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    www.infosys.com/bpo

    BPO Future Forward

    Inside: 6Thought Papers

    Technology the New Normal- Enabling Businesses

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    1. Social Networking in Customer Care Centers

    2. The death of distance in Supply Chain

    3. Designing an Optimal Technology Landscape For

    Accounts Payable Transformation

    4. Special Tools for Special Purposes Addressing the

    Sourcing & Procurement Challenges

    5. Winning the Red Queens Race Redoing the math of

    value creation for Communication Service Providers

    6. Dealing with the New Normal in Finance Operations

    7 - 11

    12 - 15

    16 - 21

    22 - 27

    28 - 32

    33 - 39

    IndexINDEX

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    Dear Reader,

    Organizations around the globe are continuing to grapple with one of the most

    challenging business environments. The increasingly rapid pace of technological

    change has made technology the business enabler providing us with opportunities

    to innovate, progress into newer markets and develop newer customer centric products

    and services.

    Businesses need to connect use of technology to their business strategy to focus ontrimming excesses, to focus on their core strengths and get to know how technology

    can enable and drive value to their businesses.

    It gives me immense pleasure to present to you the 4th edition of the Infosys BPO

    Journal which has Technology the New Normal- Enabling Businessesas its central

    theme, and brings views from a global strategic advisory firm and Infosys subject

    matter experts.

    This Journal articulates strategies and solutions to multiple industries by thought

    leaders. This includes areas such as emphasizing the importance of designing anoptimal technology landscape to transform the account payable function within

    organizations. It also focuses on implementing Special Tools which could address

    sourcing & procurement challenges and how technology can trigger the death of

    distance in the supply chain. We also focus on redoing the math of value creation for

    Communication Service Providers, and adopting Social Networking to facilitate

    collaboration in customer service centers and transforming it into a training platform

    to increase its efficiency.

    I would like to thank The Hackett Group and all the authors for their contribution to

    this edition of the Journal.

    I welcome your feedback on this edition at [email protected]

    I wish you all a very happy and prosperous New Year.

    Best regards,

    Ritesh Idnani

    Head of Worldwide Sales and Marketing

    F o r e w o r d

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    Social Networking can be adopted by a Customer Care Center to facilitate

    collaboration. By capitalizing on Social Networking, the Customer Care Center can

    be transformed into an informal learning platform that enables traditional training

    and informative sessions. Team members can benefit from knowledge sharing and

    collaboration leading to increased levels of efficiency at the Customer Care Center.

    Social Networking in Customer Care Centers

    Rajesh Cheeyancheri

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    Addressing Challenges of Customer Care

    Centers

    Companies are focusing on customer service to differentiate

    themselves, ensure customer loyalty and retention, compete

    effectively and remain profitable. As products and services

    become more complex and sophisticated, providing customer

    support becomes challenging. For instance, resolving a

    problem for IPTV service, a next generation television service

    offered by telecom companies, is far more complex than

    resolving an Internet service issue.

    Companies must innovate and launch new products or

    services faster to ensure consistent revenue and growth. As

    the shelf life of these products and services reduce, Customer

    Care Centers have to re-train their staff more frequently to

    handle new services. Since these Customer Care Centers

    are located in multiple geographies, the cost and logistics

    associated with training is daunting.

    In a majority of industries, a technology monopoly is

    redundant. The gap between the market leader and the

    followers is slim because technologies/skills are easily

    adopted. Consequently, companies have to find a distinctive

    value proposition to sell their products. Packaging extended

    warranties and selling premium after-sales services with a

    product have now become a common practice. Customers,

    who buy these additional services, demand that their

    problems are resolved promptly and efficiently. Customer

    Care Centers need to innovate to address these challenges.

    Bridging Social Networking with the Customer

    Care Center

    Social Networking and Customer Care Center are verydifferent concepts.

    Social Networking is becoming increasingly popular because

    it is associated with individual lifestyles and caters to the

    individual's personal activities. It works in a relaxed

    environment with no real deliverables or accountability.

    In contrast, a Customer Care Center is a highly reactive and

    time-bound environment - the clock starts to tick as soon as

    a customer calls and stops when the customer ends the

    conversation. The efficiency of a Customer Care Center

    operation is constantly evaluated and enhanced using a

    number of Key Performance Indicators (KPIs). To meet these

    goals, Customer Care Centers comply with pre-defined

    standardized processes for their day-to-day operations.

    In a Customer Care Center, human capital is a critical resource

    - agents/advisors, team leaders and floor walkers work

    towards a common goal. Human capital can be empowered

    by applying the underlying concepts of Social Networking

    such as forming teams or groups to share experiences. For

    example, when an advisor discusses with his/her peers how

    they handled an irate customer, it offers options to manage

    similar situations in the future.

    Such a collaboration at an advisor level helps improve the

    overall skill level of its staff and creates a more informed

    and empowered organization. In addition to the formal

    training and awareness sessions, collaboration enables

    knowledge sharing obtained through hands-on experience,

    which will otherwise remain confined with the individual.

    When collaboration gathers momentum and attains critical

    mass, it can become a rich repository of data which can be

    analyzed to identify the areas of improvement or emerging

    trends.

