Over the last couple of decades, the industry has become remarkably familiar with Business Process Outsourcing (BPO) and Knowledge Process Outsourcing (KPO). There is hardly any multi-national company that has not been touched by either one of them. Various offshoots like the Legal Process Outsourcing (LPO), Recruitment Process Outsourcing (RPO), etc., have come up to add further specialization because of the popularity of this industry. In this article, I would like to, however, talk about the need for a new service framework that has emerged in the industry in the past few years. We are calling this new Service Framework as
Business Enablement Services.
Business Enablement Service Framework
This has been a period of unprecedented growth in data and systems. All the systems operating in silos have compounded the problem of getting to the insights easily. Simultaneously, the business processes have become complex and fretted with manually intensive activities. This leaves the functional teams no bandwidth to add value and work on strategic projects.
Business Enablement is a Service Framework that aligns the objective of your strategic transformation goals with your operational goals for successful transformation by creating a dynamic layer between your strategy and day-to-day operations.
To further investigate the need for Business Enablement Services despite companies extensively using the services of BPO and KPO industries, I studied the various aspects of the KPO/BPO industries and contrasted them with the need for Business Enablement Services.
Why the Need for a New Service Framework?
The answer lies in the evolution of this need in the industry, accentuated more with the advent of Covid and organizations starting to make real investments into transformation projects. The need for Business Enablement Services has become more strategic in nature, and it can no longer be considered a mere cost-saving or bandwidth-creating tactic.
If you look at the industry and how it has evolved, BPOs were set up primarily to allow businesses to focus more by asking someone else to do the routine but necessary work like setting up and managing the IT infrastructure, customer care, etc. There was a clear cost arbitrage because businesses did not have to hire for these roles in the house.
The BPO industry gave birth to the KPOs – when businesses wanted to focus on their core competency and avoid having in-house capabilities for activities that were important but not specific to that organization. These activities also required resources with a certain level of expertise which could be expensive to hire. So, businesses started leveraging KPOs for things like market research, legal services, contract research organizations for Biotech, etc. The KPO providers had people with that expertise. Because they were doing it for other similar companies, they were able to use the same resources for multiple engagements, thereby reducing the cost burden. They also had the process knowledge, and because this work is not very customer specific and more driven by the industry regulations, the learning curve for new businesses was not as steep.
Business Expansion Triggering the Change
Around this time, businesses started experiencing an explosion in the number of their internal systems and business data. More internal systems and business data meant more complexity in the internal processes as well as greater demand from their stakeholders. Though businesses knew what they needed to do to improve, finding the time to do that was becoming increasingly difficult. Businesses were looking at democratizing delivery and empowering people that are closest to the customers to bring about efficiency.
Businesses were not only increasing their spending on technology but there was also a shift in spending, leading to a plethora of transformation projects being run in any organization at one time. The execution of transformation projects with many moving pieces is often the most challenging and complicated part. Transformation projects take time to show value, and during that time, they increase operational efforts. The execution effort leads to continuously shifting priorities and deliverables and the need to have people align their day-to-day operations with the strategic goals of the transformation projects. It is not a one-off activity but must go hand-in-hand for a continued period for the success of the transformation projects.
What has Prompted This Now?
With increased spending on strategic transformation projects and increased systems and data ecosystem, businesses started feeling the need to invest in bridging the strategic and functional projects so that their operations are much more aligned with their strategic objectives. According to a Forbes article, for any transformation project, cost and productivity move in the wrong direction before long-term benefits are realized. BCG research shows that 70% of digital transformations fall short of their objectives.
It is because there is a constant need to align the strategic with the operational to make the transformation successful and create measurable operational efficiencies. Transformation projects are usually top-down, so it helps to have someone that translates that objective to the tactical operations and helps with the execution of it. Execution is the most time-consuming part, and Business Enablement Services help provide that layer.
To go a little deeper into understanding the concept of Business Enablement Service, in the next two articles, I will address the essential differences between BPO/KPO and BES as well as talk about what are the benefits of Business Enablement Services and who can it potentially help.