In my last post, I talked a little about silos and their effect on business. Today, I want to outline how we handle integrated business process outsourcing (iBPO) here at Sutherland. So, joining me is our Sean Tinney, Vice President, Finance & Accounting Outsourcing Services, who works closely with our client partners to establish the integrated approach.
DK: Sean, give me a 30-second top-down description of iBPO.
ST: Integrated BPO is a holistic end-to-end view that takes front office activities and links it to back office activity with integrated tools and technology. The output integrated processes that lead to a better quality of reporting, better trending and analysis, and ultimately a good foundation for predictive and prescriptive analytics.
So instead of disparate service offerings or add-on services or even enabling services, it’s all part of the way we do business and how we deliver services. It allows us to break down all those barriers to cross-tower communication.
DK: When working with a client partner, how do you set the framework for an integrated approach?
SK: We start by establishing three things:
- The Technology Landscape – What are the current systems in place to be able to deal with customers, to process orders, to reconcile the books, to track receivables, plan promotions, and so on and so on.
- Process Identification – We use a RAPID (Robotics Automation Process Identification) system to identify the process and sub-process activity steps within the entire value chain – from contract negotiation through to reconciliation – that can be automated. We can then see what needs to be automated, for greater velocity, greater accuracy and a smoother transactional back office environment. During this stage, we also identify other technology layers and “wrappers” that can be deployed to enhance operations. This all non-invasive and does not place a large burden on our client partner’s IT departments.
- The Future Vision – Once we know what can be automated, we can look at the “to be” state – what will this new environment look like. We establish the processes and dependencies for the new way of doing things, as well as governance and the change management plan.
DK: In my last blog post I gave the example of Order-to-Cash (O2C) as a function that crosses both the front and back offices. The customer-facing functions are all about service excellence and relationship building and the back office functions require you to always be optimizing for efficiency. How do you reconcile those two very different outcomes?
SK: Yes, exactly. In our end-to-end iBPO solution, we take front office, voice-driven, customer-facing activities and link them to the back office through the common thread of the order processing function. Each one has a separate process treatment. The key is to instead view O2C as one whole value stream. We’re able to do this through integrated tools and technology.
For the customer-facing activities, we focus on what is more “white glove”, what data, metrics, tools, technology and skills are required for a higher quality service and a better overall customer experience.
The second part is more transactional. That is, processes that are really geared around velocity – a quick turnaround for repeat orders, common orders etc. To get them processed as quickly as possible to get them to the fulfillment space, so revenue recognition can start a lot earlier.
An order processed quickly and accurately has numerous downstream affects on the back office environment leading to more accurate invoicing, speedier and more automated cash applications, fewer disputes to resolve and more on-time payments requiring less collection activity.
DK: What’s the outcome of these two sets of data points?
ST: We can now track how processing and ordering impacts customer experience. By creating a desegregated ordering process system, we can see the cost of quality. For example, what is the impact to your financials if you process an order incorrectly, what is the impact to your customer experience, and what’s the impact to your overall back office environment? What are the dependencies that are triggered when an order is processed incorrectly?
Conversely, we also see the effects of when that order is processed correctly, including the impact on the customer and the overall cost reduction. The cost of quality metric is something you typically don’t see tracked because it takes both qualitative and quantitative metrics. This is where our analytics program comes in, as you need to look at all the variables that come into play.
We design the process around the enabling technology, and the data points and analytics we want to run on the back end. This creates seamless, automation-to-employee-to-actionable data. Our clients can understand how the organization is impacted by every customer they touch.
DK: Is it all about the technology, then?
ST: Everyone thinks that iBPO is a technology story, but it’s really about the people. You hired your senior level managers and line-level staff for a good reason. You didn’t hire them to be copying and pasting data from one system to another. You hired these people to make smart decisions and drive a better customer experience.
With better data, you can empower your best people to make better decisions and be more strategic. It allows them to do their job more effectively and more efficiently.
DK: How does this help transform a business?
ST: It’s not about just getting the best out of the front and back offices, but about really giving the client a roadmap for change and future growth.
Using the example of O2C, there is a pre-sale process, an order and then the delivery or fulfillment of the order. It all really comes together in order processing. That’s the lynchpin. So we look at breaking down those barriers and silos, and creating a new governance model.
The inter-related departments can then get a greater understanding of the forces around them. This bigger view really does enable change, and make our clients more adept at using data to make actionable decisions and transform their business. There are no more disparate groups, no stakeholders who are out of the loop, and so they can go forward in unison and make these changes.
What we bring to that is the governance format, the change management process, so that everything is controlled and managed. It provides a whole new level of flexibility and insights for our clients that they wouldn’t necessarily have had before prior to an outsourced environment or with their previous provider.
DK: Thanks Sean.
If you are interested in learning more about iBPO, why not arrange a free assessment with one of our finance experts? Schedule an appointment today.