    For advisors, it provides an opportunity to transcend routine

    case handling and encourages them to take ownership in

    their work. It offers a platform to showcase their work and

    helps them build a repertoire of case handling skills that is

    not always imparted in training. As clients and counterparts

    are located in different geographies and have different ways

    of talking and writing, a forum to view anecdotes of advisors

    is useful to understand the nuances, conversational styles

    and cultural cues embedded in a conversation. Such skills

    cannot be imparted in classroom training or through

    documentation.

    Integrating Social Networking into theCustomer Care Center

    A Customer Care Center works in a gated mode - advisors

    have access only to a pre-defined set of resources (tools,

    people, applications, etc). The mode of operations is defined

    by factors such as the business model, data protection,

    operational efficiency, etc. These factors must be taken into

    consideration when introducing concepts of Social

    Networking in a Customer Care Center.

    System Generated User Modified Content (SGUMC)

    A fault, case or ticket is the entity around which the whole

    Customer Care Center operates. When a customer calls the

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    Customer Care Center to resolve a problem, it begins with

    the creation of a 'fault', a 'case'or a 'ticket'by the CRM

    application. In its lifetime, the fault is attended to by various

    people with a sole objective - close it at the earliest. Once a

    fault is closed, for all practical purposes, it just becomes a

    quantitative parameter in the different metrics generatedby the Customer Care Center. Invariably, the qualitative

    aspects are not captured anywhere.

    The System Generated User Modified Content (SGUMC) is

    an entity envisaged to capture the qualitative aspects when

    an advisor at the Customer Care Center works on a case.

    The SGUMC entity will have its origin in a system generated

    fault, case or ticket that can be modified by advisors at the

    Customer Care Center to record their observations, analysis,

    comments and anecdotes. Once created, SGUMCs can beshared and exchanged among advisors.

    Advisors and Budadvisors

    Any agent or advisor at the Customer Care Center can

    participate in such a collaborative environment. Just as in

    any social networking environment, advisors can form groups

    and communities. A budadvisor is an advisor who shares a

    special relationship with another advisor. For example, if

    Ted is a budadvisor of Pal, Ted can comment/update Pal'sSGUMC. Advisors select which advisor can become their

    budadvisor.

    Public Sharing Space

    Every SGUMC created in the Customer Care Center will be

    stored in a Public Sharing Space. The SGUMCs created by

    advisors are a good source of information for anyone involved

    with the Customer Care Center. For example, new recruits

    can use it to get up to speed on their work. Similarly, training

    teams can use it to examine any area which requires attention.

    SGUMC in Action

    Let us evaluate three potential SGUMCs and how they

    interact with different actors:

    1. DreamCase

    2. NightmareCase3. Case2Watch

    DreamCase

    Every advisor will have cases that worked perfectly. These

    cases can be self-motivating and provide a 'feel-good' factor

    when one looks back at the work. If an advisor feels that the

    case proceeded well, it may be worthwhile sharing it with

    buddies. The benefits are two-fold: 1- More people get to

    see a case handling they probably can emulate and 2- Itvalidates the advisor's case handling with his/her peers. It

    can also lead to 'bragging' in Social Networking parlance.

    Figure 1: Creating and Sharing DreamCase and NightmareCase SGUMCs

    Step 1: Create SGUMC

    Cases

    DreamCase NightMare

    SGUMC

    Step 2: Share SGUMC with the various Actors

    Step2tep

    DreamCase NightMare

    UserUser

    Public Sharing Space

    Budadvisor

    Budadvisor BudadvisorBecome Budadvisors

    Advisorsat the

    Center

    Share it withBudadvisors,

    Exchange comments

    Submit SGUMC toPublic Sharing Space

    Access SGUMC fromPublic Sharing Space

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    An advisor can selectively build his/hers DreamCase SGUMC

    and share it with the advisor community. When a DreamCase

    is created, it can lead to different situations:

    The advisor can share it with his/her existing

    budadvisor. The budadvisors can comment on the

    cases or begin discussions around it. One interestinguse of the DreamCase can be to use it in training or

    team huddles where the participants can use it as a

    case study and discuss it.

    The DreamCase SGUMC can also be directed to a Public

    Sharing Space. Every registered user can access the

    Public Sharing Space and view the DreamCase. Based

    on the DreamCases, advisors may want to become a

    budadvisor to the author of a particular DreamCase.

    For example, if a Advisor-Z is handling a particularcustomer and sees another Advisor-Y having a lot of

    DreamCases around that customer, Advisor-Z can

    become Advisor-Y's budadvisor.

    NightmareCase

    On the one hand, advisors work on DreamCases, on the other,

    they have NightmareCases. While most people wish to forget

    a nightmare experience, these cases provide important

    lessons for the individual and the Customer Care Center. Itis important to share these experiences with peers. They

    may relate to behavioral skills in handling a particular

    customer or a complicated technical issue that made the

    case very difficult.

    In fact, NightmareCases will attract more discussion and

    comments than a DreamCase.

