In my humble opinion, Business Process Outsourcing is a great way for an organization to see things from a different perspective. Not just innovation within the particular process being outsourced but that can “show the way” on how to innovate in other internal departments. It’s innovation that leads by example.
Here are some thoughts on how to leverage your BPO to spark internal innovation and growth:
- Develop an intimate relationship with your BPO. The closer you get to your BPO, you begin to get a sense of how they operate and what makes them so efficient. This can help you extract principles to apply in other areas of your business.
- Tap into the content knowledge that your BPO has regarding your industry and/or company. While the process of BPO is – in theory – industry-agnostic, good BPOs will truly grasp their client’s business and leverage this knowledge for client success. Ask your BPO service provider if they have knowledge you aren’t aware of and don’t be afraid to ask their opinion on other areas of your business. Odds are they are seeing things within your industry and are working with other companies who might do things different from you.
- Think like a BPO. At Jumpstart:HR, one of the things we try to do well is process optimization through constant feedback of results. Companies don’t put us to task on our processes but hold us accountable to outcomes. If at all possible, consider evaluating processes and don’t be afraid to look outside of your business for inspiration.
Here are some examples of how BPO helped spark internal innovation:
- A BPO provider helped a health care company improve the claims adjudication process by using analytics to predict claims likely to result in rework. The predictive tool now intercepts more than 50% of claims that would have been reworked, saving the client $25 to $50 in administrative costs per overpaid claim and $6 to $12 per underpaid claim. (Source: http://sloanreview.mit.edu/article/outsourcing-business-processes-for-innovation/)
- An aerospace manufacturer worked with its BPO provider to add new key performance indicators and processes to manage third-party vendors. This allowed the client to improve customer-order fill rates for new parts from 60% to 85% and turnaround times for delivering parts to grounded vehicles from 21 hours to 17 hours. (Source: http://sloanreview.mit.edu/article/outsourcing-business-processes-for-innovation/)
- Jumpstart:HR recently helped a non-profit client establish a management structure that has resulted in faster decision making and increased accountability. This realignment has indirectly led to increased donor funding and increased their client base by roughly 24%.