Business Process Outsourcing: The New Operating Model

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How to profitably deliver services to customers has become a defining challenge for businesses today. There are a number of reasons for this. One is because customers don’t just expect more, the expectations themselves also change quickly, radically shifting profits. The other is that executives face an increasingly complex landscape of technologies, methodologies, and both regulatory and compliance pressures to ensure that new processes are standardized and traceable.

This sea change for both B2B and B2C businesses is fundamentally transforming what “services” means. Our research suggests that as much as 45 percent of employee activities can be automated. That is calling into question how businesses work, build skills, and deliver customer experiences.

This reality is particularly vital given the high-stakes nature of today’s digital environment. One industry research has revealed a "power curve" where the top quintile of performers capture more than 90 percent of the economic profit. The 24 companies that make up the top 1 percent of sample earn—astonishingly—the same as the next 87 companies combined.

Moving into the top quintile, or even improving within it, is not easy. Most companies have embarked on journeys to transform their business processes and operating models, of course, but performance has been uneven. The efficiency levels of many service industries, for example, have barely changed over the past decade. Confusion about what the primary "axis of change" is—from customer expectations to technology—as well as which combination of capabilities to build and in what sequence, has been the primary culprit. Yet we know that companies across industries can successfully make the leap when they put in place a sound strategy and commit to making a specific set of moves.

There are recurring patterns of success, and a step-function improvement in productivity is one of the leading forces that allows companies to move up the power curve. Experience has shown that a series of bold initiatives that reinforce each other and create impact cumulatively is the recipe for a successful transformation.

When it comes to digital services, these big moves are all about disrupting how your business works today and are necessary to put in place a next-generation operating model that can sustain new levels of speed, agility, efficiency, and precision. We believe that requires a three-part program:

  • Designing the next-generation operating model and transformation roadmap.
  • transforming the customer journeys that matter through a combination of capabilities and approaches.
  • building up cross-functional foundations to scale and sustain the benefits of the transformation.
  • With our experience in helping organizations transform and improve the business functions, we have come up with a list of questions that each executive needs to address in one way or another to engage in a successful digital transformation exercise.
  • What is the operating model needed to simultaneously disrupt existing processes, drive value, and improve customer experience while reducing costs to serve?
  • How do we build it and what does the sequencing look like?
  • Why should we focus on end-to-end journeys, and which ones will deliver the most value?
  • How can we use design thinking to reinvent user experience for our most essential customer/process journeys?
  • What is the right mix of capabilities and approaches we should develop to meet our primary objectives based on our starting point and aspirations?
  • How do we set up teams to be successful in a digital world?
  • What is the IT architecture we need to support a next-generation Operating model?
  • How can we scale and sustain the operating model across the entire business?
  • How can we build a new and healthy organization that supports an agile and customer-centric culture?
  • What management systems should we put in place to embed the new skills, technologies, and processes in the organization?

Leadership, in fact, underpins whether the next-generation operating model becomes a reality or remains an aspiration. As the primary change agents in the business, CEOs and senior business executives, in particular, have an outsize influence on the success of this transformation. Their roles must focus on forging alignment at all levels of the organization around journeys, championing new models of working that embody speed and agility, and anchoring a transformation through bold and effective decisions.

With Automation, Machine Learning and AI knocking at our doors, it is a smart strategy to engage with partners who understand business and technology imperatives to help your organization make a painless transition.

At Jinigram, We have designed and developed a step by step Max Impact Framework (AI-MIF) to help our customers apply design thinking to AI enabled business process redesign. Further, we have the technology stack that can seamlessly AI enable your customer centric business processes at no additional costs. To learn more contact us at engage@jinigram.com

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Kamal Bakshi
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