    Case2Watch

    Today, services delivered to the end user are complex and

    involve multiple organizations and applications. Typically,services have numerous components and a long supply chain

    spanning different geographies linked together by business

    and service level agreements.

    For an advisor who is one of the links in the supply chain,

    the ability to know the status of the case after it had been

    handed over to another organization can be helpful. It can

    be particularly useful for advisors who are closest to the

    end customer to ensure that the case is acted upon and not

    parked somewhere. In addition, it expands the horizon ofthe advisor to understand and appreciate the challenges of

    other organizations that are all part of the supply chain.

    The above situation can be resolved by Case2Watch, the

    SGUMC created by an advisor which will be updated as

    the case progresses. Another advisor who is interested in

    a particular case can subscribe to a Case2Watch for

    updates or to participate in a discussion around that

    Case2Watch.

    Social Networking in a Customer Care Center can facilitate

    collaboration in a highly reactive environment. For the

    Customer Care Center, it is an informal learning platform

    that enables traditional training and informative sessions.

    Figure 2: Case2Watch

    Step 1: Create SGUMC

    Cases

    Step 2: Share SGUMC with the various Actors

    Step2tep

    UserUser

    Subscribe andget updatesabout theCase2Watch

    Update theCase2Watch

    Case2Watch

    SGUMC

    Case2Watch

    SGUMC

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    Technology as an enabler of BPO operations has moved beyond process and

    productivity improvements to being an enabler of the client's business performance.

    Supply Chain BPO services offer the greatest potential in transforming the client's

    business operations by bridging the distance between front and back office supply

    chain processes. Supply Chain Visibility dashboards in particular have the ability to

    enhance collaboration between the client and BPO vendor to optimize the global

    supply chain in real time. We explore the potential benefits and impact the SCV

    dashboard can bring about in managing the supply chain in an outsourced

    environment.

    The death of distance in Supply Chain

    Shyam.R.Rao

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    Introduction

    As the BPO industry has matured, it has developed more and more sophisticated tools and technologies to enable its processes.

    The move has been from simple inward looking tools like workflow and training tools that enabled the vendor's functions to

    automation tools which help boost productivity and improve client's back office functions. The next wave of technology in

    this growth curve will be those that directly impact and enable a client's business functions.

    Impact on client operations

    1Wa

    ve2Wa

    ve 3Wave3Eg: Workflow, trainingtoolsVendor enabling tools Eg: Automation toolsTools impactingvendor and client

    Eg: Supply chaindashboards

    Tools impacting clientsbusiness operations

    >>>>>>>>>>>>>>>>>>>>>>>> >>>>>>>>>>>>

    ToolComplexity

    >>>

    >>>>>>>>>>

    >>>>>>>>>>

    Wave technologies1

    addressed the key concerns of an industry in its infancy - the enablement of operations in a

    stable and efficient manner. Workflow tools and technologies to enable knowledge capture

    and transfer were, hence immediately put into practice to ensure that the operations at the

    vendor's offshore locations were planned and routed through smoothly. The outcome was the

    successful transfer and performance of back office operations at the vendor's premises.

    Wave technologies2addresses issues such as improving the productivity of client's processes being performed by

    the vendor. Automating tools like macros, OCR etc help to reduce effort involved and thus

    reduce costs and increase efficiency of processes for the client and vendor

    Wave technologies3

    will go beyond the process and enable the business performance of the client. This will

    involve moving beyond the process and look at impacting the business metrics of the client.

    Thus Wave 3 technologies will enable BPO organizations to go beyond the incrementalbenefits from initiatives like six sigma, kaizen etc and achieve exponential benefits from

    leveraging "tech as a multiplier" in its processes. This will be particularly effective in

    functions like supply chain wherein the use of technology can bring about increased visibility

    and the ability to pro-actively remedy and optimize the value chain in real time.

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    Enabling the Supply Chain

    The supply chain provides a fertile ground for the

    implementation of Wave 3 technologies due to the

    challenges posed in this area, as well as the exponential

    benefits available from implementing tech based solutions

    to these challenges. Supply chain managers are typically

    confronted with several obstacles in their efforts to optimize

    the value chain in real time:

    The components of the global supply chain are

    disbursed across multi-location, multi system and

    across partners/customers with varying requirements

    and demands with no common platform

    Organizations also tend to have multiple legacy

    systems that will not talk to each other seamlessly

    Observation of "danger" signals cannot be done in

    real time and remedial actions taken in retrospect

    sometimes result in greater damage leading to

    inefficient supply chains

    Out sourced back office components of the value chain

    further complicate the end-to-end visibility and control

    of the supply chain

    Supply chain managers are hence increasingly looking at

    visibility dashboards that link the various components/systems together and provide a consolidated view of the

    performance of the supply chain through well defined KPIs.

    These dashboards combined with analytical and

    collaboration tools will help monitor and influence the supply

    chain to enable real time optimization.

