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www.infosys.com/bpo
BPO Future Forward
Inside: 6 Thought Papers
Technology the “New Normal”- Enabling Businesses
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1. Social Networking in Customer Care Centers
2. The death of distance in Supply Chain
3. Designing an Optimal Technology Landscape – ForAccounts Payable Transformation
4. Special Tools for Special Purposes – Addressing theSourcing & Procurement Challenges
5. Winning the Red Queen’s Race – Redoing the math ofvalue creation for Communication Service Providers
6. Dealing with the “New Normal” in Finance Operations
7 - 11
12 - 15
16 - 21
22 - 27
28 - 32
33 - 39
IndexINDEX
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Dear Reader,
Organizations around the globe are continuing to grapple with one of the mostchallenging business environments. The increasingly rapid pace of technologicalchange has made technology the business enabler providing us with opportunitiesto innovate, progress into newer markets and develop newer customer centric productsand services.
Businesses need to connect use of technology to their business strategy to focus ontrimming excesses, to focus on their core strengths and get to know how technologycan enable and drive value to their businesses.
It gives me immense pleasure to present to you the 4th edition of the Infosys BPOJournal which has Technology the “New Normal”- Enabling Businesses as its centraltheme, and brings views from a global strategic advisory firm and Infosys subjectmatter experts.
This Journal articulates strategies and solutions to multiple industries by thoughtleaders. This includes areas such as emphasizing the importance of designing anoptimal technology landscape to transform the account payable function withinorganizations. It also focuses on implementing Special Tools which could addresssourcing & procurement challenges and how technology can trigger the death ofdistance in the supply chain. We also focus on redoing the math of value creation forCommunication Service Providers, and adopting Social Networking to facilitatecollaboration in customer service centers and transforming it into a training platformto increase its efficiency.
I would like to thank The Hackett Group and all the authors for their contribution tothis edition of the Journal.
I welcome your feedback on this edition at [email protected]
I wish you all a very happy and prosperous New Year.
Best regards,
Ritesh IdnaniHead of Worldwide Sales and Marketing
F o r e w o r d
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Social Networking can be adopted by a Customer Care Center to facilitate
collaboration. By capitalizing on Social Networking, the Customer Care Center can
be transformed into an informal learning platform that enables traditional training
and informative sessions. Team members can benefit from knowledge sharing and
collaboration leading to increased levels of efficiency at the Customer Care Center.
Social Networking in Customer Care Centers
Rajesh Cheeyancheri
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Addressing Challenges of Customer CareCenters
Companies are focusing on customer service to differentiate
themselves, ensure customer loyalty and retention, compete
effectively and remain profitable. As products and services
become more complex and sophisticated, providing customer
support becomes challenging. For instance, resolving a
problem for IPTV service, a next generation television service
offered by telecom companies, is far more complex than
resolving an Internet service issue.
Companies must innovate and launch new products or
services faster to ensure consistent revenue and growth. As
the shelf life of these products and services reduce, Customer
Care Centers have to re-train their staff more frequently to
handle new services. Since these Customer Care Centers
are located in multiple geographies, the cost and logistics
associated with training is daunting.
In a majority of industries, a technology monopoly is
redundant. The gap between the market leader and the
followers is slim because technologies/skills are easily
adopted. Consequently, companies have to find a distinctive
value proposition to sell their products. Packaging extended
warranties and selling premium after-sales services with a
product have now become a common practice. Customers,
who buy these additional services, demand that their
problems are resolved promptly and efficiently. Customer
Care Centers need to innovate to address these challenges.
Bridging Social Networking with the CustomerCare Center
Social Networking and Customer Care Center are very
different concepts.
Social Networking is becoming increasingly popular because
it is associated with individual lifestyles and caters to the
individual's personal activities. It works in a relaxed
environment with no real deliverables or accountability.
In contrast, a Customer Care Center is a highly reactive and
time-bound environment - the clock starts to tick as soon as
a customer calls and stops when the customer ends the
conversation. The efficiency of a Customer Care Center
operation is constantly evaluated and enhanced using a
number of Key Performance Indicators (KPIs). To meet these
goals, Customer Care Centers comply with pre-defined
standardized processes for their day-to-day operations.
In a Customer Care Center, human capital is a critical resource
- agents/advisors, team leaders and floor walkers work
towards a common goal. Human capital can be empowered
by applying the underlying concepts of Social Networking
such as forming teams or groups to share experiences. For
example, when an advisor discusses with his/her peers how
they handled an irate customer, it offers options to manage
similar situations in the future.
Such a collaboration at an advisor level helps improve the
overall skill level of its staff and creates a more informed
and empowered organization. In addition to the formal
training and awareness sessions, collaboration enables
knowledge sharing obtained through hands-on experience,
which will otherwise remain confined with the individual.
When collaboration gathers momentum and attains critical
mass, it can become a rich repository of data which can be
analyzed to identify the areas of improvement or emerging
trends.
For advisors, it provides an opportunity to transcend routine
case handling and encourages them to take ownership in
their work. It offers a platform to showcase their work and
helps them build a repertoire of case handling skills that is
not always imparted in training. As clients and counterparts
are located in different geographies and have different ways
of talking and writing, a forum to view anecdotes of advisors
is useful to understand the nuances, conversational styles
and cultural cues embedded in a conversation. Such skills
cannot be imparted in classroom training or through
documentation.
Integrating Social Networking into theCustomer Care Center
A Customer Care Center works in a gated mode - advisors
have access only to a pre-defined set of resources (tools,
people, applications, etc). The mode of operations is defined
by factors such as the business model, data protection,
operational efficiency, etc. These factors must be taken into
consideration when introducing concepts of Social
Networking in a Customer Care Center.
System Generated User Modified Content (SGUMC)
A fault, case or ticket is the entity around which the whole
Customer Care Center operates. When a customer calls the
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Customer Care Center to resolve a problem, it begins with
the creation of a 'fault', a 'case'or a 'ticket'by the CRM
application. In its lifetime, the fault is attended to by various
people with a sole objective - close it at the earliest. Once a
fault is closed, for all practical purposes, it just becomes a
quantitative parameter in the different metrics generated
by the Customer Care Center. Invariably, the qualitative
aspects are not captured anywhere.
The System Generated User Modified Content (SGUMC) is
an entity envisaged to capture the qualitative aspects when
an advisor at the Customer Care Center works on a case.
The SGUMC entity will have its origin in a system generated
fault, case or ticket that can be modified by advisors at the
Customer Care Center to record their observations, analysis,
comments and anecdotes. Once created, SGUMCs can be
shared and exchanged among advisors.
Advisors and Budadvisors
Any agent or advisor at the Customer Care Center can
participate in such a collaborative environment. Just as in
any social networking environment, advisors can form groups
and communities. A budadvisor is an advisor who shares a
special relationship with another advisor. For example, if
Ted is a budadvisor of Pal, Ted can comment/update Pal's
SGUMC. Advisors select which advisor can become their
budadvisor.
Public Sharing Space
Every SGUMC created in the Customer Care Center will be
stored in a Public Sharing Space. The SGUMCs created by
advisors are a good source of information for anyone involved
with the Customer Care Center. For example, new recruits
can use it to get up to speed on their work. Similarly, training
teams can use it to examine any area which requires attention.
