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What is Involved in Outsourcing BPM?

Sandeep Johal Sandeep Johal on September 1, 2015

BPM Outsourcing

Currently, many outsourcing methodologies exist and there is no shortfall of online resources. Despite this, there is little understood about the role of outsourcing BPM in these methodologies. Taking key steps from BPM related methodologies and outsourcing methodologies, we have developed the follow set of activities to gain value from any BPM outsourcing arrangement.

Here are the activities involved in Outsourcing from a process perspective:

  • Strategic analysis – the overall strategic direction
    • Provides basis for the need of solutions
  • Process investigation & Analysis (As-Is)
    •  In-depth understanding of current processes (especially if they are core processes)
    • Understand gaps
    • Set benchmarks and key success factors
  • Solution derivation (from an Enterprise perspective)
    • This is where you decide if outsourcing is the solution
    • Understand outsourcing motivations
    • Prepare a business case for outsourcing
  • Tendering process (carefully select suitable service provider)
    • The objects is to select service provider who provides the best solution and is willing to work in a true collaboration
    • The cheapest solution indicates lower profit margins for service provider. Will this be a sustainable arrangement?
  • Process optimisation (done with service provider)
    • Decide on best mix of responsibilities, accountabilities and capabilities for best value
    • Strengthen relationships between the organisation and service provider(s)
  • Perform value analysis & risk analysis
    • Usually done internally but can be done with an professional risk analyst
    • Done hand in hand to ensure obtaining value does not compromise organisational obligations e.g. compliance requirements etc.
  • Design To-Be processes
    • Representation of responsibilities, accountabilities and capabilities
    •  Optimal solutions with input from all parties
    • Strengthen relationships by highlighting value of partnership
  • Perform contractual negotiations (including Process governance)
    • Strengthen relationships
    • Draw up a contract
  • Implementation (Project Management function)
    • Follow the improved process as a guide to plan implementation project
    • Take implementation ambiguity out by defined processes and resources
  • Monitor & control processes (e.g. reports, KPIs)
    • Continue to share vision and improve relationships
    • Encourage learning organisation
    • Measure benefits (consider both quantitative and qualitative aspects)

This can be best described an approach to process centric outsourcing. The main focus was on deriving maximum value by harnessing collaborative relationships within the parties involved. Using principles and methodologies outlined in BPM, outsourcing value realisation becomes methodical.

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Topics: BPM/EA Technology