    The Supply Chain Visibility Dashboard

    A supply chain dashboard will typically involve 4

    components:

    1. Configurable metrics- Specific KPI's which cover both

    process (TAT, accuracy, productivity) and business

    metrics (inventory turns, perfect orders, DSO) which

    can be customized by supply chain managers to

    capture their business imperatives

    2. Supply Chain Exception Management (SCEM)- by Alerts

    generated from pre-set values to above metrics. These

    alerts will be routed through role based user hierarchy

    3. Analytical and Collaborative tools- which enable drill

    down root cause analysis and collaborative problem

    solving of above exceptions

    4. Track resolution - through reporting of status and

    impact of corrective actions identified above

    An important feature of the dashboard is its ability to link

    varying systems together and enable the client to view the

    consolidated supply chain and collaborate with the BPO

    vendor of back office supply chain processes to influence

    and optimize it in real time.

    Benefits of a dashboard in Supply Chain BPO

    services

    A major risk that organizations face in outsourcing back office

    processes of a supply chain is that of distance - distance

    from supply chain partners, distance due to time zones and

    distance due to varying systems that prevent visibility and

    inhibit real time control and optimization of the supply chain.

    By integrating supply chain visibility dashboards into the

    outsourced environment, this risk of distance can be

    effectively addressed and overcome. Some of the benefits

    of this integration of dashboard technology and BPO services

    in the supply chain area are:

    The death of distance in the supply chain - thus

    enabling real time monitoring and control of backoffice supply chain processes

    Collaborate in real time with the back office BPO team

    to optimize the supply chain by cross/ upselling,

    expedite/ substitute, prevent stock outs and increase

    conversion ratios

    Provide a productivity tool for the client to manage

    offshore operations by moving the needle from

    process metrics to business metrics1

    Thus by enabling supply chain visibility through SCV

    dashboards in an outsourced environment will de-risk

    offshore supply chain operations and ensure real time

    operational control and optimization. This would of course

    work best when client and service providers collaborate to

    ensure that all touch points in the process are optimized

    through the application of the technology.

    1 Vijai Kumar Balachandra & Radhakrishnan Prashant, "Moving the

    needle in Order Management outsourcing: From Process metrics to

    Business metrics", BPO Journal II, 2008

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    A global provider of imaging technology products and services wanted visibility into

    its service and product performance which include products like digital cameras,

    printers, imaging accessories and equipment. It also needed the ability to track

    consumer concerns, calls, and problems with products, returns and replacements.

    The company partnered with a service provider to create a plug and play supply chain

    visibility and collaboration workbench based on Microsoft BI stack which consolidated

    information fragmented across the company's multi-tier, multi-system global supply

    chain. This customized workbench/dashboard provided the client with a platform to

    monitor and control its supply chain in real time by detecting signs of possible failures

    and resolving them proactively. This visibility into product defects and the agility in

    resolving them has enhanced call center/back office performance and reduced repair

    and return rates, driving up overall customer satisfaction.Case

    Stu

    dy

    Conclusion

    The supply chain provides immense scope to enhance and

    enable the collaboration and optimization of processes

    between the client and his BPO partner through the

    implementation of next generation tools and technologies.

    Supply Chain dashboards which bridge the distance between

    the front and back office components of the supply chain

    and bring about visibility into the client's global value chain

    in particular will help BPO vendors to go beyond process

    improvements and truly impact the business performance

    of the client's operations.

    References

    1. Vijai Kumar Balachandra & Radhakrishnan Prashant, "Moving

    the needle in Order Management outsourcing: From Process

    metrics to Business metrics", BPO Journal II, 2008

    2. Arora et al, "Service Performance Workbench - a strategic

    differentiator", Infosys Whitepaper, Jan 2009

    3. Barret Jane, "Collaborative Inventory Practices yield MarketAdvantage" AMR Research, 2008

    4. Hostmann & Richardson, "Succeed with business

    intelligence by avoiding 9 fatal flaws", Gartner Research,

    Sept 2008

    5. Kard Khalid, "Real World Example: Eastman Kodak Security

    Metrics Dashboard" Forrester Research, Apr 2009

    6. Orlow et al, "Making dashboards actionable" Forrester

    Research, Dec 2003

    ABOUT THE AUTHOR

    Shyam.R.Raois a Solution Anchor in the Order Management practice at Infosys BPO. He has 9 years of

    experience in the supply chain area in the Hi-tech and Discrete manufacturing space. He is an alumnus

    of the London School of Economics

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    Companies that leverage technology to automate their Accounts Payable (AP)

    function can achieve sustainable, long-term benefits by aligning cost optimization

    objectives to their long-term vision and strategy.

    Designing an Optimal Technology Landscape -For Accounts Payable Transformation

    Shubha Subramanian, Ved Vyas, Rajagopal NVS

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    The current economic condition has caused companies to

    experience severe revenue and cost pressure and an

    uncertain future. As a result companies are banking on

    technology to deliver benefits beyond just "cost savings"

    and help create transformational benefits that

    can help them not just in turbulent times but in good timesas well.

