Smart Hands, Smart Robots Enable Business Processes

New business process services are emerging that integrate human process work (the smart hands) with collaboration and automation via technology platforms (the smart robots).

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Businesses have been outsourcing processes such as payroll, order processing and customer service for years. But to achieve maximum profitability and agility they should leverage a new type of outsourcing called business process as a service (BPaaS). BPaaS goes beyond traditional BPO in that the service provider not only manages the business process but owns and manages the systems and applications that enable that process. It combines skilled people with automated workflow and collaboration systems. This provides more scalable, more flexible services in more process areas than ever before.

Forces Driving Change

The proliferation of knowledge-sharing tools and reduced telecommunication costs has made it possible to entrust partners with more and more processes. As these developments permeate the business landscape, four interconnected forces are fundamentally changing how organizations perform work, and the types of customers they must satisfy. They are:

• The globalization of work and markets;
• The influence of younger, “millennial” customers and workers who grew up interacting and collaborating online
• The increased use of globalized, virtualized workplaces to increase productivity and maximize knowledge sharing
• New cloud, mobile and social tools that help companies make more informed decisions, respond more quickly to customer needs and mine rich business insights from systems of record.

Traditional business process outsourcing was usually driven by cost reduction, which is still essential. But cost savings alone won't help an organization become a better bank, retailer, insurance firm or movie studio. To compete and thrive amid these secular forces of change, organizations must rapidly develop new capabilities, as well as new products and services. These include technology platforms that create a more collaborative workplace and the ability to handle virtual interactions and transactions with customers and suppliers.

To achieve these capabilities, companies need a new form of business process outsourcing that helps them become more agile, focus on core competencies, and delivers tangible business outcomes. This new form of outsourcing is business process as a service (BPaaS.)

Business Process as a Service

BPaaS solutions offload critical but non-differentiating work from the customer to the provider. They are typically priced based on business outcomes rather than per transaction. They are more easily scalable than processes delivered in-house, and improve agility through faster implementation of new projects and changes in operations. This is because the provider owns the technology platforms (the IT infrastructure, software and applications) underlying the business process and the “smart robots” (e.g., in the form of virtualization and auto-scaling technology) that can quickly meet changing business demands.

The service provider also employs “smart hands” (people) skilled in industry-specific knowledge processes such as healthcare claims processing, investment banking trade settlements or clinical data management).

BPaaS in Action:

Leading organizations are using BPaaS solutions to increase profit margins, improve business flexibility and strengthen balance sheets. Cognizant has used the BPaaS model to deliver:

• Soup-to-nuts analytics and reporting for a leading pharmaceutical company.
• A comprehensive order management solution for a telecommunications provider.
• Commercial intelligence-as-a-service for a pharmaceutical and medical product provider.
• Clinical data management for a biopharmaceutical company.

Moving Towards BPaaS

A growing number of market leaders are implementing BPaaS to drive superior business performance. To unlock BPaaS value and mitigate risk, we suggest the following:

• Embrace a “crawl, walk, run” strategy: Start by assessing outsourced applications clustered around a critical business process and then pilot and scale those services as your experience grows and new business opportunities arise.
• Consider a surround and extend strategy: Build BPaaS services around collaboration platforms that supplement, but not replace, systems of record such as ERP.
• Vet selected providers for their industry knowledge, as well as your infrastructure and process idiosyncrasies: Documented industry expertise, discrete process understanding, and technological wherewithal (i.e., cloud service delivery) and vendor relationships will be required to implement and de-risk BPaaS.

Taking these steps will help organizations implement BPaaS in a timely and cost-effective manner. And, more importantly, boost business performance by enabling companies to tap cloud delivery of business-critical services that can be handled by experts across the world in highly collaborative and automated way.

Learn more about Business Process as a Service.