SGUMC in Action
Let us evaluate three potential SGUMCs and how they
interact with different actors:
1. DreamCase
2. NightmareCase
3. Case2Watch
DreamCase
Every advisor will have cases that worked perfectly. These
cases can be self-motivating and provide a 'feel-good' factor
when one looks back at the work. If an advisor feels that the
case proceeded well, it may be worthwhile sharing it with
buddies. The benefits are two-fold: 1- More people get to
see a case handling they probably can emulate and 2- It
validates the advisor's case handling with his/her peers. It
can also lead to 'bragging' in Social Networking parlance.
Figure 1: Creating and Sharing DreamCase and NightmareCase SGUMCs
Step 1: Create SGUMC
Cases
DreamCase NightMare
SGUMC
Step 2: Share SGUMC with the various Actors
Step 2Step 1
DreamCase NightMare
UserUser
Public Sharing Space
Budadvisor
Budadvisor BudadvisorBecome Budadvisors
Advisorsat the
Center
Share it withBudadvisors,
Exchange comments
Submit SGUMC toPublic Sharing Space
Access SGUMC fromPublic Sharing Space
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An advisor can selectively build his/hers DreamCase SGUMC
and share it with the advisor community. When a DreamCase
is created, it can lead to different situations:
• The advisor can share it with his/her existing
budadvisor. The budadvisors can comment on the
cases or begin discussions around it. One interesting
use of the DreamCase can be to use it in training or
team huddles where the participants can use it as a
case study and discuss it.
• The DreamCase SGUMC can also be directed to a Public
Sharing Space. Every registered user can access the
Public Sharing Space and view the DreamCase. Based
on the DreamCases, advisors may want to become a
budadvisor to the author of a particular DreamCase.
For example, if a Advisor-Z is handling a particular
customer and sees another Advisor-Y having a lot of
DreamCases around that customer, Advisor-Z can
become Advisor-Y's budadvisor.
NightmareCase
On the one hand, advisors work on DreamCases, on the other,
they have NightmareCases. While most people wish to forget
a nightmare experience, these cases provide important
lessons for the individual and the Customer Care Center. It
is important to share these experiences with peers. They
may relate to behavioral skills in handling a particular
customer or a complicated technical issue that made the
case very difficult.
In fact, NightmareCases will attract more discussion and
comments than a DreamCase.
Case2Watch
Today, services delivered to the end user are complex and
involve multiple organizations and applications. Typically,
services have numerous components and a long supply chain
spanning different geographies linked together by business
and service level agreements.
For an advisor who is one of the links in the supply chain,
the ability to know the status of the case after it had been
handed over to another organization can be helpful. It can
be particularly useful for advisors who are closest to the
end customer to ensure that the case is acted upon and not
parked somewhere. In addition, it expands the horizon of
the advisor to understand and appreciate the challenges of
other organizations that are all part of the supply chain.
The above situation can be resolved by Case2Watch, the
SGUMC created by an advisor which will be updated as
the case progresses. Another advisor who is interested in
a particular case can subscribe to a Case2Watch for
updates or to participate in a discussion around that
Case2Watch.
Social Networking in a Customer Care Center can facilitate
collaboration in a highly reactive environment. For the
Customer Care Center, it is an informal learning platform
that enables traditional training and informative sessions.
Figure 2: Case2Watch
Step 1: Create SGUMC
Cases
Step 2: Share SGUMC with the various Actors
Step 2Step 1
UserUser
Subscribe andget updatesabout theCase2Watch
Update theCase2Watch
Case2Watch
SGUMC
Case2Watch
SGUMC
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ABOUT THE AUTHOR
The challenges presented by the nature of Social Networking
and Customer Care Center must be considered before
building an application to realize collaboration. For example,
productivity and handling times are some of the key KPIs of
a Customer Care Center that are not relevant in the context
of Social Networking.
Social Networking in a Customer Care Center environment
offers several benefits, both in the short-term and long-term:
In the short-term, social networking enables:
• Sharing problem solving or customer handling skills
gained through hands-on experience to a wider
audience within the Customer Care Center
• The SGUMC to be a good source of data that can
provide insights into a number of parameters from an
advisor's perspective. Quality teams can use it for
analysis related to productivity and efficiency.
• A platform for a new entrant at the Customer Care
Center to assimilate skills and get connected with
peers
In the long-term, social networking facilitates:
• A collaborating and sharing environment to build a
well-informed team and improve the competitiveness
and efficiency of the Customer Care Center
Rajesh Cheeyancheri is a Senior Associate with Communication Media and Entertainment (CME) practice
at Infosys Consulting. Rajesh has more than 17 years of experience in the telecommunication industry
spanning technical and consulting roles at telecom equipment vendors and services companies. Currently
he is focusing on the customer service in the CME industry.
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Technology as an enabler of BPO operations has moved beyond process and
productivity improvements to being an enabler of the client's business performance.
Supply Chain BPO services offer the greatest potential in transforming the client's
business operations by bridging the distance between front and back office supply
chain processes. Supply Chain Visibility dashboards in particular have the ability to
enhance collaboration between the client and BPO vendor to optimize the global
supply chain in real time. We explore the potential benefits and impact the SCV
dashboard can bring about in managing the supply chain in an outsourced
environment.
The death of distance in Supply Chain
Shyam.R.Rao
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Introduction
As the BPO industry has matured, it has developed more and more sophisticated tools and technologies to enable its processes.
The move has been from simple inward looking tools like workflow and training tools that enabled the vendor's functions to
automation tools which help boost productivity and improve client's back office functions. The next wave of technology in
this growth curve will be those that directly impact and enable a client's business functions.
Impact on client operations1Wave1 2Wave2 3Wave3Eg: Workflow, training
tools
Vendor enabling tools
Eg: Automation tools
Tools impactingvendor and client
Eg: Supply chain dashboards
Tools impacting clientsbusiness operations
>>>>>>>>>>>>>>>>>>>>>>>> >>>>>>>>>>>>
Tool
Comp
lexity
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>
Wave technologies1
addressed the key concerns of an industry in its infancy - the enablement of operations in a stable and efficient manner. Workflow tools and technologies to enable knowledge capture and transfer were, hence immediately put into practice to ensure that the operations at the vendor's offshore locations were planned and routed through smoothly. The outcome was the successful transfer and performance of back office operations at the vendor's premises.
Wave technologies2addresses issues such as improving the productivity of client's processes being performed by the vendor. Automating tools like macros, OCR etc help to reduce effort involved and thus reduce costs and increase efficiency of processes for the client and vendor
Wave technologies3
will go beyond the process and enable the business performance of the client. This will involve moving beyond the process and look at impacting the business metrics of the client. Thus Wave 3 technologies will enable BPO organizations to go beyond the incremental benefits from initiatives like six sigma, kaizen etc and achieve exponential benefits from leveraging "tech as a multiplier" in its processes. This will be particularly effective in functions like supply chain wherein the use of technology can bring about increased visibility and the ability to pro-actively remedy and optimize the value chain in real time.
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Enabling the Supply Chain
The supply chain provides a fertile ground for the
implementation of Wave 3 technologies due to the
challenges posed in this area, as well as the exponential
benefits available from implementing tech based solutions
to these challenges. Supply chain managers are typically
confronted with several obstacles in their efforts to optimize
the value chain in real time:
• The components of the global supply chain are
disbursed across multi-location, multi system and
across partners/customers with varying requirements
and demands with no common platform
• Organizations also tend to have multiple legacy
systems that will not talk to each other seamlessly
• Observation of "danger" signals cannot be done in
real time and remedial actions taken in retrospect
sometimes result in greater damage leading to
inefficient supply chains
• Out sourced back office components of the value chain
further complicate the end-to-end visibility and control
of the supply chain
Supply chain managers are hence increasingly looking at
visibility dashboards that link the various components/
systems together and provide a consolidated view of the
performance of the supply chain through well defined KPIs.
