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Cloud Will Mix with Older Models to Disrupt BPO

Cloud Will Mix with Older Models to Disrupt BPO

By Bill Huber

Forecasts for cloud computing range from predictions that it will be the great destroyer of outsourcing as we know it to calmer expectations that it will simply be another means of providing access to tools and data. Bill Huber of TPI recently interviewed Ramesh Gudalur, head of global BPO for Cognizant, and Paul Roehrig, director of strategy for Cloud Business Solutions for Cognizant, to get their assessment of the potential effects of the cloud on BPO solutions, and to find out how the cloud is affecting services today.

Bill Huber: As experts, how do you see the cloud having an impact on the way BPO services are delivered?

Paul Roehrig: Our belief is that cloud-based solutions are beginning to offer disruptive advantages when woven together with more traditional delivery models. Looking at services as “cloud” or “not cloud” might not be the best direction. Very few enterprise decision-makers are ready to suddenly throw everything into a cloud delivery model. Concerns about security, the ROI of cloud services, legacy applications, etc., will continue to keep decision-makers cautious about widespread sudden leaps to cloud services.

Nevertheless, cloud-enabled next-generation solutions can offer disruptive levels of productivity improvement and business enablement. We see its role as an innovator/integrator/guide to help users find the optimal balance of cloud enablement with traditional delivery methods.

Cloud enablement cuts across all lines of service from a horizontal and vertical business perspective. Increasingly, cloud providers are integrating offerings such as Software as a Service (SaaS), Infrastructure as a Service (IAAS), and consulting and analytic services along with BPO to deliver an end-to-end solution for key processes. The real “over-the-horizon” take on this is that next-generation deals are just beginning to emerge at the enterprise level. These deals demonstrate a new class of solution weaving together infrastructure, applications, and business process services, and deliver business outputs back to customers via more of a consumption-based billing model. These cloud-enabled, vertically aligned solutions require deep understanding of the business, and they leverage global service delivery and a robust alliances ecosystem to deliver value.

BH: What example can you use to illustrate how this is happening?

PR: We have some examples of these solutions in clinical data management and analytics as a service in Cognizant’s life sciences business, and several other service providers also have examples of these solutions, and industry analysts and advisory firms are indicating that these business process solutions are gaining traction.

Based on a foundation of cloud services and traditional capabilities from providers, customers have a new opportunity to create differentiation based on innovation leveraged into more progressive service offerings. These are the early days, but these are real solutions delivering real value today – not just slideware.

BH: How can cloud technology assist the outsourcing of vertical business processes?

Ramesh Gudalur: In vertical processes, there is a need to change processes to drive the next level of value. For example, in healthcare claims, new processes have been implemented to put multiple types of claims together and analyze them concurrently rather than in a sequential manner, driving a whole new level of business intelligence. As industry wrappers are created that can change processes, you actually achieve changes in the process available on the cloud that will affect multiple companies.

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The result is the avoidance of significant reinvestment by clients. Buyers need to unbundle processes in a different way to drive increased value. They now have the opportunity to think about “Claims in a Box” solutions and to focus on the insights from analytics of the data rather than being a claims processor. This will help them to move from a claim-centered view of processing to an issue-based view of processing, driving higher fraud-impact identification and mitigation, for example.

BH: What should BPO clients do differently in going to market?

PR: There is an opportunity for advisors to help drive a new view of cloud-enabled business process services within their clients. Advisors can help clients understand the change to solution sets and offer new ways to take advantage of these emerging technology and commercial models. IT decision-makers are thinking differently about how to utilize technology. Those advisors who keep everything entirely templatized may put their customers at greater risk because value could remain locked in inefficient process and technology.

Cloud-enabled technology and commercial models can also provide benefits through business analytics and lowering run rates. To take advantage of this emerging trend, business and technology decision-makers should start by building a vision, not just slides, for next-generation sourcing solutions. It’s a great time to clarify and refine the true technology and business goals and then wrap the sourcing strategy around those goals.

Service providers and advisory firms are all positioning to help navigate new service models and business implications. Also, get smart about next-generation solutions. Pick less-critical functionality; storage, e-mail, platform-as-a-service (PaaS), and SaaS offerings seem to be the most common pilots, and get smarter about cloud services by trying them out. Then go search for true business solutions.

Bill Huber is a partner at TPI.

This article was originally published on BPO Outcomes.

 

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One comment

  1. I don't think there will be too much of a disruption. At most, there will be a short downtime when the business migrates to the Cloud, which really shouldn't be too much of a problem if done properly.

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