    One area which is becoming an important agenda item for

    companies all over the world is the automation of AP

    function, because even today an overwhelming majority of

    invoices in companies are paper based. With billions of

    dollars worth of invoices getting processed every month,

    inefficiencies in invoice processing and delayed payments

    to suppliers can lead to increased costs and end user

    dissatisfaction. Given that manual processing of supplierinvoices costs anywhere between US $10 to US $20 per

    invoice, and keying in information from paper invoices is the

    most time-consuming and the least value added task in AP

    departments, companies are increasingly looking at

    technology to drive down costs and improve efficiencies in

    their AP processes. Companies that have successfully

    automated their AP function have managed to bring down

    costs to less than $5 per invoice resulting in transformational

    cost benefits and significant bottom-line improvement. Other

    benefits include faster ROI, minimized impact of process

    failures and delays, cash management and working capital

    optimization, improved decision making, enhanced controls

    and supplier satisfaction.

    Traditional approaches to technology involve understanding

    of immediate concern areas and gaps, and investing in

    software solutions to address those short-term concerns.

    The sections below, however, advocate an approach where

    the "gap analysis" is done against a "Technology MaturityRoadmap" and the long-term strategic vision of the

    company.

    We believe that companies that embark on transformation

    through technology enablement should do a two way

    assessment on before designing the optimal technology

    landscape for its AP function. The assessments involve a

    detailed review of the following:

    existing processes and technology the company

    currently has;

    profiling and segmentation of their supplier base and

    evaluation of suppliers' capabilities and fitment into

    the overall technology solution. BPO service providers

    play a major role in helping companies tailor

    technology solutions to meet their needs and

    requirements, and more importantly, in translating

    their long-term vision into action. The sections below

    describe the approach to be followed for the initial

    assessment phase.

    Technology Maturity Framework and Gap

    Analysis

    Technology maturity refers to a company's ability to leverage

    technology to automate its manual, non-value added tasks

    and provide real-time information to enhance decision

    making capabilities. The technology maturity framework is

    intended to help companies assess their current level of

    maturity vis--vis an evolution roadmap. There are 4 levels

    defined in the maturity model.

    Level 1

    is primarily targeted at controlling paper workflow

    of the company.

    Level 2

    involves integrating the imaging and workflow

    solution with ERP and sets the foundation for

    simplified invoice processing.

    Level 3

    involving integration between invoice processing

    software and the ERP system also includes an

    electronic workflow. This integration can empowerdecision making process by providing real-time

    visibility of invoice status, informative dashboards,

    automated escalations and alerts.

    Level 4

    is primarily applicable to large organizations that

    operate in multiple geographies, languages and

    have large volumes of data. This level requires heavy

    up-front investment in supplier data management

    solutions, e-invoicing, Supplier portal, payment

    factory.

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    Low complexity High complexity

    Level

    0 Level

    1 Level

    2 Level

    3 Level

    4

    Manual

    Processing

    No workflow

    Implement

    scanning

    system

    Implement

    workflow

    Implementscanningsystem (OCRintegrated)

    Implement ERPintegratedwork flow

    Implement ERPintegrated POsystem

    Implementinvoice trackingsystem

    Implementapproval via ERPintegratedsystem

    Implementvendor querystatus trackingsystem

    Automaticuploads of

    vendor masterdata requestsinto ERP system

    ERS EDI / e-invoicing Vendor portal Introduce

    payment factory

    Manual

    No Paper Flow

    Automated Data

    Flow

    Real timeenvironment

    Automate throughe-Invoicing

    The tools and technology solutions currently used and their

    capabilities thereof will need to be mapped against the

    maturity framework. This will help a company in identifyingits current state of technology maturity and benchmark its

    capabilities against best-in-class (Level 4). This

    benchmarking exercise can help companies identify

    investments and capabilities required to transform its AP

    function.

    As companies aspire to move up the maturity model, there

    would be varying levels of investments required at each level.

    Any investment in technology should be planned in such a

    way that it acts as a business efficiency enabler and providestangible business benefits. The high technology investment

    required to automate some of the manual, non-value added

    activities in the AP process is one of the major reasons for

    outsourcing the AP function to BPO service providers.

    Supplier Profiling and Segmentation

    Another important evaluation involves a detailed study of

    the supplier database to understand the profiles of thesuppliers the company deals with and their historical

    behaviour pattern. Companies with insights and

    understanding about their suppliers are better placed to

    collaborate with suppliers to innovate their products and

    service offerings. Technology acts as a key enabler that

    facilitates this collaboration with the extended enterprises.

    Data analysis can help in identifying distinct supplier

    segments and understanding the characteristics and

    constraints that define each of the segments. The questions

    to be considered while identifying the supplier segments

    include:

    Are the suppliers regular or one-time suppliers?

    Do the suppliers supply goods or services?

    Are the suppliers high-volume or low volume

    suppliers?

    Are the transactions with the suppliers of high- value

    or low value?

    Are the purchases from the suppliers against a PO or

    are they non-PO supplies?

    Are the transactions with the suppliers simple or

    complex in nature (attributes to be considered include

    language capabilities, invoice formats, geographies,

    tax related issues etc)?