These dashboards combined with analytical and
collaboration tools will help monitor and influence the supply
chain to enable real time optimization.
The Supply Chain Visibility Dashboard
A supply chain dashboard will typically involve 4
components:
1. Configurable metrics - Specific KPI's which cover both
process (TAT, accuracy, productivity) and business
metrics (inventory turns, perfect orders, DSO) which
can be customized by supply chain managers to
capture their business imperatives
2. Supply Chain Exception Management (SCEM) - by Alerts
generated from pre-set values to above metrics. These
alerts will be routed through role based user hierarchy
3. Analytical and Collaborative tools - which enable drill
down root cause analysis and collaborative problem
solving of above exceptions
4. Track resolution - through reporting of status and
impact of corrective actions identified above
An important feature of the dashboard is its ability to link
varying systems together and enable the client to view the
consolidated supply chain and collaborate with the BPO
vendor of back office supply chain processes to influence
and optimize it in real time.
Benefits of a dashboard in Supply Chain BPOservices
A major risk that organizations face in outsourcing back office
processes of a supply chain is that of distance - distance
from supply chain partners, distance due to time zones and
distance due to varying systems that prevent visibility and
inhibit real time control and optimization of the supply chain.
By integrating supply chain visibility dashboards into the
outsourced environment, this risk of distance can be
effectively addressed and overcome. Some of the benefits
of this integration of dashboard technology and BPO services
in the supply chain area are:
• The death of distance in the supply chain - thus
enabling real time monitoring and control of back
office supply chain processes
• Collaborate in real time with the back office BPO team
to optimize the supply chain by cross/ upselling,
expedite/ substitute, prevent stock outs and increase
conversion ratios
• Provide a productivity tool for the client to manage
offshore operations by moving the needle from
process metrics to business metrics1
Thus by enabling supply chain visibility through SCV
dashboards in an outsourced environment will de-risk
offshore supply chain operations and ensure real time
operational control and optimization. This would of course
work best when client and service providers collaborate to
ensure that all touch points in the process are optimized
through the application of the technology.
1 Vijai Kumar Balachandra & Radhakrishnan Prashant, "Moving theneedle in Order Management outsourcing: From Process metrics toBusiness metrics", BPO Journal II, 2008
15
A global provider of imaging technology products and services wanted visibility into
its service and product performance which include products like digital cameras,
printers, imaging accessories and equipment. It also needed the ability to track
consumer concerns, calls, and problems with products, returns and replacements.
The company partnered with a service provider to create a plug and play supply chain
visibility and collaboration workbench based on Microsoft BI stack which consolidated
information fragmented across the company's multi-tier, multi-system global supply
chain. This customized workbench/dashboard provided the client with a platform to
monitor and control its supply chain in real time by detecting signs of possible failures
and resolving them proactively. This visibility into product defects and the agility in
resolving them has enhanced call center/back office performance and reduced repair
and return rates, driving up overall customer satisfaction.Case
Study
Conclusion
The supply chain provides immense scope to enhance and
enable the collaboration and optimization of processes
between the client and his BPO partner through the
implementation of next generation tools and technologies.
Supply Chain dashboards which bridge the distance between
the front and back office components of the supply chain
and bring about visibility into the client's global value chain
in particular will help BPO vendors to go beyond process
improvements and truly impact the business performance
of the client's operations.
References
1. Vijai Kumar Balachandra & Radhakrishnan Prashant, "Movingthe needle in Order Management outsourcing: From Processmetrics to Business metrics", BPO Journal II, 2008
2. Arora et al, "Service Performance Workbench - a strategicdifferentiator", Infosys Whitepaper, Jan 2009
3. Barret Jane, "Collaborative Inventory Practices yield MarketAdvantage" AMR Research, 2008
4. Hostmann & Richardson, "Succeed with businessintelligence by avoiding 9 fatal flaws", Gartner Research,Sept 2008
5. Kard Khalid, "Real World Example: Eastman Kodak SecurityMetrics Dashboard" Forrester Research, Apr 2009
6. Orlow et al, "Making dashboards actionable" ForresterResearch, Dec 2003
ABOUT THE AUTHOR
Shyam.R.Rao is a Solution Anchor in the Order Management practice at Infosys BPO. He has 9 years of
experience in the supply chain area in the Hi-tech and Discrete manufacturing space. He is an alumnus
of the London School of Economics
16
Companies that leverage technology to automate their Accounts Payable (AP)
function can achieve sustainable, long-term benefits by aligning cost optimization
objectives to their long-term vision and strategy.
Designing an Optimal Technology Landscape -For Accounts Payable Transformation
Shubha Subramanian, Ved Vyas, Rajagopal NVS
17
The current economic condition has caused companies to
experience severe revenue and cost pressure and an
uncertain future. As a result companies are banking on
technology to deliver benefits beyond just "cost savings"
and help create transformational benefits that
can help them not just in turbulent times but in good times
as well.
One area which is becoming an important agenda item for
companies all over the world is the automation of AP
function, because even today an overwhelming majority of
invoices in companies are paper based. With billions of
dollars worth of invoices getting processed every month,
inefficiencies in invoice processing and delayed payments
to suppliers can lead to increased costs and end user
dissatisfaction. Given that manual processing of supplier
invoices costs anywhere between US $10 to US $20 per
invoice, and keying in information from paper invoices is the
most time-consuming and the least value added task in AP
departments, companies are increasingly looking at
technology to drive down costs and improve efficiencies in
their AP processes. Companies that have successfully
automated their AP function have managed to bring down
costs to less than $5 per invoice resulting in transformational
cost benefits and significant bottom-line improvement. Other
benefits include faster ROI, minimized impact of process
failures and delays, cash management and working capital
optimization, improved decision making, enhanced controls
and supplier satisfaction.
Traditional approaches to technology involve understanding
of immediate concern areas and gaps, and investing in
software solutions to address those short-term concerns.
The sections below, however, advocate an approach where
the "gap analysis" is done against a "Technology Maturity
Roadmap" and the long-term strategic vision of the
company.
We believe that companies that embark on transformation
through technology enablement should do a two way
assessment on before designing the optimal technology
landscape for its AP function. The assessments involve a
detailed review of the following:
• existing processes and technology the company
currently has;
• profiling and segmentation of their supplier base and
evaluation of suppliers' capabilities and fitment into
the overall technology solution. BPO service providers
play a major role in helping companies tailor
technology solutions to meet their needs and
requirements, and more importantly, in translating
their long-term vision into action. The sections below
describe the approach to be followed for the initial
assessment phase.
Technology Maturity Framework and GapAnalysis
Technology maturity refers to a company's ability to leverage
technology to automate its manual, non-value added tasks
and provide real-time information to enhance decision
making capabilities. The technology maturity framework is
intended to help companies assess their current level of
maturity vis-à-vis an evolution roadmap. There are 4 levels
defined in the maturity model.
Level 1
is primarily targeted at controlling paper workflowof the company.
Level 2
involves integrating the imaging and workflowsolution with ERP and sets the foundation forsimplified invoice processing.
