to face challenges as they implement their run cost strategies. The survey data showed that the main hurdles to implementing successful run cost strategies were finding the right talent to drive change, buy-in from key stakeholders and company culture. 
• The majority of respondents find that innovation is being enabled through the use of automation, big data and by encouraging their vendors to innovate. However, the results also indicate that these methods, as well as others, are still not being fully utilized.
• Over 70% of respondents focus on enabling incremental innovation that keeps their existing offerings competitive. 
• A top-down approach is used by the majority of respondents to enable innovation within their company.
• Over 55% of the respondents stated that processes used today with their vendors to enable innovation are not effective.
• The main reasons for an ineffective innovation process with their vendors is that there was little or no attention placed on it during contract development and when it was addressed in the contract the terms and expectations were very unclear.

The survey results indicate that the respondents are focused on incremental innovation that will enable them to keep their existing products and services competitive. They will fund the growth initiatives through smart cost reduction methods such as automation, big data/analytics, leveraging low cost centers and finding more effective ways to drive their vendors to help them innovate.
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Atul Vashistha, COP and Neo Group CEO; DoD DBB Board Member; Author
http://neogroup.com/

Do you have something relevant, witty and maybe a bit controversial to say?

IAOP is searching for guest bloggers!

Our PULSEblog features in-depth coverage of the industry, issues, trends and includes thought leadership and probing C-level guest bloggers; as well as exclusive and insider coverage of IAOP events, programs, awards, research, training and certifications and surveys.

PULSE connects you and your company with more than 120,000 of the world’s leading professionals in outsourcing and other collaborative business relationships today around the globe – customers from Fortune 500 companies, the world’s best service providers from all industries and leading advisors. Advertisers will gain access to the influential membership of IAOP – including deal-makers on the client side who are, on average, responsible for $60 million per year of outsourcing spending with some overseeing outsourcing programs in the billions of dollars.

PULSE is for dealmakers. More than half of IAOP’s members are C-level decision makers and more than a quarter are buyers. Providers represent more than 55 percent of our membership and advisors account for 16 percent of IAOP’s core base. Our readership and coverage is truly global and includes North America, Latin America, Europe, United Kingdom, Ireland, Russia, Australia, New Zealand, Africa, Middle East, India, China and the Pacific Rim.

If you have something to say, email your relevant, current, witty, insightful, edgy and maybe even controversial post to kate.hammond@iaop.org to be a guest blogger.

Women Empowerment & Opportunity in Outsourcing - A Survey - We Want to Hear from You!

IAOP, in collaboration with Avasant—a global management consulting firm—announced today, the launch of its Women Empowerment and Opportunity in Outsourcing survey. The purpose of the survey is to gather data on the perceptions of gender equality, empowerment and opportunities for women in the outsourcing industry and identify where and how outsourcing has internationally empowered the lives of women, both inside and outside the workplace.

The survey is brief and will be going to more than 50,000 outsourcing professionals around the world. The deadline to complete the survey is August 31, 2016.

*Please note this survey is for EVERYONE - it is not gender-specific.

“Women play a vital role in both society and the workforce, and we have reached a significant moment in a growing international movement toward women's equality and opportunity,” said Dana Corbett, IAOP Director, Research, Training & Certification. “We are proud to be joining this global movement in recognizing and valuing all women fairly, as their effective empowerment is a clear catalyst for progress.”

Findings from this survey will be presented in a powerful main session during OWS17, in February 2017. Participants receive a copy of the results as well as entry into a drawing for seats to OWS17, by submitting an e-mail request at the end of the survey.
This initiative does not end with the WEO survey; rather it begins to build the stage to make improvements and bring equality to the workplace in every corner of the world. Following this survey, IAOP and Avasant plan future programs and opportunities based on the results.

"The outsourcing industry has historically had an underrepresentation of women in executive and delivery positions,” said Kevin Parikh, Global CEO, Avasant. “At Avasant, we have adopted a hiring strategy to equalize this imbalance. We are thrilled to support IAOP’s WE initiative as a collaborative project partner, a board member and advocate for gender equality."

The survey is open to all of IAOP’s global members and affiliates, Avasant’s clients, and all outsourcing professionals across the field and around the world. Though this survey topic is focused specifically on women, everyone is encouraged to participate.

You can access the survey here.

#TrainingTrainingTraining - That's Right! The Training Edition of PULSEmag is Out!

At IAOP, our de facto training sets the bar and we've dedicated our latest issue of PULSEmag to #TrainingTrainingTraining!

Everything you want to know about IAOP's COP Master Class, Governance Training, getting certified and more is packed into this feisty issue of PULSEmag! Check it out today!

