The BPaaS journey: What lies ahead?

As in software, cloud with its on-demand ‘as-a-service’ model has emerged as an attractive delivery option for business process outsourcing. Any enterprise challenged by up-front investment costs that traditional outsourcing entails has a more flexible, accessible, and affordable alternative with BPaaS. The potential for platforms in general and BPaaS in particular holds immense promise. Here are three settings that hold enormous possibilities for BPaaS.

E-governance Today, each government / department independently assesses its needs and commissions technology/automation projects. But there’s a common thread running through government processes. For instance, in the Indian context, the e-governance portals of each of the country’s 29 states and seven union territories (UTs) show varying levels of workflow, automation, paper work, touch points, etc. This is a huge opportunity to develop a common core platform that all states could use on a subscription / per user basis. Ration cards, driving licences, benefits administration, vehicle registrations, property registrations, and more; all services could use a common platform customised to suit local needs. The core platform would contain the common minimum features portable across IT systems for consolidation, reporting, and analytics. This would make doing business in India simpler and faster—a key governance objective across states and UTs today.

Start-ups
Core process needs of start-ups and smaller companies are common. For instance, filing taxes accurately, processing invoices quickly, making payment to vendors, and being on top of their financials. This presents an opportunity for ready-to-use, pay-per-use platforms that would give start-ups the window they need to focus on their core business.

Here’s an example: A start-up in Bangalore provides small real estate developers with a platform that expedites new project launches. The platform has an in-built collaboration portal, Q&A, document management, payment scheduler, photo sharing widget, and more. In the past, each real estate developer built their own portals. Now, all small and mid-sized real estate firms have easy access to a portal for a subscription fee.

Large organisations
Most of the large organizations, inspite of their large IT departments and budgets, suffer from the challenges outlined below.
1.    Lack of in-house IT expertise
Managing in-house expertise to address IT plumbing needs comes in the way of staying agile. At a fraction of the cost, best-in-class platforms can meet every organisation’s needs—financial reporting, analysis, invoice processing, sales lead processing, treasury and more.
2.    Inefficient processes
Organisations, especially those that have grown inorganically, have allowed significant inefficiencies in their business processes and operations accumulating a plethora of systems.
3.    Inability to keep pace with changing global requirements
It is a humongous task for in-house teams to keep up with global changes on tax laws, governmental reporting requirements, disclosure norms, etc. Third-party platform solutions have dedicated product / domain teams that stay abreast with such changes and push these upgrades to clients almost immediately.

Service providers must differentiate or disappear
Soon, more and more companies will adopt third-party platforms to perform multiple routine functions.

Differentiation among platform players will be hard to come by initially. Mature players will begin differentiating themselves with offerings around compliance, end-to-end servicing, data security and high volume handling. BPO service providers who typically have grown on labour arbitrage are already reviewing their business models; replicating the clients’ processes in a low-cost environment will no longer provide sustained competitive advantage. The need of the hour is a winning combination of platforms, and qualified and trained personnel to provide comprehensive service.

It is time that businesses re-define for BPaaS
In the new age of BPaaS, CIOs should start demanding clear strategic metrics that validate new development projects and reasons for not choosing cloud-based platforms. Historically, the reasons quoted for “new”/ “custom” development are “our processes are unique”, “our compliance needs are complex”, “and cloud doesn’t provide data security” etc; these are increasingly becoming irrelevant.  The third party platforms space is seeing lot of action with leading players vying with each other to provide the most comprehensive platform experience. It is time for the CIOs to have an adoption strategy!

- By Ramachandran Guruswamy is head of F&A Key Solutions at Infosys BPO

The thoughts and opinions shared here are of the author.