Level 3
involving integration between invoice processingsoftware and the ERP system also includes anelectronic workflow. This integration can empowerdecision making process by providing real-timevisibility of invoice status, informative dashboards,automated escalations and alerts.
Level 4
is primarily applicable to large organizations thatoperate in multiple geographies, languages andhave large volumes of data. This level requires heavyup-front investment in supplier data managementsolutions, e-invoicing, Supplier portal, paymentfactory.
18
Low complexity High complexityLe
vel
0 Leve
l
1 Leve
l
2 Leve
l
3 Leve
l
4
• Manual Processing
• No workflow
• Implement scanning system
• Implement workflow
• Implement scanning system (OCR integrated)
• Implement ERP integrated work flow
• Implement ERP integrated PO system
• Implement invoice tracking system
• Implement approval via ERP integrated system
• Implement vendor query status tracking system
• Automatic uploads of vendor master data requests into ERP system
• ERS • EDI / e-invoicing• Vendor portal• Introduce
payment factory
Manual
No Paper Flow
Automated DataFlow
Real timeenvironment
Automate throughe-Invoicing
The tools and technology solutions currently used and their
capabilities thereof will need to be mapped against the
maturity framework. This will help a company in identifying
its current state of technology maturity and benchmark its
capabilities against best-in-class (Level 4). This
benchmarking exercise can help companies identify
investments and capabilities required to transform its AP
function.
As companies aspire to move up the maturity model, there
would be varying levels of investments required at each level.
Any investment in technology should be planned in such a
way that it acts as a business efficiency enabler and provides
tangible business benefits. The high technology investment
required to automate some of the manual, non-value added
activities in the AP process is one of the major reasons for
outsourcing the AP function to BPO service providers.
Supplier Profiling and Segmentation
Another important evaluation involves a detailed study of
the supplier database to understand the profiles of the
suppliers the company deals with and their historical
behaviour pattern. Companies with insights and
understanding about their suppliers are better placed to
collaborate with suppliers to innovate their products and
service offerings. Technology acts as a key enabler that
facilitates this collaboration with the extended enterprises.
Data analysis can help in identifying distinct supplier
segments and understanding the characteristics and
constraints that define each of the segments. The questions
to be considered while identifying the supplier segments
include:
• Are the suppliers regular or one-time suppliers?
• Do the suppliers supply goods or services?
• Are the suppliers high-volume or low volume
suppliers?
• Are the transactions with the suppliers of high- value
or low value?
• Are the purchases from the suppliers against a PO or
are they non-PO supplies?
• Are the transactions with the suppliers simple or
complex in nature (attributes to be considered include
language capabilities, invoice formats, geographies,
tax related issues etc)?
More often than not, companies will have to deal with
suppliers with varying degrees of technology maturity. The
supplier profiling and segmentation exercise can provide
pointers about the type of technology investment required
to optimize ROI. The company should consider investing in
Table 1: AP Technology Maturity Model
19
ERS and EDI / e-Invoicing for high-value and high-volume
suppliers. Though the company has to make upfront
investment in setting up the technology platform and process
for reconciliation, long-term benefits (by way of improved
working capital predictability, improved on time payment
capabilities and significant reduction in processing costs)
can be quite significant. For the suppliers, the benefits would
include prompt payment, better cash forecasting, lower bad
debts etc. On the other hand, for low-value, high-volume
suppliers, P-card implementation might be the optimal
solution. Similarly for suppliers who are in the mid-segment,
a company may decide to implement image scanning
integrated with workflow as it requires no investment from
suppliers but can yield significant benefits to the company.
The diagram below is an illustrative list of technology
solutions that companies could consider for their supplier
segments:
Therefore a thorough understanding of the supplier segments
and their characteristics can go a long way in engaging with
the suppliers and designing the most appropriate technology
interventions for each of the supplier segments that can
provide win-win situations for suppliers and companies.
Designing an Optimal Technology Landscape
Evolution of technology is not a linear process and a single
approach to technology should not be uniformly applied to
companies. Rather a "One Size Fits All" approach to
automation needs to be replaced by a strategy that is
customized to fit a company's overall strategic vision, needs
and expectations from technology solutions.
The optimal technology landscape should be finalized after
taking into consideration the following factors:- current
technology capabilities, relationship maturity of the supplier
segments, tangible and intangible benefits expected from
automation and strategic long-term vision of the company.
Identification of the desired state in maturity model will help
in identifying gaps, prioritizing resources, focus areas and
will, more importantly, aid in chalking out an action plan to
get to the desired state. It should also enable the company
to cope with the immediate constraints and challenges while
making it agile enough to adapt to the changes that the
business might undergo in future.
Companies do not have to go through the various levels of
technology maturity in sequence and can adopt a multi-pronged
approach to realize optimal benefits from the automation
Table 2: Technology Solutions for Supplier Segments
Supplier Characteristics BenefitsSolution
ERS
• Suppliers with established mutual trust relationship
• # of invoices and invoice value are large
• Manual goods receipts against POs
• Supplier invoicing and invoice entry process eliminated• No delays in payment, pay only for what you receive.• Pre-determined invoice cycle time resulting in improved working
capital predictability• Processing cost per invoice will be in the range of $ 0.80 to $ 2.50
EDI or ElectronicInvoicing
• Non-ERS suppliers• # of invoices and invoice value are
large• Manual goods receipts against POs
• No manual intervention required to process invoices • Improved invoice cycle time and visibility through invoice life
cycle • Reduced Processing cost per invoice• Improved ability to avail early payment discount
P-Card / Self ServiceVendor Portal
• Low value purchases • Prepayment
• Minimize the manual efforts through p-Card, Self Service Vendor portal, PO flip etc
• Simplified process
Paper-Based Invoices• # of invoices and invoice value is
medium or Low• Paper invoices for suppliers with
no e-invoice capability
• Centralized sorting and OCR scanning resulting in improved process efficiency
• Workflow enabled with integration with ERP to reduce cycle time and improved visibility through invoice life cycle
• Approval workflow for non-PO to ensure compliance and visibility
20
process. There are tangible benefits to be reaped in each of the
levels of the maturity model and based on priorities, pain areas
and resource constraints, companies can, with the help of BPO
providers, move up the evolution chart either in a fairly short
time-frame or over a longer period of time. For example,
companies that are at Level 0 (of the technology maturity model)
can leverage outsourcing and technology expertise of their BPO
partners to move to Level 3 in the short-run. However not all of
its suppliers would be ready or willing to invest in technology
for several reasons including ROI, strategic importance of the
supplier, value of business transacted between the company
and the suppliers etc. It is, therefore, imperative to adapt to
other alternatives to accommodate suppliers unwilling to invest
and overhaul their existing processes.
In the process of automating functions, it is important to
align process improvements with technology solutions and
create a synergistic value to companies. Only then can the
benefits be truly enduring. BPO providers have the requisite
capabilities to combine expertise in process outsourcing and
technology in a synergistic way within the AP framework to
provide integrated value benefits to companies.
