BPO in a Box: Business Process Optimization1 Jan, 2013 By: Steve Rolla, Pros Elite Group imageSource
Now that so many office imaging dealers in North America have mastered every aspect of Managed Print Services, it’s time to set our sights on the next frontier. Actually, we know that the industry is still far from being superbly competent in the art of Managed Print Services; however our industry waits for nothing, and no one. As a Hewlett Packard executive recently stated when speaking about the future of Managed Print Services, “The company that is successful in MPS in the future, must also be successful at IT and information management services.”
Besides being interested in the hardware and the clicks, we had better be as interested in the services surrounding them. Today, the primary focus of the imaging dealer, as it pertains to the world of services, is directed to three main areas: Document Management Solutions, Business Process Optimization, and Managed Network Services. There are numerous subsets of the three major categories (which will be explored in future articles). Here, we will focus on one: Business Process Optimization (BPO) - and more specifically, Business Process Optimization (BPO) in a “box.”
First, let’s set the stage for any of you who wonder or doubt that Services will be a driving factor in the future. And to what degree.
Xerox acquired Affiliated Computer Services in 2009. At the time of acquisition, Xerox pronounced itself as a global leader in BPO and IT Outsourcing, managing client operations ranging from finance and accounting to HR and transaction processing. In addition, Ricoh’s recently launched Process Imperative is an initiative to promote understanding of the new information processing paradigms which will combine their business process expertise with that of industry visionaries, our partners and their customers. Konica Minolta recently announced the planned acquisition of Charterhouse PM. In their announcement, Konica states that Charterhouse is part of Konica Minolta’s future strategy to invest in Print Management Services (PMS). Thinking “Beyond Printing,” technology leader Konica Minolta intends to combine Print Management Services with Marketing Management Services (MMS), as well as Optimized Print Services (OPS) with Business Process Consulting (BPC).
Services revenue potential will outpace hardware sales in the not too distant future. The great thing about Services revenues related to BPO is that along the way you will connect with higher levels in your prospects’ organizations.
Today you need to start looking up and downstream at the solutions you provide your own customers and ask yourself this question, “How much do I really know about my customers’ processes, and where do I really fit in with the achievement of their long term goals?” An equally important question for the dealer whose margins continue to fall is, “Where is the value at in (each) client’s business processes so that I will know where to make my investments?”
BPO solutions ultimately have their roots in an imaging platform. Consider this recent BPO solution offered to a financial firm: The client, a regional financial organization, had a lending process that was paper and labor process intensive. The file room for paper loans was difficult to manage and access. The solution provider (an imaging dealer) working with the client’s Process Owner, identified the need for an integrated conversion and capture solution that would support both front end origination of loans and back end servicing requirements. Now ask yourself if you are ready or informed enough to have a conversation like this one. Do you have the skills necessary to even begin the conversation that affords the Process Owner the opportunity to disclose the process pain that puts you in a position to be a real partner in the solution? This conversation is not nearly as intuitive to the imaging dealer as it was with the MPS conversations we labored over five years ago.
The solution to this type process pain was to perform a back file conversion of the file room, scanning and indexing the hard copy loan documents into a digital filing format. Phase two was the development of a process and production roadmap that would integrate loan file imaging with the bank’s document management system. This transaction successfully yielded nearly $1,000,000 to the solutions provider over the life of the contract. And the client realized a reduction of almost half of the time previously required to onboard a loan; in addition, internal and external auditors now have more protected access to all account information, increasing the turnaround of loan file review, while reducing business and travel associated costs.
Forming strategic partnerships to fully service clients is often critical, depending on the business processes you wish to provide. The Pros Elite Group has two specific partners: Mitch Morgan (and Chris Ryne) of Growth Achievement Partners, and Kern Lehman of Optimize BPO, who are educating Pros Elite Group members in this evolving next paradigm. Morgan focuses on the internal developments of a BPO Sales and Marketing effort while Lehman focuses on utilizing outsourced capabilities to resolve clients’ process problems and challenges. Both of these organizations’ philosophies co-exist in a dealership environment. Lehman refers to his program as Business Process Optimization in a Box, or BPO in a Box. He will join me in presenting this topic at the upcoming ITEX Expo in Las Vegas next April, explaining his program in further detail.
In the meantime, Lehman shares the following insights about BPO in a Box:
The growth of the business process outsourcing (BPO) market is expected to surge in the coming years, and it isn’t expected to slow down anytime soon. According to IDC’s new Business Process Outsourcing market forecast (May 2012), the U.S. BPO market is expected to grow at a five-year CAGR of 4.2 percent, to $92 billion in 2016. U.S. BPO growth slowed a bit in previous years, in direct relation to the recession, but according to GIA research, the United States is now the largest regional BPO market. In fact, BPO is one of the fastest growing sectors in the IT services/outsourcing industry.
While business process outsourcing initiatives have predominantly been focused around Fortune 1000 and globally-oriented companies, advances in capture technologies, data interchange and Cloud solutions have created a platform for cost effective adoption by small/mid-size organizations and local government entities.
The emerging opportunity in this market segment lines up very well for office imaging dealers who enjoy some unique advantages in this space as a result of strong relationships and trusted advisor status that they have earned with large customer bases. They are learning that they can leverage these relationships to facilitate a conversation with top decision makers about expanded solution offerings. They already are providing technology solutions that easily map to business process outsourcing offerings. Lastly, they have strong sales and marketing capabilities that few of the current BPO providers possess.
There are, however, some considerations that can be significant barriers to entry in capitalizing on the advantages. These include:
• Diverse & complex technology infrastructure & personnel knowledge requirements.
• Geographic bandwidth to support national service platform & associated deliverables.
• Expertise needed to support multiple verticals with widely varied & complex processes.
The “BPO in a Box” business model was developed to help dealers leverage their advantages and mitigate the above barriers, allowing rapid entry into the BPO practice, realization of associated residual income and deepening of the customer relationships. The benefits of this type of approach can be significant in that the imaging dealer will now have a strategic partner and/or “white label” business unit, to dealers for field sales opportunities and servicing of BPO contracts. Perhaps more importantly, this will mitigate the risk factors for dealer in compliance, regulatory and Service Level Agreement (SLA) performance.
BPO in a Box provides access to a network of best in class BPO providers with national (and international) coverage in a broad array of verticals and associated processing disciplines. The dealer will now possess pre and post sales consulting, project coordination and assembly of best value resources with unbiased objectivity to meet their client goals. If the average dealer tried to assemble all of these capabilities on their own, it is safe to say that it would take 3-5 years to accomplish what BPO in a Box can deliver immediately.
Whether imaging dealers elect to utilize BPO in a Box type partnership or attempt to build internal business units, one thing is certain given the flurry of activity by manufacturers and software providers in our industry. If dealers don’t become engaged in facilitating BPO tie-in to their existing core deliverables, they will find themselves more than ever before, at a competitive disadvantage against the larger manufacturers direct organizations that are moving forward to become “services providers.” It’s not too late but BPO, like MPS, will not wait long for you to catch up. To learn more, join us at ITEX 2013 in April (www.itexshow.com).