By Mark McWilliams
Business process outsourcing (BPO) is not a revelatory concept to the enterprise world. Organisations of all sizes have consistently increased their BPO contracts to preserve staff productivity and encourage internal innovation. With the advent of cloud computing, however, we’re on the brink of a “BPO 2.0”, otherwise known as “Business Process as a Service” (BPaaS).
In its simplest form, BPaaS delivers business processes through the cloud, streamlining back-office functions. BPaaS combines the individual strengths of cloud technology with the 30-year history of BPO to create an opportunity for businesses to purchase process outsourcing on a piecemeal, pay-as-you-go basis — making the technology more affordable and accessible to a wider audience.
The Rise of BPaaS
During the Global Financial Crisis, businesses faced the need to scale back significant enterprise costs in order to survive the economic downturn and set the stage for future growth. More and more companies chose to outsource non-critical business functions and processes to third-party service providers as a way to realise lower labor costs.
Over-reliance on traditional business models, outdated technologies and rigid contract and delivery structures, combined with the maturation of the BPO market, led customers to look for more flexibility, innovation and responsiveness from their outsourcing providers. The rapid evolution of cloud-based solutions, with their multi-tenancy, consumption-based use and pricing, has created a mass demand for BPaaS. This new model offers organisations the opportunity to get the business outcome they desire while paying only for the services they use.
Different types of outsourced services offered via the BPaaS model include HR functions like payroll and benefits administration, procurement, advertising, marketing and an array of other industry-specific operations.
Five Benefits of BPaaS
Organisations looking to optimise performance and free up staff to focus on their core responsibilities should start looking into capabilities they can leverage through BPaaS. Adopting business process management through a cloud solution offers companies several advantages, including:
1. Lower costs
Traditionally, overseeing and coordinating business processes includes purchasing and maintaining servers to handle the large volume of computing involved in everyday operations management. With a BPaaS solution, business processes are uploaded to a cloud service that performs and monitors them, so companies don’t have to invest in superfluous hardware and maintenance, significantly decreasing costs.
2. Risk reduction
The pay-as-you-go pricing model offered by BPaaS lets organisations choose which functions they want to use and when they want to use them, versus spending capital for a major platform overhaul which can be expensive and ineffective. Through BPaaS, companies have the option to implement a fully integrated suite of services or test stand-alone offerings. The flexibility offered by the consumption-based model helps mitigate the risks associated with large-scale technology purchases and long-term contracts.
3. Superior process efficiency
Uploading a business process to the cloud ensures that it is well-defined and consistent across the organisation. Within a BPaaS web-based platform, different processes can easily be linked and monitored as well. The BPaaS model providesautomation, standardisation and repeatability in the way the services are used and delivered, thus cutting down on task training and execution time.
4. Organisational clarity of focus
Moving business processes to a cloud solution gives an enterprise more time and resources to focus on business growth, rather than having to worry about the completion of non-strategic activities. When implemented correctly, BPaaS creates a new sense of agility and innovation within a company, creating a higher-performing, more competitive business.
5. Revenue growth
When business processes are hosted in the cloud, employees can access them anywhere, at any time; with BPaaS creating a more mobile workforce, businesses have the opportunity to expand at an accelerated rate. This portability gives organisations the breathing room to take on more business and produce quality results faster — making for a much healthier bottom line.
Business Process as a Service is still a rising star, but its adaptability and benefits are rapidly getting the business world’s attention. Datacom has already developed several BPaaS offerings, including solutions for payroll and talent management as well as case management for local authorities. As organisations continue to seek scale and cost efficiencies, we are committed to staying on the pulse of the ways BPaaS can help our future and present customers.
Mark McWilliams has 25 years experience in the technology sector and is a Director of Datacom Investments.
He has detailed knowledge across the IT spectrum from data centres through to governance, with everything in between. He has also worked with organisations that have varying needs from a security standpoint, including those with advanced requirements such as banks and government agencies.