Business process as a service (BPaaS) is emerging to be a BPO game-changer reminiscent of software as a service (SaaS) a decade ago. Specifically, BPaaS is adding arrows to organizations' outsourcing quiver in how they approach their finance and accounting and other back-office functions.

"Businesses that leverage traditional outsourcing deals are looking to move off of inflexible contract and delivery structures," says Robert McNeill, vice president for analyst firm Saugatuck Technology. "The pillars that built and supported legacy outsourcing are under severe pressure. Labor arbitrage, old technologies, and traditional business models limit effectiveness. Businesses are looking for more flexibility, innovation and responsiveness from their outsourcers. BPaaS is providing that alternative."

McNeill says the BPaaS proposition may include infrastructure as a service (IaaS), platform as a service (PaaS) and SaaS, as well as the traditional benefits of outsourcing, such as process expertise and labor arbitrage.

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