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A Winning Combination - The Role that BPOs Can Play has Shifted

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Editor Coda
2013/08/14

There are targets aplenty for CFOs to hit. Firstly, they must manage a controlled environment, with no fiscal anomalies that might provoke enquiry. Then, they have to run their huge finance operation at a cost of closer to 0.5 per cent than 4 per cent of sales. On top of that, they are tasked with running finance in an elegant, innovative fashion, which supports the ambitions of the company. 

Five years ago a CFO may have looked to a BPO (business process outsourcing) to assist in hitting the cost-reduction target, largely through the labour arbitrage component. But in recent years, businesses have been evaluating the nuances of the BPO industry, and the sense of the contribution a BPO might make has shifted.

This shift is evident in the slow-down in demand for traditional outsourcing, leading to a shortage of multi-process outsourcing deals. Large nine-figure deals of the past have gradually fallen away, the trend turning now to smaller eight-figure deals. BPOs will struggle to grow if they continue to offer traditional outsourcing services in isolation.

So, the question is what are the current opportunities for BPOs in the mid- and enterprise markets now that the demands have shifted? At sharedserviceslink we’ve calculated that only 20 per cent of the largest 15,000 companies in the world have outsourced multifinancial processes. This leaves at least 12,000 companies with which BPOs can potentially forge new relationships, perhaps combining traditional offerings with other, higher value services.

Clearly, the BPOs have been eager to mine this potential as they examine their role in the shifting market. Outsourcers such as EXL, Xchanging and Serco have been developing value-adding services including consulting, analytics, and working-capital expertise. And pipelines are fattening. These higher-value services are lower-risk investments. And, with their broader applicability, they connect neatly with a wider range of targets. Everybody wins.

Have a look at the full shared services and outsourcing report below.

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