Podcast: Transformative BPO. Rich Bailey Vice President of Communications and Business Process Outsourcing Xerox Global Services July 2009

Transcription

1 Podcast: Transformative BPO Rich Bailey Vice President of Communications and Business Process Outsourcing Xerox Global Services July 2009

2 Every organization today is searching for ways to reduce costs and become more efficient but after you ve tweaked everything there is to tweak, how do you make the kind of breakthrough that really moves the needle? How do you make that big, bold leap that really changes the game? For a growing number of corporate change agents, the answer is transformative business process outsourcing because it has the potential to turn an operational headache into a best-in-class process that just keeps getting better and better. But what kind of results are clients actually getting? And how do you get started on the road to BPO success? To answer those and other timely questions, we re going to turn to one of the experts in the field; a man who has been a leader in the business process and IT outsourcing industry since the very beginning. Hello everyone, I m Julie Meyers for Xerox Global Services and I m here today with Rich Bailey, our Vice President of Communication and Business Process Outsourcing, who also wears another hat as our thought leader on transformative BPO. Hi Rich thanks for joining us today. Hi Julie thanks for inviting me. I want to talk about some of the dramatic improvements that organizations are getting from BPO, but first let s define our terms. Rich, what do you mean by transformative BPO? Is it any different than basic business process outsourcing? Well yes, it is and business process outsourcing definitely has its place and it s important for us. But transformational business process outsourcing as we ve defined it is a lot more than that. It s more than handing off your mess and letting an outsourcer manage it for less. It s about continuous improvement; it s about process optimization; and it s about taking your organization in a different direction or enabling the organization for the future rather than just maintaining an existing process for less money. So it truly is transformational, and particularly transformational for the processes that can be targeted by an organization. So the results, they can clearly be around cost and speed and efficiency and productivity, but they can also be about creating competitive advantage for the future being able to secure customer loyalty and brand image; being able to take organizations and enable them with new capabilities so they can effectively compete against competitors, both traditional competitors and maybe non-traditional competitors in the marketplace. Okay, I think I got it. Now let me put you on the spot can you back up those claims with real-world results? Well, that s the most important question of all now, isn t it? Does transformational business process outsourcing deliver the promise in actual client settings? Let me give you just three examples to explain what I m talking about. One, a diversified technology manufacturer with operations in over 100 countries. They wanted to change and improve the way they produced and distributed thousands of sales and marketing and engineering documents throughout their business through a transformational BPO solution, the company was able to implement a webbased, print-on-demand document management system that significantly reduced order fulfillment time by as much as 80% and cut costs for production, distribution, and storage by over 25%--clearly a significant change in their business. And to achieve that change, they needed an outsourcing provider that wasn t going to just outsource the current process, but take them to a new process that d allow them to achieve these results. You know, another major oil and gas company was able to significantly change the way they do business. They had multiple lines of business you know, millions and millions of documents that they had a hard time managing. In fact, they had more than eight million documents across these groups, all managed in a decentralized environment. By implementing a new approach and outsourcing key elements of the process, they were able to save $2.2 million, created an established process which gave everyone instant access and consistent access to critical safety documentation, processing and procedural documentation, and even drove more efficient processes at their headquarters location. 2

3 The last example I ll share with you is a financial services company. By changing the way they performed a critical function within their business, they were able to reduce cycle time by 95% and actually generate over $2 million in savings with an innovative approach. Did you say 95% in cycle time? Did I get that right? Yes, that is right, believe it or not. We took what was a five-day process down to a two-hour process and it didn t happen overnight. It clearly was a transformation and I think this is why we re talking about the subject today that took place over time. So when we define a vision, identify an outsourcing approach, sometimes the organization can t move fast enough to get there overnight, so this transformational process is actually a series of steps that took place over an extended period of time to be able to achieve that result. But yes, a 95% reduction in cycle time you got it right. Wow, that has to be one of the best cycle time improvement stories of all time. But doesn t the word transformative suggest more than just faster process? Yeah. Clearly, cycle time reduction and cost reduction are key benefits and important for every organization, but the type of outsourcing approach that we re talking about and why it s so transformational not only is increased productivity and efficiency a key result but, you know, results can also increase or improve customer satisfaction and loyalty and retention. It can change the way an organization conducts a function. So while doing business one way in the past was okay, maybe that isn t appropriate going forward. So how do you get to that new process or get to that future state of where you want to be that can drive those cycle times, increase the information flow, change the way in which we do business with our customers, with our business partners, with our vendors. You know, there are lots of things that organizations are looking to transform, and that s why this transformational outsourcing approach has been widely accepted and we re seeing a lot of interest in it. Okay. Well, you and I go way back and we ve both spent a lot of time in the manufacturing area. In fact, manufacturers were the first companies to see the value of outsourcing, right? That s right. I mean, offshore manufacturing capabilities have been out there for decades. Over the last 20 years, we ve seen more of the information technology outsourcers involved, particularly in manufacturing companies, and also in the back office with, you know, accounts payable, accounts receivable, and other functions. Manufacturing companies are definitely some of the ones that ve been leading the outsourcing approach. Okay, so they were first, but what new opportunities do you see for BPO to address challenges in this industry? Well, that s another very good question. Clearly, this isn t brand new, but there are a number of things that re emerging with the changes in how manufacturing companies are going to market. First off is the basic challenge of how to address a growing customer base. So as the world gets smaller, we have more opportunities to market our services and products to new geographies, and a key part of that is how to distribute product, how to market products, and how to support products in those geographies and that presents a whole series of challenges. One, regulatory; two, language translation and localization; thirdly, printing documentation and supporting and shipping products on a just-in-time basis. And in many cases, you know, getting a product to market faster can give you a significant leg up on your competition and being a laggard in a particular marketplace can really hurt your presence in a new geography. So we re seeing solutions that can help customers take products to market faster, and it isn t just about manufacturing and engineering; it s about all the things that are involved in shipping, supporting, and selling a product. So that s one key area that we re seeing a lot of interest in right now. That s fascinating stuff, Rich and I know you and I could spend the whole time talking about manufacturing challenges and solutions. But what about other industries and other fields? 3