Training & Certification Has Come a Long Way 
A decade has passed since IAOP launched its Certified Outsourcing Professional (COP) program. Certification, the COP Master Class and Governance Workshops have attracted professionals of all ages and roles. While the foundation of the learning experience remains constant, the content continues to be refreshed to address technology and issues of relevance. Check out our training issue, here!

Fast Company: A Trio of OWS16 Stories
1) Automation: Speed of Adoption
2) Game Time: The Audience Wins
3) Memories: A Look Back in Photos

Hot Spot: Netherlands & Scandinavia: IT and Cloud Present Opportunities
With EOS16 taking place in The Netherlands this November, PULSE spoke with three industry experts in the region to get the scoop on the outsourcing industry in northern Europe.

Fresh Faces: Career Highs from our COPs
In this new column, we'll feature job promotions, achievements and other notables from the industry's Certified Outsourcing Professionals.

Tech Topic: As-A-Service --- Alignment, Innovation and Insight
A practical guide to begin the As-a-Service Journey.
Determining key outcomes is only half the journey. The real magic of As-a-Service comes with unlocking value by using the data and insights your operations yield to identify further benefits to your business, customers or product.

www.IAOP.org/PULSE

PULSEmag - The State of the Industry Edition - is Here!

Check out PULSEmag's State of the Industry Edition!

The State of the Industry Issue 
Race to the Top
Is there a race to implement SMAC (Social, Mobile, Analytics and Cloud) technologies? Many service providers are already well down the track, but some clients are still waiting for the starting gun to go off. Others haven't yet figured out there is a race. Learn all you need to know about the State of the Industry.

Fast Company 
Robotic Process Automation
OWS16 Panelists Debate RPA ~ Lessons from the Field ~ Humans Keep Value-add and Judgment-based Work ~ Key Terms & Buzz Words ~ Live Audience Polling

Hot Spot USA 
Domestic IT Outsourcing In Demand
The US is an ideal location for multinational companies - not only as an outsourcing provider to other parts of the world but as an onshore, nearshore and rural shoring destination.

IAOP Awards 
The Industry Salutes Excellence
Collaboration has always been the hallmark of IAOP and nowhere was it displayed better than at the OWS16 Awards Luncheon, where individuals and teams of customers, providers and advisors, were recognized for their excellence, with numerous awards and recognition.

Read it all here - https://www.iaop.org/pulse.

OWS16 - That's a Wrap!

Industry professionals from more than 40 countries came together last month to chart the industry’s future during IAOP’s 2016 Outsourcing World Summit®. In the 19th edition of the Summit, outsourcing demonstrated its strength as a global platform to grow and transform businesses.

Focus on the first day of the event was exploring innovation and looking at where the outsourcing profession has been and where it is headed – a review of the 2016 State of the Industry survey pointed to the emerging technologies and drivers that are affecting outsourcing decisions.  While traditional outsourcing is still being practiced, there is a demand for leveraging the new environment of SMAC (Social Media, Mobility, Analytics and Cloud).

“One thing in particular that stood out to me at this year's Summit was the real sense of community we share,” said Debi Hamill, IAOP CEO. “With emerging technologies and disruption shaking our industry, we know we can count on our members, to come together, learn and grow. We've worked hard to get here and we are excited for the future as we plan the 20th edition, taking place in San Antonio. Early results of our post-Summit survey show that 96 percent of attendees found the networking ‘good to excellent.’ Thank you to all who contributed to its success!”

The focus of day two was Robotic Process Automation, which is changing how services can be delivered. While businesses can succeed from innovation, it takes more than talking about it – it takes a corporate culture and commitment to exploit innovation and make it a part of a business direction.

Day three was a hands-on, audience participation and problem-solving session. The discussion uncovered what is important to customers and providers and brought out what is working and what needs more work to make it work for customers and providers.  Audience participation created scenarios and opportunities for discussion which were addressed by “industry experts.”

Two hot topics during OWS16 that are driving the future of outsourcing are robotic process improvement and innovation. The next evolution in outsourcing will possibly have providers employing robotic processes to take the “robot out of human.” This could create a higher level of job satisfaction while delivering consistent results. Innovation in technology is also driving how outsourcing providers are delivering value to their customers. It is contributing to defining customer expectations on outcome results.This could mean that companies investing in robotic innovation will be the leaders and not those that are just leveraging current processes and technologies.

Outsourcing customers, providers and advisors from leading companies converged at the summit with some of the largest numbers of international attendees coming from Canada, Colombia, India, Nigeria and the United Kingdom to hear the latest strategies that are leading companies to success in the new outsourcing landscape.

