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Disruptive Forces and Their Impact on BPO: Part 5 - Will Software Destroy the BPO Industry? Or Will BPO Abandon the Software Industry in Favor of Platform Components?

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BPO has always depended on partnerships with third-party software providers to provide supplementary platforms around client core systems to provide specialist functionality in areas like procurement, collections, & reconciliation handling. However, there is a danger that this can lead to a Heath Robinson (or Rube Goldberg) combination of applications, involving expensive software or SaaS licences, that can be difficult to integrate with process models and analytics, and where IP is shared or handed to the software company. So BPO vendors are increasingly looking at alternatives to COTS software.

However, BPO vendors have often tended to use their own proprietary tools in key areas such as workflow, which has had the advantage of enabling them to offer a lower price point than via COTS workflow and also enabled them to achieve more integrated real-time reporting and analytics. This approach to develop pre-assembled components is being further accelerated in conjunction with cloud-based provisioning.

Now, BPO vendors are starting to take this logic a step further and pre-assemble large numbers of BPO platform components as an alternative to COTS software. This approach potentially enables them to retain the IP in-house, an important factor in areas like robotics and AI, reduce their cost to serve by eliminating the cost of third-party licences, and achieve a much more tightly integrated and coherent combination of pre-built processes, dashboards and analytics supported by underlying best practice process models.

It also potentially enables them to offer true BPaaS for the first time and to begin to move to a wider range of utility offerings - the Nirvana for vendors.

Coming next: The Internet of Things – Is this a new beginning for industry-specific BPO

Previous blogs in this series:

Part 1 The Robots are Coming - Is this the end of BPO?

Part 2 Analytics is becoming all-pervasive and increasingly predictive

Part 3 Labor arbitrage is dead - long live labor arbitrage

Part 4 Digital renews opportunities in customer management services

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