Business Process Outsourcing Market

Business Process Outsourcing market has grown at an exponential rate of 25% during recent years and is estimated to be worth $309 billion. This is the result due to increasing number of companies that outsource their critical business across different domains such as finance, human resource management etc. Apart from operational effort, service providers are expected to inculcate a culture of “dynamic innovation” to improve clients operating efficiency, business-process effectiveness and strategic performance.

The article defines innovation as “something that improves the customer’s services or costs, regardless of its novelty.” In order to stimulate innovation, clients and service providers must work together, as well as clients should motivate their service providers with Incentives. Some of the approaches to incentivize innovations are mandatory yearly productivity targets such as committing to improve clients’ productivity by 5% per year. Secondly, the companies and their service providers can contractually target certain innovations to perform. Additionally, the companies and service providers can contractually agree on profit sharing. This works best at project level and is one of the best approach as well where both clients and BPO providers are benefitted. Additionally, competition with the peer BPO providers may provide motivation for future innovations. Moreover, choosing the right people to lead and use governance can be a measure to incentivize innovations. We need a comprehensive approach towards delivering innovation. In order to deliver innovation, the clients and service providers must follow a comprehensive approach. For example, a welcoming and transparent culture helps both the aspects of the clients centralized as well as decentralized business services, which might be extended to several different organizations across different geographies, help them to tackle challenges such as cost control, productivity, flexibility and customized services. In that case, even a service provider at remote location is well acquainted about his contributions. Another approach to delivering innovation could be a result from ideas generation. Ideas can come up as a combined effort from clients and BPO providers by challenging status quo, and hypothesis. Also, checkpoints can help the organizations to identify innovation opportunities. Additionally, proper channel of funds can serve as a great boost for delivering innovation. These funds can be jointly or singularly funded by the client and their service provider or sometimes even by the stakeholders. Moreover, a streamlined change management process can help deliver innovation ideas. The client’s centralized business services organization and globally dispersed end users accept the Innovation prior to its execution. The client must actively be involved in the execution of changes that innovation brings to the table and a strong commitment is required in order to