In this blog Mike Lane looks at business process outsourcing and how this type of IT Governance should be based on what's best for the Enterprise
Up, up and up… the percentage of organizations utilizing business process outsourcing (BPO) is only going one way – up. Not surprising. What Enterprise wouldn’t want to take advantage of the innovations in technology and service delivery available, to create value more effectively and efficiently than is possible ‘in-house’?
Today’s questions are more “What can we outsource?” and “When can we outsource?” rather than yesterdays “Will we outsource?” And what tended to be fuelled by costs savings, is now driven by what can be leveraged for competitive advantage… from core operations, to information technology to market penetration and diversification. Anything and everything is up for BPO! No process is ‘safe’…
We’ve all heard the adage or perhaps more aptly the acronym PPT, and no I don’t mean a Microsoft PowerPoint presentation. People, Process and Technology – PPT. BPO service providers, are like any other organization, bringing together PPT to deliver products and services for the Enterprise. The only difference is that they are masters of innovation, specializing in providing the most optimized processes, executed by exceptionally skilled people, utilizing the latest and greatest information technologies.
Whether it’s an IT BPO delivering the Enterprises Information Technology function, or any other process dependent on Enterprise IT, there’s no getting away from technology. The question is “How do we govern and manage Enterprise IT in an (IT) BPO environment?” and do we need to? Many organizations are unfortunately still stuck in the dark ages, thinking functionally about BPO and technology, and looking at outsourcing things like Technical Support, Front Office, Back Office, Business Intelligence (BI), Customer Service… or worse, Tin Cans (Infrastructure). But is that the future? No. The future of (IT) BPO is strategically aligned, integrated, technology empowered solutions for the Enterprise. These need to be governed and managed within the organization, even though their delivery is largely ‘external’ to the Enterprise.
Cloud architectures, exponential growth of Mobile communication, social networking, Collaboration… technology innovations abound, and with them the ever important need for IT governance. In fact the subject of Governance (and Management) of Enterprise IT in the BPO space, is a relatively new and challenging domain. One must remember that in parallel to BPO and technological advancements, the demands on Corporate Governance and therefore IT Governance so too have increased dramatically. If anything, BPO has introduced, and arguably forced, an extended dimension to the realm of IT Governance.
I have had many a discussion with Enterprise executives who are virtually paralyzed by the seeming conundrum of (IT) BPO, and IT Governance and Management. But on the other hand I have run into myriads of early adopters and embracers, who rather than being stifled by such concerns, pursue a relentless strategic objective of BPO and seek out ways to achieve the levels of Governance and Management required. Again I say, their decisions are around Whom and What will give us what we need! And when it comes to IT Governance and Management, most take one turn, to COBIT 5.
COBIT 5 is a business framework, focused on the Governance and Management of Enterprise IT, which can be applied to (IT) BPO, as ubiquitously as it can to internal information technology delivery. In fact, this framework does not dictate where and how your Enterprise IT should be delivered at all – its architecture, business model and service provider agnostic. Around the globe countless organizations are already using the COBIT 5 framework for governing and managing the delivery of Enterprise IT by BPO service providers, be that holistically or in a hybrid model where certain IT process have been retained internally.
Any organization in the 21st Century that is contemplating (IT) BPO wants to be assured that Enterprise IT Governance and Management is uncompromised should they choose to outsource some or all of their technology processes. When these Enterprises embark on reviews of their business models, and conceptualize opportunities for innovation and re-invention, IT governance is without fail a critical factor in decision making around models for the provision of Enterprise IT services. Enterprises should be free to choose what they believe is best – (IT) BPO included. With COBIT 5 they can. COBIT 5 provides the ability and capability for governing and managing Enterprise IT in any way, shape or form, not only satisfying Enterprise IT Governance and Management needs of the organization, but the Enterprise’s Corporate Governance regime too!
BPO and IT BPO specifically, are changing how organizations structure, operate and sustain themselves. The information age and the information technology revolution provide endless opportunities for service providers and Enterprises to synergize in the delivery of IT processes for business. This infinite cycle of innovation paints a future where (IT) BPO takes the form of solutions oriented IT service delivery for the Enterprise, wholly independent of where and how the IT is provided. Whilst the choice of solutions provider may be the subject of vigorous debate, at least when it comes to the Governance and Management of Enterprise IT, there’s one easy call to make - COBIT 5.