    More often than not, companies will have to deal withsuppliers with varying degrees of technology maturity. The

    supplier profiling and segmentation exercise can provide

    pointers about the type of technology investment required

    to optimize ROI. The company should consider investing in

    Table 1: AP Technology Maturity Model

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    ERS and EDI / e-Invoicing for high-value and high-volume

    suppliers. Though the company has to make upfront

    investment in setting up the technology platform and process

    for reconciliation, long-term benefits (by way of improved

    working capital predictability, improved on time payment

    capabilities and significant reduction in processing costs)can be quite significant. For the suppliers, the benefits would

    include prompt payment, better cash forecasting, lower bad

    debts etc. On the other hand, for low-value, high-volume

    suppliers, P-card implementation might be the optimal

    solution. Similarly for suppliers who are in the mid-segment,

    a company may decide to implement image scanning

    integrated with workflow as it requires no investment from

    suppliers but can yield significant benefits to the company.

    The diagram below is an illustrative list of technologysolutions that companies could consider for their supplier

    segments:

    Therefore a thorough understanding of the supplier segments

    and their characteristics can go a long way in engaging with

    the suppliers and designing the most appropriate technology

    interventions for each of the supplier segments that can

    provide win-win situations for suppliers and companies.

    Designing an Optimal Technology Landscape

    Evolution of technology is not a linear process and a single

    approach to technology should not be uniformly applied to

    companies. Rather a "One Size Fits All" approach to

    automation needs to be replaced by a strategy that is

    customized to fit a company's overall strategic vision, needs

    and expectations from technology solutions.

    The optimal technology landscape should be finalized after

    taking into consideration the following factors:- current

    technology capabilities, relationship maturity of the supplier

    segments, tangible and intangible benefits expected from

    automation and strategic long-term vision of the company.

    Identification of the desired state in maturity model will help

    in identifying gaps, prioritizing resources, focus areas and

    will, more importantly, aid in chalking out an action plan to

    get to the desired state. It should also enable the company

    to cope with the immediate constraints and challenges while

    making it agile enough to adapt to the changes that the

    business might undergo in future.

    Companies do not have to go through the various levels of

    technology maturity in sequence and can adopt a multi-pronged

    approach to realize optimal benefits from the automation

    Table 2: Technology Solutions for Supplier Segments

    Supplier Characteristics BenefitsSolution

    ERS

    Suppliers with established mutualtrust relationship

    # of invoices and invoice value arelarge

    Manual goods receipts against POs

    Supplier invoicing and invoice entry process eliminated No delays in payment, pay only for what you receive. Pre-determined invoice cycle time resulting in improved working

    capital predictability Processing cost per invoice will be in the range of $ 0.80 to $ 2.50

    EDI or ElectronicInvoicing

    Non-ERS suppliers # of invoices and invoice value are

    large Manual goods receipts against POs

    No manual intervention required to process invoices Improved invoice cycle time and visibility through invoice life

    cycle Reduced Processing cost per invoice Improved ability to avail early payment discount

    P-Card / Self ServiceVendor Portal

    Low value purchases Prepayment

    Minimize the manual efforts through p-Card, Self Service Vendorportal, PO flip etc

    Simplified process

    Paper-Based Invoices # of invoices and invoice value ismedium or Low Paper invoices for suppliers with

    no e-invoice capability

    Centralized sorting and OCR scanning resulting in improved

    process efficiency Workflow enabled with integration with ERP to reduce cycle time

    and improved visibility through invoice life cycle Approval workflow for non-PO to ensure compliance and visibility

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    process. There are tangible benefits to be reaped in each of the

    levels of the maturity model and based on priorities, pain areas

    and resource constraints, companies can, with the help of BPO

    providers, move up the evolution chart either in a fairly short

    time-frame or over a longer period of time. For example,

    companies that are at Level 0 (of the technology maturity model)can leverage outsourcing and technology expertise of their BPO

    partners to move to Level 3 in the short-run. However not all of

    its suppliers would be ready or willing to invest in technology

    for several reasons including ROI, strategic importance of the

    supplier, value of business transacted between the company

    and the suppliers etc. It is, therefore, imperative to adapt to

    other alternatives to accommodate suppliers unwilling to invest

    and overhaul their existing processes.

    In the process of automating functions, it is important toalign process improvements with technology solutions and

    create a synergistic value to companies. Only then can the

    benefits be truly enduring. BPO providers have the requisite

    capabilities to combine expertise in process outsourcing and

    technology in a synergistic way within the AP framework to

    provide integrated value benefits to companies.

    Proven technology and optimization expertise of BPO service

    providers can enable companies to scale up the automation

    of their AP functions at reduced cost and in a relatively short

    period of time. BPO providers will work with companies not

    just in automating and harmonizing their internal AP

    processes but also in analyzing and working with the various

    suppliers to design optimal technology solutions for each of

    the supplier segments depending on their relationship

    maturity levels (Refer Table 2). The benefits that BPO

    companies provide are mentioned below:

    Working CapitalEfficiency

    Reports and analysis

    Predictability of working capital requirements Improved Discount Capture % High Visibility on Payables outstanding Unlock cash flows Prevent late payments (& penalties)

