SaaS, Shared Services, BPO – Will they converge? – Most likely
Continued from SaaS, Shared Services, BPO – Will they converge?
Recently, we had a presentation from one of the Big 5 of the Indian IT services firms. The topic of the presentation was Outsourcing – integrated IT as well as process outsourcing. The speaker was an enterprising and enthusiastic chap who clearly oversold the service offerings from his company. At one point in time he claimed that his firm could also carry out some of the core value chain activities such as medical underwriting for us. I couldn’t help but wonder if now these outsourcing service providers are going to forward integrate and set-up banking and insurance businesses as well.
On a more serious note, there seems to be a lot of value in offering and opting for integrated IT and process outsourcing services. In such a scenario, the outsourcing service provider takes care of execution of back-office processes as well as development and maintenance of IT applications and infrastructure. In a more matured model, the outsourcer or outsourcing service consumer will be transparent to (or least concerned about) what IT systems are being used by the outsourcee or the outsourcing service provider. And obviously, the service provider will charge the consumer based on transactions.
What is the merit for service consumers to go for such a business model? Outsourcing service consumers will then have to just deal with 1 or 2 strategic vendors so that they could focus on core activities such as marketing, product design & pricing, and branding.
Is this model conceptually new and never tried and tested before? I wouldn’t say so. Electronics industry in Japan and US has already undergone this revolution. Today giants in this industry are just focusing upon marketing, new product development and branding, while manufacturing is completely outsourced to their vendors in Taiwan.
What to expect in future? Consolidation will continue in IT Services, SaaS, Shared Services and BPO space. Some of the IT services firms such as TCS, EDS, CSC, Mastek, Infosys already have a packaged solution for insurance &/or banking industry. Most of them also have a strong footprint in BPO space. These firms are well positioned to offer integrated IT(SaaS, Application Development & Maintenance) and process outsourcing services.
Here are some interesting developments, which confirm this theory:
- Infosys renames Progeon as Infosys BPO
- IBM Acquires Daksh To Bolster Offshore BPO Skills
- Wipro acquires Spectramind and later renames it as Wipro BPO
- TCS signs $848 Million plus deal with Pearl
- TCS acquires BPO firm in Chile
I won’t be surprised if one of the big IT services firms goes ahead and acquires SaaS firms such as Salesforce.com. Will they also acquire product companies? Well, for that we’ll have to wait and watch how the industry evolves.
Revisiting BPM Implementation Challenges
Just after we had started our BPM implementation in December 2005, I had written a blog entry – Challenges of Implementing BPM system – listing all our major challenges. They were:
- Change Management; Change from paper to image based processing
- Managing expectations of the users and top management
- Commitment of resources to the project
- Integration of BPM system with back-office systems
- Image Migration
I thought if we managed these challenges well; we were home. Till about a fortnight back we were on schedule to go-live in the last week of September. And then Murphy’s law hit us. First the adapters which had worked fine in UT environment failed to run as expected in our Model Office Testing (MOT) environment and then the MOT environment crashed forcing us to postpone our go-live date by almost a month.
Pondering over this sudden development, I wondered whether could we have avoided this delay. Well, may be yes. Certailnly, we could have done something to prevent this.
The BPM system that we are implementing is the 3rd or 4th implementation globally after the software has been migrated to comply with J2EE & BPM standards such as BPELby the software vendor. The implementation partner although has had a long relationship with the software provider, is implementing the new version of the software for the 1st time.
The lesson: In case you are dealing with new and cutting edge technologies involve very tightly the provider of the software in the project. We now have an experienced consultant from the software vendor working on-site. We are also getting our software architecture, design and implementation configuration vetted by the software vendor.
Who owns business analysts? – The debate is over.
Well, that is what I can say as far as our organization is concerned. After having experimented with placing Business Analysts (BA) with individual functions and then as an independent organization neither with functions nor with IT, we have finally merged our BA organization, which we called PMO (Project Management Office) with IT Systems group, which consisted of programmer analysts and system developers. We have called this group System Solutions Group. We have organized our Project Managers (PM), Business Analysts, System Analysts and Developers in four verticals where each vertical is a logical grouping of business systems based on their offering.
Hopefully, now we will be able to:
- minimize disputes between our erstwhile IT systems group and PMO
- give complete freedom & control to our PMs over the use of resources
- enforce focus and accountability on PMs, and their team members, and
- provide career path to our team members
Certainly having BAs with business functions or as independent functions had their pros and cons. However, we now believe this is the best structure.
Earlier blog entries on the same topic:
Sidewalk: Who owns Business Analysts?
Sidewalk: Who owns Business Analysts, the debate continues…