Two Honored as IAOP Members of the Year
IAOP recognized MichaelNacarato, Managing Director, Union Bank, and Donald Mones, COP, Director, Business Transformation Group, Offshore / Outsourcing Risk Management, Union Bank, as “Members of the Year” for their work to advance the outsourcing industry.

MichaelNacarato chairs IAOP’s Texas chapter and is on the leadership teams for the association’s Financial Services, Governance and Voice of the Customer chapters. Donald Mones chairs IAOP’s training & certification committee, the New York chapter and is on the leadership team of the Vvoice of the Customer chapter. The two corporate members were honored during OWS16, for their demonstrated commitment to the growth of IAOP and their leadership in the promotion and delivery of the association’s programs.

Leadership Hall of Fame
IAOP® also honored Gregg Kirchhoefer,partner at Kirkland & Ellis; Bill Metz, Senior Director, Global IT Sourcing and Vendor Management, Walmart; and Christopher Stancombe, Chief Operating Officer for Capgemini Business Services, into its prestigious Leadership Hall of Fame.

Global Outsourcing 100
IAOP also announced its annual Global Outsourcing 100® and World’s Best Outsourcing Advisors lists. The official lists will be premiered in a special advertising section on outsourcing in the 2nd Quarter 2016 FORTUNE 500 issue of Fortune magazine, on stands June 6, 2016.  All companies included on the lists will have demonstrated their global excellence;  "stars" will be awarded for all companies distinguishing themselves in one or more judging category.

Global Excellence in Outsourcing
Teams from AbbVie and Merck were honored as winners of the sixth annual Global Excellence in Outsourcing (GEO) award. The AbbVie – Finance & Accounting team has received the award for the Innovation category and the Merck – Externalization CoE team has received the award for the Best Practices category.

Global Outsourcing Social Responsibility Impact Award
IAOP and Information Services Group (ISG) honored ISS (ISS.CO, ISS DC), a global leading facility services provider, as the winner of its fourth annual IAOP/ISG Global Outsourcing Social Responsibility Impact Award (GOSRIA). ISG will make a cash donation in the name of ISS to its chosen charity, FedCap.

IAOP also announced that its 20th annual edition of the world-renowned Outsourcing World Summit will take place February 19-22, 2017 at the JW Marriott Hill Country, in San Antonio, Texas. For more information and special introductory rates, see the IAOP website.

The OWS16 Edition of PULSEmag is out!

Looking for the inside scoop on everything OWS?

The Guide - Everything You Need to Know About OWS16 (page 22)
Make your time at the Summit a success with this guide to OWS16! Our program was developed by you - our expert members - to address the very latest issues on top of the minds of outsourcing professionals.

We also chatted with the soon-to-be-honored Leadership Hall of Famers...(they'll be honored at an awards luncheon this week, during OWS16)

View From the C-Suite (page 32)
Meet the New Hall of Famers
they come from different backgrounds and vantage points. Meet our latest inductees: Gregg Kirchhoefer, Partner, Kirkland & Ellis, LLP; William Metz, Sr. Director, Global IT Sourcing & Vendor Management, Walmart; and Christopher Stancombe, COO, Capgemini Business Services.

We've got some other hot topics for you, too, in this busting from the seams edition of PULSEmag!

Check out these stories:

Fast Company
The Evolution of Outsourcing
Although the concept of outsourcing has been around for centuries (think of supplemental staffing for building the pyramids), its current form is less than a half-century old. Yet, it has evolved dramatically in these five decades.

Hot Spot MENA
Nearshore and New Models Presents Opportunities
PULSE spoke with Fuad Abdelhadi, VP of Booz Allen Hamilton, serving the Middle East North Africa, about outsourcing's growth potential in this region.

On the Ground at OWS16!

We are thrilled and excited to announce that we are on the ground at Disney World for OWS16! We have an action packed event that is sure to keep you on your toes!

Pay attention to our social media for the next week as we'll be bringing everything to you live... Look for hashtag #OWS16 to stay up to date on the IAOP Summit happenings!

Facebook.com/IAOP1
Twitter.com/IAOP
Instagram.com/IAOPinpics

See you all very soon!

Happy New Year from all of us at IAOP!

Welcome to 2016! We are beyond excited for this upcoming year as we have so many things in store for our members and all industry professionals.

We'll be launching new chapters, planning another European Summit, starting a conversation about Women Empowerment & Opportunity in outsourcing, expanding our member community - ConnectIAOP - and so much  more!

Stay tuned for an action-packed 2016!