    Operational Efficiency

    Workflow tools

    ERP Integration

    Automation - OCR

    Reports and analysis

    Improved Paid on Time (PoT) capability

    Productivity

    Escalation and tracking

    Well informed policy decisions

    ContinuousImprovements

    Drive Standardization andharmonization

    Improved Accuracy Innovation Best Practices Sharing

    Consolidation - One process for allgeography/entity

    Leveraging the best talent across industries Year on year reduction in TCO Eliminate waste and non-value added activities

    End User Satisfaction Supplier Portal (Self Help tool for

    suppliers)

    Minimal time spent on answering Invoice statusand payment queries

    High visibility of supplier queries and highersupplier satisfaction on account of accurate andpredictable payments

    Controls & Compliance Audit Trail

    Duplicate Processing control

    Automated Approval flow

    Electronic Audit Trails

    Revenue leak avoidance

    Better enforcement of business and SOx controls

    Cost Optimization

    Outsourcing Work Flow Tools Special Handling of discount

    eligible invoices Help in converting Paper based

    invoicing Supplier to electronicbased (ERS, EDI or E-Invoicing)

    ~30% Cost savings, Labor arbitrage & shift in

    focusing controls, Macro Management

    Productivity and Cost Reduction

    From Cost Center to Self serving model.

    Reduction of Manual invoice processing and cost

    of the same

    Offerings of theBPO Service Provider Benefits to Clients

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    Conclusion

    Companies all over the world suffer from an over-reliance on manual processes. The inefficiencies of the manual processes are

    often overlooked during times of high growth but become prime candidates of focus during times of recession. New tools,

    technology and platform solutions have evolved in the last few years that can automate the manual, non-value added tasks

    inherent to AP function and provide transformational benefits to companies.

    ABOUT THE AUTHORS

    Shubha Subramanian - heads the Finance Center of Excellence and handles domain competency and

    knowledge management initiatives of F&A practice at Infosys BPO. She has worked in the core finance

    and accounting functions for several companies and also has experience working as a trainer. Shubha is

    a Chartered and Cost Accountant and also holds MS and MBA degrees in Corporate Finance from University

    of Wisconsin, U.S.A.

    Ved Vyas is responsible for driving the products & alliance strategy and commercialization in the F&A

    practice at Infosys BPO. Ved brings around 14 years of experience in program management, customer

    relationship management, outsourcing transition and business development. Ved has led many cross-

    functional and multi-location teams to ensure delivery of ERP implementations and custom development.

    He has also worked as a Manager in Steel Authority of India (SAIL) for a couple of years where he was

    involved in production planning & control. He is a B.Tech graduate from IIT-Kanpur and an MBA from

    IIM Ahmadabad.

    Rajagopal NVS is the P2P Product Manager for F&A Products & Alliances team at Infosys BPO. He has

    rich experience in P2P domain - managing operations / designing products & developing reconciliation

    solutions. Raj has worked with global corporations - across industries like manufacturing, dot com, Capital

    and healthcare. He is a commerce graduate.

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    Although a number of procurement technologies have entered mainstream adoption,

    there is significant continued innovation in procurement, as evidenced by new

    technologies, and ongoing refinements in current offerings and product offering

    restructuring. Several procurement technologies are becoming mainstream

    solutions, including strategic sourcing applications, spending analysis and

    e-procurement. These solutions are appealing to a wide audience because of their

    proven track record to enable and/or deliver significant cost reduction.

    * Hype Cycle for Procurement Applications, 2009; by Deborah R Wilson, Andrew White, et al.;

    28 July 2009, Gartner, Inc.

    Special Tools for Special Purposes - Addressing theSourcing & Procurement Challenges

    Bipin Wadhwa with Ravi Panchanadan

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    Enterprise resource planning systems have been, for some

    time, the key automation enablers of procurement function.

    They have, perhaps in many cases, created discipline in

    transactional process execution and resultant data

    management. However, the Chief Procurement Officer's (CPO)

    challenge to reduce procurement cost can be furtheraddressed at various stages of sourcing and procurement

    cycle, through use of specific special purpose automated

    tools (which may be decision support, process accelerators

    or collaboration tools).

    Special purpose tools are generally used for a niche set of

    activities such as spend reporting, spend analysis,

    negotiation management, (master) data cleansing, cost policy

    compliance and control. No doubt organizations can evaluate,

    implement and deploy such solutions entirely through internalefforts, but now with evolution of service offerings by

    Business Process Outsourcing organizations, using their

    services can create additional advantages - of service

    knowledge, expertise and cost.

    The context - CPO Challenges

    The economic recession has brought forth the need to reduce

    and control costs. The Chief Procurement Officer's role hasgained importance given the CPOs teams' influence over

    managing spends. While proven technologies that enable

    transactional activities exist, such platforms may not generally

    always support every facet of sourcing and procurement

    activities that can help reduce or manage spends better.

    For example, from a CPO's perspective, the reduction of cost

    & better cash flow can be achieved by sourcing better. For

    this, summarized & detailed view of all spends must be

    available through a decision support CPO DASHBOARD,

    preferably at the finger tips of the CPO and his team. It should

    enable the management, at various levels, to understandthe progress over key procurement performance metrics,

    which area or category could potentially need deeper

    investigation for correction, or a relook at strategy.

