Executive Briefings

Most Want BPO, But Some Won't Survive Transition

Concerns over data security and the difficulty of managing business process outsourcing projects are no match for the relentless drive to cut costs, a recent InformationWeek reader poll finds.
More than seven out of 10 companies surveyed are forging ahead with BPO initiatives, even as a sizeable minority expresses dissatisfaction with results. Perhaps even more interesting is that another small cadre of companies surveyed sees BPO not only as a cost-cutting tool, but as a way to push strategic agendas, such as transforming processes or increasing revenue.
Our research also suggests that this will be a difficult transition--and one that not all clients and vendors will survive.
That makes another key phenomenon we identified seem even more like rolling the dice. Knowledge process outsourcing, or KPO, is an offshoot of BPO that encompasses high-level business processes requiring professional judgment. Think risk management and modeling, even actuarial work. Compare that with less rigorous BPO activities, such as handling customer queries, applications, and orders, and you begin to see the schism picked up by our survey. Is the imperative to slash spending worth putting mission-critical business decisions into the hands of outsiders?
Source: Information Week, http://www.informationweek.com

Concerns over data security and the difficulty of managing business process outsourcing projects are no match for the relentless drive to cut costs, a recent InformationWeek reader poll finds.
More than seven out of 10 companies surveyed are forging ahead with BPO initiatives, even as a sizeable minority expresses dissatisfaction with results. Perhaps even more interesting is that another small cadre of companies surveyed sees BPO not only as a cost-cutting tool, but as a way to push strategic agendas, such as transforming processes or increasing revenue.
Our research also suggests that this will be a difficult transition--and one that not all clients and vendors will survive.
That makes another key phenomenon we identified seem even more like rolling the dice. Knowledge process outsourcing, or KPO, is an offshoot of BPO that encompasses high-level business processes requiring professional judgment. Think risk management and modeling, even actuarial work. Compare that with less rigorous BPO activities, such as handling customer queries, applications, and orders, and you begin to see the schism picked up by our survey. Is the imperative to slash spending worth putting mission-critical business decisions into the hands of outsiders?
Source: Information Week, http://www.informationweek.com