Proven technology and optimization expertise of BPO service
providers can enable companies to scale up the automation
of their AP functions at reduced cost and in a relatively short
period of time. BPO providers will work with companies not
just in automating and harmonizing their internal AP
processes but also in analyzing and working with the various
suppliers to design optimal technology solutions for each of
the supplier segments depending on their relationship
maturity levels (Refer Table 2). The benefits that BPO
companies provide are mentioned below:
Working CapitalEfficiency
• Reports and analysis
• Predictability of working capital requirements• Improved Discount Capture %• High Visibility on Payables outstanding• Unlock cash flows• Prevent late payments (& penalties)
Operational Efficiency
• Workflow tools• ERP Integration• Automation - OCR• Reports and analysis
• Improved Paid on Time (PoT) capability• Productivity• Escalation and tracking• Well informed policy decisions
ContinuousImprovements
• Drive Standardization and harmonization
• Improved Accuracy• Innovation• Best Practices Sharing
• Consolidation - One process for all geography/entity
• Leveraging the best talent across industries• Year on year reduction in TCO• Eliminate waste and non-value added activities
End User Satisfaction• Supplier Portal (Self Help tool for
suppliers)
• Minimal time spent on answering Invoice status and payment queries
• High visibility of supplier queries and higher supplier satisfaction on account of accurate and predictable payments
Controls & Compliance • Audit Trail• Duplicate Processing control
• Automated Approval flow• Electronic Audit Trails• Revenue leak avoidance• Better enforcement of business and SOx controls
Cost Optimization
• Outsourcing• Work Flow Tools• Special Handling of discount
eligible invoices• Help in converting Paper based
invoicing Supplier to electronic based (ERS, EDI or E-Invoicing)
• ~30% Cost savings, Labor arbitrage & shift in focusing controls, Macro Management
• Productivity and Cost Reduction• From Cost Center to Self serving model.• Reduction of Manual invoice processing and cost
of the same
Offerings of theBPO Service Provider Benefits to Clients
21
Conclusion
Companies all over the world suffer from an over-reliance on manual processes. The inefficiencies of the manual processes are
often overlooked during times of high growth but become prime candidates of focus during times of recession. New tools,
technology and platform solutions have evolved in the last few years that can automate the manual, non-value added tasks
inherent to AP function and provide transformational benefits to companies.
ABOUT THE AUTHORS
Shubha Subramanian - heads the Finance Center of Excellence and handles domain competency and
knowledge management initiatives of F&A practice at Infosys BPO. She has worked in the core finance
and accounting functions for several companies and also has experience working as a trainer. Shubha is
a Chartered and Cost Accountant and also holds MS and MBA degrees in Corporate Finance from University
of Wisconsin, U.S.A.
Ved Vyas is responsible for driving the products & alliance strategy and commercialization in the F&A
practice at Infosys BPO. Ved brings around 14 years of experience in program management, customer
relationship management, outsourcing transition and business development. Ved has led many cross-
functional and multi-location teams to ensure delivery of ERP implementations and custom development.
He has also worked as a Manager in Steel Authority of India (SAIL) for a couple of years where he was
involved in production planning & control. He is a B.Tech graduate from IIT-Kanpur and an MBA from
IIM Ahmadabad.
Rajagopal NVS is the P2P Product Manager for F&A Products & Alliances team at Infosys BPO. He has
rich experience in P2P domain - managing operations / designing products & developing reconciliation
solutions. Raj has worked with global corporations - across industries like manufacturing, dot com, Capital
and healthcare. He is a commerce graduate.
22
Although a number of procurement technologies have entered mainstream adoption,
there is significant continued innovation in procurement, as evidenced by new
technologies, and ongoing refinements in current offerings and product offering
restructuring. Several procurement technologies are becoming mainstream
solutions, including strategic sourcing applications, spending analysis and
e-procurement. These solutions are appealing to a wide audience because of their
proven track record to enable and/or deliver significant cost reduction.
* Hype Cycle for Procurement Applications, 2009; by Deborah R Wilson, Andrew White, et al.;28 July 2009, Gartner, Inc.
Special Tools for Special Purposes - Addressing theSourcing & Procurement Challenges
Bipin Wadhwa with Ravi Panchanadan
23
Enterprise resource planning systems have been, for some
time, the key automation enablers of procurement function.
They have, perhaps in many cases, created discipline in
transactional process execution and resultant data
management. However, the Chief Procurement Officer's (CPO)
challenge to reduce procurement cost can be further
addressed at various stages of sourcing and procurement
cycle, through use of specific special purpose automated
tools (which may be decision support, process accelerators
or collaboration tools).
Special purpose tools are generally used for a niche set of
activities such as spend reporting, spend analysis,
negotiation management, (master) data cleansing, cost policy
compliance and control. No doubt organizations can evaluate,
implement and deploy such solutions entirely through internal
efforts, but now with evolution of service offerings by
Business Process Outsourcing organizations, using their
services can create additional advantages - of service
knowledge, expertise and cost.
The context - CPO Challenges
The economic recession has brought forth the need to reduce
and control costs. The Chief Procurement Officer's role has
gained importance given the CPOs teams' influence over
managing spends. While proven technologies that enable
transactional activities exist, such platforms may not generally
always support every facet of sourcing and procurement
activities that can help reduce or manage spends better.
For example, from a CPO's perspective, the reduction of cost
& better cash flow can be achieved by sourcing better. For
this, summarized & detailed view of all spends must be
available through a decision support CPO DASHBOARD,
preferably at the finger tips of the CPO and his team. It should
enable the management, at various levels, to understand
the progress over key procurement performance metrics,
which area or category could potentially need deeper
investigation for correction, or a relook at strategy.
But then, this is easier said than done, for many a time, the
reporting flexibility in applications used may be limited - after
all each one has his own approach to review the information.
Special purpose tools have been able, to a large extent,
address these by using feeds from different application
instances, and providing the dashboard, which can furnish
the desired summary, and dig deeper to identify possible
area of variance. Similarly, organizations can take advantage
of sourcing and procurement point solutions, which provide
niche functionalities to address different challenges.
The fundamental difference - ERP and SpecialPurpose tools
Growth is an imperative strategy of all organizations. As
organizations grow in revenue and size - people, capacity,
volume, sites, products and services, the underlying operations
need to keep pace. Enterprise resource planning platforms
enabled implementation of collaboration between various
parts of the organization, through set of well defined and
standard processes. In doing so, they enabled a resultant
repository of data, or database, consisting of transactionalCPO DASHBOARDUsing MS SQL Servers, SharePoint &Performance point technology, a CPO
Dashboard can provide an individual userdefined dashboard layout, with instant alerts
and mail messaging collaboration
SPENDING SCORECARD
% of Savings YOY
% Spend under Management
Active Suppliers per Billion & Spend
% Spend from High Cost Countries
7.45%
92.55%
204.65#
53.35%
Value Goal &Status Trend
11.22%
89.05%
45.12#
52.00%
Examples of processes that were primaryfocus of enterprise resource planning are
raising & approval of purchase requisitions,raising of approved purchase orders based on
purchase requisitions, recording of goodsreceipt, recording of invoice and matching
them with purchase orders and goods receipts,recording of payments to vendors andreporting of payables. For a very large
organization, the sheer volume of thesetransactions can be mind-boggling, and well
served by such applications systems
24
data generated through execution of processes. Many of these,
due to the nature of standardized and well defined processes,
permitted themselves to be outsourced to captive or third party
shared services organizations.
Special purpose tools, on the other hand, address a specific
activity or set of activities that may help in providing analytics
to supporting decisions, or accelerators to executing
processes, or collaborate with suppliers.
found to fall short. They generally have ability to interface
with, or use data from, varied end to end technology solutions.