4 Oh, absolutely. I mean, transformational business process outsourcing can have impacts in just about every industry out there. You know, we re seeing these types of approaches being used in the way banks process mortgages; how litigation work is done from a discovery perspective and litigation support perspective; managing contracts and proposals. R&D archives are something that we re seeing customers tap into now as mergers and acquisitions take place, particularly in the healthcare space; being able to take research and redeploy it has been, you know, extremely important. And then in the traditional areas of HR, finance and accounting, customer management you know, all of these areas are ripe for optimization, and this type of approach, in some cases, is very, very appropriate. Very interesting. Okay, so let s assume that one of our listeners is intrigued by what you re saying and wants to take the next step. What is the next step in terms of transformative BPO? Well, the three basic steps that I always recommend is, one, be holistic; develop a big-picture view of what you re trying to accomplish. Don t take it down to, you know, myopic pieces of a process, but think of big picture for the organization and think across departments. It can t be a departmental solution; this is an organizational approach. And then decide whether you can handle this change in-house or do we need outside parties to be the facilitators bringing in experts, change management resources; those types of people can add a significant amount of expertise, whether you re going to maintain the process in-house or leverage an outsourcer. But then finally I think the most important piece is if you are going to engage an outside party for either facilitation or for eventually outsourcing, make sure you pick the right outsourcing partner. The right partner will make all the difference. Okay but who is the right partner? I mean, obviously we want people to think of Xerox and Xerox Global Services as the right partner, but beyond that, what should people really look for? Sure. Well, I mean, clients just look for partners that have experience and expertise in a particular area. They obviously do this for other clients; they have state-of-the-art technology, they have best practices; they have a platform that drives much of this. You don t want one-off solutions being delivered to you by your outsourcing providers; you want them to leverage what they have in place. You want to have disciplined, data-driven management activities and methodologies deployed within your organization so an organization that uses like a Lean Six Sigma approach like we do, those are key indicators of whether that would be a good partner. Look for their investment in R&D and continuous improvement. Are they going to bring innovation? And where have they brought innovation to other clients? That would be a key question that I think is important to ask as part of that. Like I said before it s more than just outsourcing the current mess for less; it s about improving the process, and not just improving it once, but improving it over time and having an end vision of where the market is going to be three to five years from now. And then I guess the other key thing is looking at, you know, where they ve transformed processes for others and where your organization will match up to those types of changes. An outsourcing engagement, to be successful, needs to have your organization transform with the provider so that s a key area. And you know, as I mentioned before, particularly in manufacturing, these are now global companies, so having expertise in change management and operating across the globe is extremely important. So I think those would be the key areas I think clients should look for. Wow there s a lot of content there and a lot of things to think about, so I m sure we can talk about that for a really long time at some point, but unfortunately we re running short on time today. So before we leave, I do want to say that there s one very important question left: The economy. I mean, it s still challenging and, you know, everybody s question s gonna be Is this really a good time for an organization to launch into business process outsourcing? Well, I think you know, obviously everyone s situation is going to differ, but in some ways right now would be the perfect time for this type of an approach. As organizations are looking to cut costs, the status quo doesn t cut it anymore, and sometimes it takes an outside party to facilitate that type of process change. So if you think about the benefits one, you know, the basic is reducing costs and improving efficiency, and doing so on a year-over-year basis. I think that that s important in today s economy. But secondly, looking at where you want to be two to three to five years from now, and will your current processes and your current limitations of what you have in place today and where you re allowed to spend your capital dollars and investment dollars are they going to get you there? And if the answer is No, an outsourcing provider that can provide those types of services allows you to do so 4

5 without having to make those investments in capital, in training, in people, in time on your own. So from that perspective, it s a good time. And then lastly, I think you really need to investigate the value of what this type of transformational outsourcing approach would be able to bring you, and based on your evaluation, maybe now s the time or maybe now s not the time. But I think it s definitely something everyone should consider. Great. Well, thank you for taking the time to talk to us again today, Rich it s always a pleasure. Julie, thanks for inviting me. I enjoyed it. Okay, stay tuned for future podcasts on the power of transformative business process outsourcing with Rich Bailey. And don t forget to check out his white papers, e-newsletters, and podcasts on our thought leadership site at Xerox.com/ThoughtLeadership. You ll also find an easy way to subscribe to his newsletters as well as Rich your questions or comments. Once again, I m Julie Meyers. On behalf of all of us at Xerox Global Services, thanks for your time. [END OF RECORDING] 2008 Xerox Corporation. All rights reserved. Xerox and the sphere of connectivity design and Smarter Document Management SM are trademarks of Xerox Corporation. 5