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July - 2010 - issue > CEO Spotlight
BPO Vendors Align with Clients via Cost Optimization
Nitin Pangam
Monday, July 12, 2010
The present times make it pertinent for every BPO vendor to align with the clients to create better value and such approaches have popularized the concepts like transformational outsourcing. It is the capability acquired by a BPO after servicing clients in the different space that allows the firms to study the different experiences and make them capable enough to draw out operational efficiencies via usage of technology.

Thus, it ensures a flexible and adaptive business architecture. The companies acquire intelligence via working on the clients’ processes and use the learning to service the client organization in a much effective way. The usage of business intelligence in the BPO firms has increased as there are competitive pressures to deliver effective results with the emergence of new outsourcing destinations.

The cost consciousness dawned on firms during the recession has made every client demand better cost advantage in services, resulting in cost optimization pressures on the vendors. The challenge lies in providing service at the same or better level at a reduced cost. So, the industry has to scout new technology advances that will help them to constantly optimize their cost. Also, the political and economic compulsions are forcing the IT vendors to seriously consider globalization and they are continuously setting up hubs in the US, the UK, and Europe. Companies are increasingly foraying into different countries to get close to the clients, and in return have readily increased job opportunities across the globe. However, in terms of optimizing their cost or scouting for certain niche capabilities like efficiency in a particular language, the companies have renewed their interest in emerging markets like Africa, China, and Latin America.

It gives a boost to their onshore-offshore presence. With their presence well-balanced, the outsourcing industry tends to constantly evaluate opportunities to innovate. Thus, by staying closer to the clients, the companies can churn out different solutions amidst turbulences like the current European crisis or the recession.

Especially for new entrepreneurs, the competitive advantage lies in innovating to make their business processes more efficient. Also, with the regular issues of investments haunting them every time, collaboration has come to play a big role in successfully sustaining the business. The collaboration of different processes within the organization or collaboration of different services between organizations is important.

The author is the CEO ofMaeflower Consulting

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