Uses, deployment challenges of special purposetools in sourcing & procurement functions
However, this may be easier said than done, for either data
required are available in different and variant systems
The spend analysis solution tool is enabled by on line analytical processing
or OLAP technology, which allow fast analysis of shared multi-dimensionalinformation. Unlike traditional database management systems, which storedata in many two dimensional or flat tables, OLAP technology allows datato be in a three dimensional table. It supports multiple hierarchies whichallow data to be categorized and classified & viewed at various levels(dimensions, nesting and categories).
It permits easy data manipulation - slicing (extracting values relating to asingle value of a dimension), dicing (extracting a sub cube of original), rotating(changing the dimension orientation or swapping a row/column with a off-spreadsheet dimension).
Data from different systems, with different file & data formats, can be ported
(loaded) into the solution tool. One can define a standard format and foreach source data type, rules to load and convert into standard need to bedefined and re-used.
Similarly, for creating analytical reports, rules based reporting templates canbe created. Any ad-hoc reporting template, can also be created using certaincommands.
An important aspect of the point solution tool is that all hierarchies andrules set can be modified with limited efforts.
WHATCREATES
THEADVANTAGE?Illustrated withexample of how
typical spendanalysis solution
works.
For example, with the set of data available through the
repository generated from enterprise resource planning
systems the procurement leaders would need an analysis of
their spend for a period. Special purpose tools can help
facilitate the tasks to collate, organize, classify, analyze &
summarize spends for each category or commodity, by various
dimensions. The base data will be obtained from the enterprise
resource planning databases, processes & analyzed in the
special tools. Generally, you may find the special purpose tools
a better option to use, because of their concentrated focus,
the tools have built in niche functionalities to address varied
issues involved (tactical or transactional). They are often
resorted to in areas where general end to end solutions are
(enterprise resource planning or legacy applications), or data
may not be adequate, or capability to conduct the analysis
may be limited. Then again, the humungous information may
first require DATA CLEANSING, issues arising from the
DATA CLEANSINGSpecial data integration tools can facilitatereview of the data from various systems,analyze issues, and clean data based on
defined data quality rules
25
existing junk or duplicate data or availability of data in
different formats. So, there will be efforts required to carry
out data rationalization, data enrichment and organizing to
a standard data schema - perhaps both at transactional and
/ or master data level. Special purpose tools can serve as
process accelerators here.
The cleaned data can be analyzed by various dimensions,
using the SPEND ANALYSIS tools, a combination of process
accelerators and decision support. The resultant output
enables visibility of spend patterns. One may even need to
enrich the existing spend data set by adding external values
such as data or supplier codes, from external sources, to
permit better classification and analysis. For sourcing, the
spend view can provide an enhanced understanding of the
spend requirement and its patterns. The enhanced spend
data reports, amongst others, can thus be used for reviewing
or developing and deciding on spend strategies.
As we go downstream in the process, there are other e-
SOURCING tools that well serve collaboration with suppliers,
which we find useful. During the sourcing strategy execution,
one may need to invite request for proposals (RFPs) or
information or quotations (RFIs/RFQs), to allow various
suppliers to bid and compete. This may be a time consuming
process, if we leave it as manual paper based or simply email
based enabled. Collaborative tools for such request can be
used. These tools permit online contact, submission of
requirements and terms, with response from suppliers and
creating comparatives. These special tools or applications
can create reduced cycle times and processing efficiencies.
Moreover, sourcing tools have also been found to be useful
to negotiate, with short listed suppliers invited for on-line
reverse auctions. Such on-line auction tool can be used well,
with variance of what data we want the suppliers to know.
These indeed have led to cost savings, by the sheer visibility
of, and increased competitiveness amongst suppliers. And
it creates transparency in purchasing and supply process!
But, does all procurement take place as per contract terms
and conditions? Is there any chance of cost leakages due to
say, incorrect prices being levied or in appropriate
implementation of the terms? Such conditions could exist in
many organizations, and many times trying to keep track of
all of these can be quite challenging. Two such instances
are keeping track of use of software licenses (SOFTWARE
ASSEST MANAGER) and managing telecom spends
(TELECOM EXPENSE MANAGER). Suffice to say, each have
own set of challenges. There are tools to accelerate the
process of compliance and control for such special cases.
It usually is in the interest of procurement to ensure that the
organization pays only for the software licenses actually
used, and to identify license reallocation opportunities. One
needs to evaluate compliance of software license terms.
But again, the use of licenses may be decentralized, with
many points of use. Tools can be deployed on servers, to
gather the license usage data from various systems, which
can then be analyzed for deployment patterns, and identify
areas for rationalization and changes. Surely, preventing over
utilization, in many cases, means preventing penalties.
Under-utilized licenses can perhaps be discontinued. But
deploying this tool needs some specialist understanding and
then, there is manual effort in conducting the compliance
review once the inventory is generated.
In the second case, telecom expense is generally a large chunk
of the spend portfolio given the ever increasing dependence
of electronic means of communication. Each region may have
its own set of service carriers, who are contracted with, and
need to be managed. The new connection requests, old attires,
requests, call reports and invoices all of them arguably deserve
scrutiny, as the sum of errors may prove to be a large hole in
the pocket. The solution, as do others, needs combined set of
SPEND ANALYSISBased on OLAP technology, these tools canport spend data sets from different systems,permit classification at different levels ofdata, defined analytical reporting templates
and generate multi-dimensional spend reports.Standard and ad-hoc reports can be thusgenerated in a speedy manner, with spend
patterns made visible with high and detailedlevel views available
SOFTWARE ASSET MANAGERSuch tools can generally easily be ported on
to organizations' servers, under secureconditions, and can inventories the usage ofspecified high costing software licenses. The
software license can be monitored
26
tool and services, that can establish a cost effective and
scalable network, improve transactional service efficiency and
reduce cost of operation.
These are some examples of special purpose tools, which
can add value to the sourcing and procurement processes.
In some cases, ERP vendors may include them as part of
their offerings, or organizations may need to source it from
other vendors. Having said that, in certain cases, one may
develop it! But all in all, such special purpose tools have
been found useful for decision support or as accelerators to
the processes or as collaborative tools.
Advantages of engaging a business processoutsourcing partner
Traditions change. And so has what a good business process
outsourcing partner can do for you.
There may be little doubt regarding the advantages that such
tools offer. But there can be implementation challenges and
extensive manual efforts. Given the challenges related to
systems and data, there are enormous manual activities
involved in this processes, generally because large
companies require handling huge volumes.
Business process outsourcing / off shoring units are in a
position to specialize in providing the comprehensive
solutions to complex spend data harnessing and analyzing
issues. It can combine service with special purpose tools, to
provide the overall solution, based on the client's strategy.
Firms can take advantage of these since:
• Clients can gain not just on labor arbitrage, but also
from the expertise gained through varied experiences.
And from comparative speed of implementation when
handled by such experts
• With extensive experience, one tends to have a well
developed methodology to handle such complex issues
• The methodology, coupled with the solution tool,
provides a unique opportunity for clients to outsource
such strategy and procurement support and focus on
sourcing strategies for high end products and services
• Furthermore, any existing tie ups by the BPO for the
solution tool can reduce the effort on tool selection
and training process
• Creating the initial set ups, indexing, mappings, templates and rules fordata porting or analytical models etc., in various tools (CPO Dashboard,Data Cleansing, Spend Analytics, Software Asset Management)
• Data profiling, rationalization, enhancement, enrichment, andmaintenance (CPO Dashboard, Data Cleansing, Spend Analytics)
• Capturing data not available in the systems, from various manual & non-manual sources (CPO Dashboard, Data Cleansing, Spend Analytics,eSourcing, Software Asset Management)
• Order provisioning, inventory management, invoice reconciliation &dispute management, usage management (Telecom ExpenseManagement)
• Setting up requests for information/quotations/proposals, bids andreverse auctions based on defined criteria ( eSourcing)
• Conducting compliance reviews and audits, based on defined criteria(Software Asset Management, Telecom Expense Management)
• Generation of related analysis and reports (perhaps all above)
In deploymentof solutionswith special
purpose tools, abusiness processoutsourcing unit
can provideservices, in the
areas of(examples of
solutionsdiscussed above,
where thesemay be relevant
are given inbrackets):
TELECOM EXPENSE MANAGEMENTSuch tool can automate telecom related
inventory, order tracking, call detail reporting,auditing. The tools can link to various known
applications systems.
