June 6, 2003—Even with the increased awareness and adoption of business process outsourcing (BPO), BPO services are still immature, and early adopters of BPO are still trying to understand their cost and business benefits, according to Gartner Inc., a research and advisory firm based in Connecticut.
“Enterprises must systematically analyze their internal business processes, and associated external service provider offerings, to best determine possible improvements to the bottom line,” says Rebecca Scholl, principal analyst for Gartner’s sourcing group. “As this understanding is gained, enterprises can determine what processes can likely be outsourced, and can then investigate what is and is not readily available from external services providers.”
To help enterprises do that, Gartner has created the BPO Market Model, which segments business processes into three broad categories:
- Demand Management Processes: Those processes that link an organization with its customers. This category includes customer selection, customer acquisition, customer retention, and customer extension.
- Supply Management Processes: Those processes that are focused on responses to customer demand. This category includes move (moving products or services), store (storing products or information), make/deliver (the creation and delivery of a product or service), and buy (buying materials for product or service generation).
- Enterprise Service Processes: Those activities that are necessary for every enterprise, regardless of industry. This category includes human capital management or HR, finance and accounting and regulatory, IT, and facilities management.
The Gartner BPO Market Model shows that with all three categories of processes, enterprises must first determine if it is appropriate to outsource an entire category of processes, a single process or even a piece of a process. Factors that will influence this type of decision include an evaluation of how strategic the process is, how integrated the process is with other support services, and what is available in the marketplace at what level of stability.
For more information, read the Gartner Dataquest report “BPO: Climbing the Learning Curve” online. Gartner will provide additional analysis on the outsourcing industry at Gartner Outsourcing Summit 2003,to be held June 23-25 in Los Angeles, Calif.
