Melbourne, 17 October 2012 – The potential impact of cloud on propositions of platform business process outsourcing (BPO) and business-process-as-a-service (BPaaS) has caused distinctions among the various propositions to become increasingly blurred, leading to confusion among buyers, according to global analyst firm, Ovum.
In a new report*, Ovum finds that the BPaaS concept appears to be a logical evolution of cloud services, in that standardised processes have been wrapped around software-as-a-service (SaaS) offering.
Thomas Reuner, Ovum Principal Analyst, IT Services and author of the report, comments: “In the narrower context of BPO, Ovum believes that BPaaS is a future vision that is not yet resonating with buying organisations. Most marketing messages are reminiscent of the early hype around cloud services.”
“Any assessment of cloud services and services adopting cloud components need to be conducted within the wider framework of industrialisation, and the evolution of BPO and the impact of everything-as-a-service (XaaS) on BPO delivery need to be discussed in the context of balancing cloud computing with the complexities that buying organisations currently face,“ Reuner adds.
The evolution of BPO from the traditional “lift and shift” approach, leveraging labour arbitrage in global sourcing locations, toward platform BPO is best described as a service delivery model in which end-to-end processes – offered as managed services on a highly standardized business platform based on a best-of-breed (often ERP) application – are hosted, managed and maintained by a BPO provider. Global providers are investing significantly in these platforms, and therefore taking greater risk in terms of capex investment.
Reuner explains: “This investment does not necessarily equate to traction on the buyer side as the language used does not always resonate with their specific requirements. For buyers, platform-based BPO leverages economies of scale, drives process standardization and improves quality through automation.”
“The push toward platforms is increasingly accompanied by a bundling of infrastructure components as part of the BPO contract. Consequently, the boundaries between IT outsourcing and BPO are becoming blurred,” concludes Reuner.
NOTES TO EDITORS
* The Evolution of Business Process Outsourcing: from Platform BPO to BPaaS – Balancing industrialisation and business complexities
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