27
Conclusion
Traditional data BPO services were enabled by end to end platforms, owned and managed by clients and used by the outsourcer.The current trend is moving to BPOs investing in development of specific point solutions, which combine service and niche orspecial purpose tools. It creates advantages for clients in terms of improvements in cost and effort investment -comparativelyreduced implementation time, benefits arising from not just labor arbitrage, but from ready expertise and centralized focusservices, and possible available tie ups for such tools.
ABOUT THE AUTHORS
Ravi Panchanadan - Heads the Global Sourcing & Procurement Practice at Infosys BPO. Ravi has over
18 years of rich experience in Global Sourcing with Intel Corp and in overall Supply Chain Mgmt with
Unilever. He has been instrumental in setting up International Purchasing Office for Intel in India. Ravi
has a Post Graduate Diploma in Management from Xavier's Institute of Management.
Bipin Wadhwa is part of Global Sourcing & Procurement Outsourcing practice at Infosys BPO. He has 14
years of diversified experience in the area of Operational Process Consulting & Risk. Bipin has been
instrumental in setting up Center of Excellence for Sourcing and Procurement at Infosys BPO. He has
conducted process consulting & discovery assignments involving solutions design and feasibility
assessments, including centralization of processes in a Shared Service Center Model. He is a Chartered
Accountant, Cost Accountant, and certified MBA from Indian Institute of Management, Bangalore with
specialization in Supply Chain Management.
28
"Now, here, you see, it takes all the running you can do, to keep in the same place.
If you want to get somewhere else, you must run at least twice as fast as that!"
Red Queen to Alice, 'Through the Looking Glass' by 'Lewis Carroll'
Winning the Red Queen’s Race – Redoing the math ofvalue creation for Communication Service Providers
Gopal Devanahalli, Harry Jose, Vinay Peshwa
29
The Red Queen might as well as have been talking about
the Communications Service Provider (CSP) marketplace
of today. Entry of nontraditional entities like Cable and
Utility companies and resultant competition, dwindling of
customer base and obsolescence of business models (e.g.
wire line voice) are making CSPs strive twice as hard to
maintain their ARPUs (average revenue per user), let alone
grow it. Getting ahead in this 'Red Queen's race is possible
only if CSPs are able continuously exceed the expectations
of their customers through the launch of new products and
services- even if it comes at the cost of Capex intensive
network/technology upgrades such as 3G,4G,FTTX rollouts,
femtocells etc. CSPs have responded to these changed
realities in the market place by chalking out detailed
product portfolio expansion plans in both wireline and
wireless space and have committed significant investments
running in to billions of dollars.
Challenges in keeping Customers 'satisfied'
While launching new products and services will enable
CSPs to meet customer expectations, ensuring that they
remain satisfied is possible only if operational process
metrics (fulfillment, assurance and billing metrics) are
aligned to the customer experience drivers (ease of
installation, quick and painless complaint resolution, single
bill for multiple services etc.). This is an area where most
CSPs are facing challenges. The fact that most CSPs have
retained their legacy systems and process frameworks for
the fulfillment, assurance and billing of newer products
and services have not helped their cause, either.
Operational inefficiencies are resulting in revenue and cost
leakages as well. Consequently most CSPs today are
grappling with a number of challenges in their existing
operations framework. For eg
Product failures - incomplete analysis of supply chain at
the time of product launch have caused product
failures due to supplier lead times being longer than
committed installation SLAs.
Customer dissatisfaction/ attrition due to installation
delays - improper logistics management have resulted
in issues like delayed installation due to CPE
(Customer Premise Equipment) being unavailable at
the time of installation engineer visit/ loss of CPE etc.
Revenue Loss -Though revenue assurance systems have
been set up for most of the existing portfolio of products,
CSPs are still struggling to addressing leakages in
revenue for their newer products such as IPTV.
If done right Business Process Outsourcing can enable CSPs
overcome these operational challenges.
Unlocking the value gained from BusinessProcess Outsourcing - the concept of ValueMultipliers
The initial business process outsourcing value proposition
was one of cost arbitrage. Over time BPO firms have built
upon this value proposition and enhanced the value they
provide to CSPs by undertaking process improvements
through reengineering and six sigma techniques. However,
today a combination of two contrasting factors is compelling
CSP firms to reconsider their engagement models and the
value they derive from their outsourcing partnerships.
• changed market conditions and challenges faced on
the operational front by CSPs - cost reduction
perspective
• the competency demonstrated by pioneering BPO
firms in moving beyond the traditional SG& A focus
and developing solutions addressing the Cost of
Service & Sales portion and Operating Revenues in
P&L - value creation perspective
The question CSPs are now posing to their BPO partners is
whether, by leveraging on their CSP operations expertise
gained over the last few years, they can move beyond
process level improvements and create value at an end-to-
end value chain level.
The implication is that the BPO firm needs to be able to
deliver not only on the CSP operations metrics but also on
the CSP business metrics as well. This calls for a deep
business driver level understanding of the CSP's line of
business, understanding of how the operational metrics
affects these business drivers as well the expertise to
positively impact the identified business drivers by
eliminating systemic inefficiencies through utilization of a
core organizational competency such as the ability to do
customized technology interventions. A BPO will then be
able to create a value multiplier for the CSP rather than
merely provide a process level savings.
According to us a Value Multiplier is a combination of two
competencies
30
• a domain competency comprising of deep knowledge
of client processes and CSP industry business drivers
and
• an organizational competency enabling the BPO firm
to utilize the industry domain level knowledge to
impact the end-to-end value chain and business
metrics of the client at least one level beyond whatat least one level beyond whatat least one level beyond whatat least one level beyond whatat least one level beyond what
the CSP would have been able to do on its ownthe CSP would have been able to do on its ownthe CSP would have been able to do on its ownthe CSP would have been able to do on its ownthe CSP would have been able to do on its own
By this definition, six sigma type of process improvements
falls short of being a value multiplier since it does not impact
the business metrics of the CSP directly.
Technology as a Value Multiplier
Most of the technology interventions available in the market
are aimed at process level improvements - automation of
work, tools, applets, macros that simplify the process etc -
which if done right, impact the process SLAs positively. While
the use of technology in such a manner does reduce system
inefficiencies they still fall short of being a value multiplier
since the technology merely enhances agent productivity -
which is still a cost arbitrage attribute and not a true value
multiplier. To create a value multiplier, the BPO firm will
have to impact the end-to-end process value chain and not
just an individual sub process.
Obviously the prerequisites of domain competency, BPO
capability and technology capability is a formidable ask and
few BPO firms have strived to develop capabilities in this
regard. Innovations in this space have the potential to create
exponential value to CSPs across the globe.
