As we’ve mentioned on this blog before, the BPO market is changing, and as an industry we need to go beyond the traditional “your mess for less” approach. To be fair, it has – best practices and improved efficiencies are the cornerstone of this industry.
Especially in the F&A milieu, we’ve transformed from being “inputters of information” to insightful analysts. And, to remain competitive, BPO companies must deliver something that is often talked about but not seen often enough – real innovation.
The biggest challenge of inculcating the culture of innovation in an organisation is the transition from PowerPoint to Practice. How do you create an environment that actively encourages new ideas and insights? Not only that, but how do you embed it systemically?
Innovation is the critical driver but we need to keep in mind that an innovation doesn’t need to be a “flying cars” idea — simple ideas like pre-sliced bread can have just an enormous of an impact.
I should stress that we are not suggesting that everyone in the organisation should be continuously innovating. We don’t want all of our accounting clerks experimenting with different ways of making accounting entries or our technical support staff trialing different technology solutions of their own bat.
However to nurture this culture that encourages appropriate use of innovation, a true partnership between buyer and provider is required. This partnership must have three critical components:
1. Mutual benefit. The idea that innovation needs to create added value and that that added value should be shared between the client and the provider, is quite a shift in the belief system of most clients as well as the advisor and analyst community. However, there must be an honest joint assessment of the business model, one that shares the value creation and profit objectives of both parties.
In Sutherland, for instance, gain-share and outcome-based engagements constitute a significant proportion of our revenues. In one specific gain-share based solution-set we generate almost $200 million of annual revenues for our clients and we take a share of that. New revenue created and then shared.
2. Innovation collaboration. It should be noted that an innovation-fuelled relationship frequently entails changes on both sides and requires a higher level of inter-dependence and collaboration than conventional outsourcing engagements. Partners must work together to try new processes, technologies and delivery models. Allow for failure but work to prototype and explore the value jointly. This requires advanced capabilities within the provider to facilitate such activities.
3. Governance structure. This would be responsible for measuring not just the performance against the current needs and expectations but also the health of the partnership as well as the innovation occurring within the relationship. Good governance allows you to achieve a “common mindspace” with clients, a stronger relationship, and ultimately more value.
I strongly believe that a dedicated team focused on bringing those capabilities to clients and client service teams, is an effective way to achieve this. Providing the tools, methods and specialist facilities purpose designed to enable innovation.
At Sutherland, we have created teams whose primary role is to facilitate and amplify the passion for innovation that exists across both our own and client organisations and leverage to our mutual benefit. Over the coming weeks, join me as I outline how these distinct but connected teams work together to create an innovation eco-system.
Is your BPO helping you innovate? I invite you to schedule a free assessment of your current practices. Comments? Questions? I’d be happy to answer.