There’s a golden opportunity for South African companies — one that turns their delay in investing in outsourcing and shared services into a unique strength.
By John Watling, MD of Accenture Operations in Africa
By plugging directly into the delivery machine of an experienced business process services provider, they can sidestep many of the challenges endured by earlier adopters. This enables businesses to leapfrog competitors and drive business value — rather than being a back-office function.
The world of business process outsourcing (BPO), broadly defined, has undergone multiple incarnations. Pure facilities management preceded data and infrastructure outsourcing; thereafter came application support. We’ve now moved into a new era, however — that of business process support (BPS) — allowing an external partner to manage everything from finance, to HR, sales support, credit and collections, as well as digital marketing.
Local companies have been reluctant to rely on third-party delivery of key services — in many cases due to fears around loss of control, where there is a legacy thinking of ownership equalling control.
That said, South Africa has not been left untouched by traditional BPO — the application and IT areas have matured particularly over the past five years.
Going forward, however, as we begin to see major moves towards drivers such as as-a-Service, increased automation and artificial intelligence, for forward-thinking South African companies, leapfrogging competitors is going to be all about taking advantage of those next-generation capabilities today.
A fundamental shift from BPO to BPS
Once, outsourcing meant taking as many people as possible and setting them up in a delivery centre. All that is changing. A combination of the on-tap liquid workforce, robotics, access to industry expertise, cloud technology and artificial intelligence — that’s where the sphere is headed.
Fixed costs are declining steeply; you now buy services as you need them. Digital is remaking outsourcing — ‘outsourcing’ as a term in fact is no longer accurate. It’s all about business process services and the way BPS enables more effective, intelligent decision making.
There are further changes. Whereas cost reduction once lay at the core, the key driver is now business outcomes — selling more products, improving account usage and increasing revenue. Another relates to a mindset shift. A service such as finance or procurement — when managed by an external partner — is now no longer simply a back-office process.
Analytics function becomes capable of shaping how a business thinks about itself. Utilizing an expert service provider means that those in both middle and upper management are freed to think more strategically.
Given the benefits, it’s hard to understand what’s been preventing companies in South Africa from taking the plunge, although lingering fears around the ownership-control continuum may have played a role.
At first blush, it appears to some that loss of ownership of a function means loss of control over it. In fact, the converse is often true — particularly in the sense that a more arm’s-length relationship often results in better decision making. Interestingly, utilizing an expert provider like Accenture can give you greater control through deep expertise and a commercial arrangement giving committed performance and business outcomes.
Crucially, having largely side-stepped the shared services model, South African companies are now able to take a ‘long-jump’ approach to BPS: moving straight from in-housed disparate functions to plugging directly into an expert partner’s value delivery machine.
Many businesses in developed countries will, by contrast, have undergone a longer, ‘triple-jump’ process, having worked on a shared services basis in between, and endured the associated restructuring and upheaval.
The value of going direct
Companies in South Africa will no doubt begin to increasingly realise the value and gains business process services enable — fixed costs decline as services are bought as needed; migration into cloud platforms powers both scalability and ease of access.
The liquid workforce means high skill at reduced, flexible cost. Further, there are the benefits made possible not only by automation, but increasingly, by cognitive computing and artificial intelligence. The list goes on.
As drives around efficiency, flexibility and reactivity reshape the global business landscape, successful companies will need to realise operational efficiencies and access the strategic insights made possible by expert partners. It just so happens that South African companies may be uniquely well positioned to do so.