Presented below are a couple of illustrative examples in
this area.
Circuit Inventory Management
Global connectivity solutions providers depend on regional
network providers for 'last mile' access circuits to connect
global customer locations with their nearest Points of
Presence (PoPs). The access costs amounts to a very
significant portion of the total connectivity cost. The
geographically spread out nature of the locations of the
access circuits as well as the intricacies of the invoice
formats and conventions followed by different countries /
providers makes it very difficult to keep track of the access
circuit 'inventory' often leading to cost inefficiencies and
leakages. Inorganic expansion, varying regulatory
requirements, diverse offerings and varied partners have
resulted in telecom companies deploying disparate systems
for ordering, provisioning and billing, making maintenance
of the circuit inventory database accuracy, even more
complex. The need of the hour is to have an end-to-end
solution to validate the data, correct inconsistencies in
existing connections, and plug cost and revenue leakages
across geographies and customers. Unfortunately cost
leakages like unutilized circuits, multiple payments for the
same circuits and cost inefficiencies like failure to choose
the cheapest access circuit, access hubbing and grooming
etc. can only be spotted by trained professionals well familiar
with country specific telecom conventions and terminologies.
The Value Multiplier approach
The technology value multiplier solution in this scenario
consists of an IT eco system (comprising of a data integration
engine for picking up relevant data points from the client
OSS/BBS stack, a data mart, an exceptions rules engine and
a data reconciliation engine) and a team of experienced
resources for handling manual intervention. The multiplier
effect comes from the fact that the solution addresses access
circuit inventory inaccuracy which is a key pain point for
global connectivity solutions providers world wide (access
circuit accounts to up to 30% of the total network costs for
connectivity solutions providers) and positively impacts the
end-to-end value chain rather than individual sub processes.
Increasing ARPU through 'Voice of Customer'Analytics
Every customer interaction is a rich source of information
on customer experience and behavior. Leveraging this 'Voice
of Customer' information, through the use of analytics, can
help positively impact ARPU. Unfortunately, the unstructured
nature of this information makes it very difficult to mine
using ordinary analytical techniques, more over the
distributed nature of the data makes it difficult to collect
through ordinary techniques.
The Value Multiplier approach
Analytic tools which can develop semantic insights from
unstructured data by leveraging natural language processing
capabilities are needed to provide real time intelligent
analytics about customer experience and usage. A natural
language processing tool can be used to gather information
about the customer from various sources such as operational
data, internet customer forums, blog sites etc, and a rich pool
31
Business Process Outsourcing firms leveraging on their understanding of complex CSP operational and
business drivers and technology capabilities can multiply the outsourcing value gain for CSPs with out the
need for substantial Capex investments. Such an approach enables CSPs to optimize their operational
costs and focus their Capex investments on new product/service development and technology changes/
network upgrades.
As the pace of global business continues to accelerate, the ability to align with a partner who has the
deep -rooted understanding of industry business metrics and the capability to positively impact them will
be a key to success. Only this will ensure that the CSP will win the Red Queen's race. CSPs need to include
this capability as an important item on their checklist when they are evaluating outsourcing partners.
of information can be created which can be mined to get
customer insights by a team of experienced BPO professionals.
The insights gained can be used in two ways by the
operations team:
• Target a customer segment, eg. fine tune market
offerings for a customer segment based on real time
customer feedback gained through this type of
analytics tool
• Target individual customer, eg. Enhance Upsell/ cross
sell opportunities during interaction of the customer
with a customer care representative, create Just-in
time marketing campaigns, etc.
Here the value multiplier effect is created by creating a
technology intervention to pick up hitherto unidentifiable
customer data points and interpreting them to develop critical
insights which positively impact a key business driver - the
ability to upsell /cross sell, creating a level of value which
would not have been possible to create by the current way
of operations within a CSP.
32
ABOUT THE AUTHORS
Gopal Devanahalli - Heads the Communication Media and Entertainment (CME) unit at Infosys BPO. He
leads the M&A activities undertaken by Infosys BPO. Gopal also was with Corporate Planning, responsible
for strategy development, earlier to that was based in the US in a sales role, also as the Sales Head for
the Retail & CPG Business Unit. Prior to Infosys, he spent 7 years in the financial services industry
working with Kotak Group in different roles in corporate banking, investment banking and retail banking.
Gopal has a PGDM from IIM, Calcutta, M.Sc (Tech) Computer Science from BITS, Pilani.
Harry Jose - handles the domain competency enhancement initiatives of the Communication Media and
Entertainment (CME) practice at Infosys BPO. Harry has over 7 years of experience, 5 of which has been
in the area of training and competency development. Harry holds an MBA from Nirma Institute of
Management, Ahmadabad.
Vinay Peshwa - Heads the Transformation Office within the Communication Media and Entertainment
(CME) practice at Infosys BPO. Vinay has over 14 years of IT experience most of which was in providing
consulting and technology solutions to Communication Service Providers around the globe. He holds an
engineering degree from Indian Institute of Technology, Kanpur.
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Dealing with the “New Normal” in Finance Operations
Sean Kracklauer, Michel Janssen and Gene Sheikh
© The Hackett Group. Dealing with the “New Normal” in Finance Operations by Sean Kracklauer, Michel Janssen and Gene Sheikh,The Hackett Group, October 2009. Reproduced with the permission of The Hackett Group.
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ABOUT THE AUTHORS
Sean Kracklauer - is the President, Advisory Services and Research, and Practice Leader, Finance Executive
Advisory Program at The Hackett Group. Over the past 20 years, Sean has advised Global 1000 businesses
on strategy, organizational structure and process redesign. He has worked extensively in finance strategy,
business performance management, planning and budgeting, financial reporting compliance, and functional
design for business intelligence systems. His fields of expertise include leading large-scale cross-functional
projects to improve the effectiveness and efficiency of general and administrative service delivery by identifying
the optimal strategy, structure, sourcing and enabling technologies to achieve the business objectives.
Michel Janssen - is the Chief Research Officer at The Hackett Group, and is responsible for analysis,
thought leadership and research activities for The Hackett Group's advisory programs. In addition, he
leads the firm's efforts in advising clients on world-class sourcing and outsourcing. During a career
spanning over two decades in outsourcing leadership positions, he has been a major contributor to the
industry's development and has designed strategies for creating effective relationships between service
organizations and their clients in a wide range of industries and business processes. Prior to joining
Hackett, he was president of Supplier Solutions for Everest Group, a consultancy specializing in strategic,
management and transactional advice to buyers and suppliers of outsourcing services, and co-founder of
the Everest Research Institute.
Gene Sheikh - is the Senior Research Director, Finance Executive Advisory Program, at The Hackett
Group, and is responsible for leading The Hackett Group's finance executive and research agenda across
a range of issues in finance, including transformation, business insight, globalization, partnering and
talent management. Prior to joining the Hackett Group, Gene spent a number of years in strategy consulting
at A.T. Kearney and Bain & Company as well as in industry with GE Healthcare and United Airlines. While
at Bain & Company, he developed corporate and growth strategies for Fortune 100 clients in the US and
Asia, advised private equity firms on M&A strategy and performed strategic due diligence.
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© 2009 Infosys Technologies Limited, Bangalore, India. Infosys believes the information in this publication is accurate as of itspublication date; such information is subject to change without notice. Infosys acknowledges the proprietary rights of thetrademarks and product names of other companies mentioned in this document.
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