While cost savings is still one of the biggest factors behind offshoring, customers (including Business Process Outsourcing) of outsourcing services now expect more. They want quicker services. Thus, they are increasingly adopting solutions such as Business Process Management (BPM) to re-engineer, streamline and automate their business processes.
“Companies are spending billions to renovate enterprise applications, especially to align company business processes with ERP application software. BPM software and services align an organization’s internal and external processes, while integrating with its existing IT systems,” Santanu Paul, Senior Vice President and Head of Global Delivery Operations, Virtusa Corporation, an IT solutions and services provider with expertise in BPM.
At present, a significant number of Virtusa’s customers — mainly from the banking, financial services and insurance sectors — are using BPM technology, and the numbers are rising. “Adoption will only go up as pressure rises on businesses to become more responsive and competitive. The market for this will be huge,” added Paul.
However, BPM, like any other technology, should be used with care and good judgment. “If you are a chef, and you have a wide range of spices and ingredients in your kitchen to work with, does it make you a better or worse as a chef? Obviously good chefs will produce better results in that environment. But that is not to say that the occasional chef will not go overboard and ruin a meal, simply because they have too much choice! The same goes for technology. Choice is usually good when those making choices are knowledgeable,” cited Virtusa’s Paul.
Speed Vs. Cost
There was a time when companies implemented IT systems simply to achieve efficiencies by cutting operational costs. While that need will always remain, the focus is moving today on building businesses that can adapt rapidly to changing business conditions as market opportunities rise and fall. Speed is now just as critical as cost savings. That's where BPM comes in.
“It [BPM] dramatically improves the speed and agility with which an organization can respond to changing business conditions. For example, suppose you are an insurance company that underwrites auto insurance policies. Based on the profile of the driver, the age and make of the car, and a variety of other regulatory constraints, you have to price your policies in a way that offers your customers competitive rates while ensuring that you make a healthy profit. Now, if you implement your underwriting system using a BPM approach, you can change the 'rules' that govern your pricing overnight. If the government changes regulatory policies, or if you discover that a certain brank of car is more prone to being stolen, you can factor these rules into your IT systems very quickly. Overall, it makes you very responsive as a business. It is hard to do the same with traditional technologies,” said Paul.
Can Technology Replace the Human Capital?
“Technology will always improve to take over functions that we as people do not find value in doing. That is a good thing. It makes us more productive, and hopefully frees us to pursue higher causes. There was a time when we did not have online ticketing. Technology today has gotten rid of airline paper tickets, thus improving flexibility, choice, and pricing. That is a wonderful step forward. In short, technology will not replace people in the coming years, but will surely replace a lot of silly, boring, or unproductive things people have to do today. We welcome that,” concluded Paul.
