The BPO industry has always been associated with labor arbitrage, service level visibility and a focus on process improvements and transformation. The reason companies turn to us for Finance & Accounting outsourcing is to provide those efficient, secure and repeatable processes at a reduced cost.
However there is a problem with that and this is what it is:
- Things are changing for our clients, faster now than ever before.
- There is a convergence of social interaction, mobility, analytics and cloud.
- Needs (and expectations) have evolved beyond providing tactical fixes to enabling end-to-end global services
- The burgeoning robotic process automation trend has the potential to change the BPO industry as we know it.
- Volatility and change is the new normal.
In this environment, “your mess for less” solutions “lifted and shifted” are no longer a source of competitive advantage.
This creates challenges and, of course, opportunities. But most of all, it demands that BPO companies need to be the enablers of innovation and change rather than the guardians of well-defined and repeatable processes.
Traditionally, innovation is rarely discussed at the RFP stage. Or, if it is, it is at an aspirational rather then ‘implementational’ level. Advisors and prospective clients need to normalize the bids, and so there is often a tightly defined RFP process that insists on a pure apples-to-apples solution. As well, conventional commercial models tend to be input or effort driven rather than outcome or results based. So, the base contract is struck based on a design that fits the current knowledge of operations and the rules by which all contenders can play. Innovation and transformation struggle in this environment and therefore, rarely exist as a component weaved into the overall solution and client/service relationship.
That’s not to say that efforts aren’t made to incorporate collaborative innovation. Sometimes client companies will commit to “innovation days” in contracts, essentially periodic innovation discussions. Others will suggest the service provider deliver innovation during the course of the contract. While these are well intentioned gestures, the problem is that they are often isolated events and not directly linked to performance and overall objectives.
This may be because BPO hasn’t been known for being terribly innovative. When most people think of transformational business process outsourcing they think of Six Sigma or Lean – all the operational aspects designed to reduce costs and make process gains. However, clients are also looking for those inspired insights and “Aha!” moments. Yet, unless innovation and transformation are built into early conversations with the client, they are bound to be elusive or retrofitted after the fact, never a successful approach. A good, moderated bid process should include and encourage ongoing innovation – asking, how will we ‘innovate as partners in this journey’.
Elevating the Conversation
There needs to be a fundamental reboot in the way most RFPs and the subsequent solutions are approached, designed, deployed and supported. We’ve got to think differently, moving the conversation from headcount consolidation and tactical tools to focusing on the end-to-end business impact.
To bridge the gap between intent and practice, there has to be a more consultative and strategic relationship between client and service firm. One that is less contract driven, and instead is a conversation to establish the partnership’s overall goals. Because, real substantive change is bigger than a single scope RFP; it’s about understanding the end-to-end global intentions of the prospective client – the challenges, the market dynamics, trends, etc. – and then putting the mechanisms in place to work together to achieve them.
A Catalyst for Innovation
Here at Sutherland, we’ve created the Innovation Lab to foster the culture and approach to achieve successful partnerships. The Lab’s primary role is to facilitate and amplify the passion for innovation that exists across Sutherland and client organizations and leverage this to our mutual benefit.
Within the Lab, we have several sub-labs that help us better focus on the components we believe exist in a successful Innovation culture – Catalyst, Experience, Incubation and Display.
- Catalyst – engaging, thinking, creating
- Experience – studying, watching, understanding
- Incubation – trying, testing, building
- Display – exhibiting, educating, training
It is our Catalyst Lab that strives to facilitate the discussions and discovery that goes on between Sutherland and our clients. In this lab we have tools to aid the ideation-to-realization cycle. We help in the early stages to brainstorm about the client’s real needs by looking at their more pressing pain points. The Catalyst Lab helps create the framework to encourage innovation, through elevating the discussion and then implementing the methodologies to share and collaborate on the best of Sutherland expertise and client experience. It allows us to leverage the best of both organizations and to better serve our clients as true innovation partners.
These initial and then ongoing discussions help to forge a relationship that is more strategic than the typical “principle/agent” relationship of the past. It also accelerates the identification and prioritization of valuable investments and initiatives – across verticals, delivery centers and client organizations. With our Catalyst Lab, Sutherland hopes to advance the bid process, ingrain Innovation thinking, and establish relationships suited to create real end-to-end value.
In the coming months I look forward to sharing some of our techniques and successes, and to outlining the other key components of the Innovation Labs.
If you’re interested in learning more about how we approach business, schedule an appointment today. Comments? Questions? I’d be happy to answer.