    But then, this is easier said than done, for many a time, the

    reporting flexibility in applications used may be limited - after

    all each one has his own approach to review the information.

    Special purpose tools have been able, to a large extent,

    address these by using feeds from different application

    instances, and providing the dashboard, which can furnish

    the desired summary, and dig deeper to identify possible

    area of variance. Similarly, organizations can take advantage

    of sourcing and procurement point solutions, which provide

    niche functionalities to address different challenges.

    The fundamental difference - ERP and Special

    Purpose tools

    Growth is an imperative strategy of all organizations. As

    organizations grow in revenue and size - people, capacity,

    volume, sites, products and services, the underlying operations

    need to keep pace. Enterprise resource planning platforms

    enabled implementation of collaboration between various

    parts of the organization, through set of well defined and

    standard processes. In doing so, they enabled a resultant

    repository of data, or database, consisting of transactionalCPO DASHBOARD

    Using MS SQL Servers, SharePoint &

    Performance point technology, a CPO

    Dashboard can provide an individual user

    defined dashboard layout, with instant alerts

    and mail messaging collaboration

    SPENDING SCORECARD

    % of Savings YOY

    % Spend under Management

    Active Suppliers per Billion & Spend

    % Spend from High Cost Countries

    7.45%

    92.55%

    204.65#

    53.35%

    ValueGoal &Status Trend

    11.22%

    89.05%

    45.12#

    52.00%

    Examples of processes that were primary

    focus of enterprise resource planning are

    raising & approval of purchase requisitions,

    raising of approved purchase orders based on

    purchase requisitions, recording of goods

    receipt, recording of invoice and matching

    them with purchase orders and goods receipts,

    recording of payments to vendors and

    reporting of payables. For a very large

    organization, the sheer volume of these

    transactions can be mind-boggling, and well

    served by such applications systems

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    data generated through execution of processes. Many of these,

    due to the nature of standardized and well defined processes,

    permitted themselves to be outsourced to captive or third party

    shared services organizations.

    Special purpose tools, on the other hand, address a specific

    activity or set of activities that may help in providing analytics

    to supporting decisions, or accelerators to executing

    processes, or collaborate with suppliers.

    found to fall short. They generally have ability to interface

    with, or use data from, varied end to end technology solutions.

    Uses, deployment challenges of special purpose

    tools in sourcing & procurement functionsHowever, this may be easier said than done, for either data

    required are available in different and variant systems

    The spend analysis solution tool is enabled by on line analytical processing

    or OLAP technology, which allow fast analysis of shared multi-dimensional

    information. Unlike traditional database management systems, which store

    data in many two dimensional or flat tables, OLAP technology allows data

    to be in a three dimensional table. It supports multiple hierarchieswhich

    allow data to be categorized and classified & viewed at various levels

    (dimensions, nesting and categories).

    It permits easy data manipulation- slicing (extracting values relating to a

    single value of a dimension), dicing (extracting a sub cube of original), rotating

    (changing the dimension orientation or swapping a row/column with a off-

    spreadsheet dimension).

    Data from different systems, with different file & data formats, can beported

    (loaded)into the solution tool. One can define a standard format and for

    each source data type, rules to load and convert into standard need to be

    defined and re-used.

    Similarly, for creating analytical reports, rules based reporting templates can

    be created. Any ad-hoc reporting template, can also be created using certain

    commands.

    An important aspect of the point solution tool is that all hierarchies and

    rules set can be modifiedwith limited efforts.

    WHAT

    CREATES

    THE

    ADVANTAGE?

    Illustrated with

    example of how

    typical spend

    analysis solutionworks.

    For example, with the set of data available through the

    repository generated from enterprise resource planning

    systems the procurement leaders would need an analysis of

    their spend for a period. Special purpose tools can help

    facilitate the tasks to collate, organize, classify, analyze &

    summarize spends for each category or commodity, by various

    dimensions. The base data will be obtained from the enterprise

    resource planning databases, processes & analyzed in the

    special tools. Generally, you may find the special purpose tools

    a better option to use, because of their concentrated focus,

    the tools have built in niche functionalities to address varied

    issues involved (tactical or transactional). They are often

    resorted to in areas where general end to end solutions are

    (enterprise resource planning or legacy applications), or data

    may not be adequate, or capability to conduct the analysis

    may be limited. Then again, the humungous information may

    first require DATA CLEANSING, issues arising from the

    DATA CLEANSING

    Special data integration tools can facilitate

    review of the data from various systems,

    analyze issues, and clean data based on

    defined data quality rules

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    existing junk or duplicate data or availability of data in

    different formats. So, there will be efforts required to carry

    out data rationalization, data enrichment and organizing to

    a standard data schema - perhaps both at transactional and

    / or master data level. Special purpose tools can serve as

    process accelerators here.

    The cleaned data can be analyzed by various dimensions,

    using the SPEND ANALYSIS tools, a combination of process

    accelerators and decision support. The resultant output

    enables visibility of spend patterns. One may even need to

    enrich the existing spend data set by adding external valuessuch as data or supplier codes, from external sources, to

    permit better classification and analysis. For sourcing, the

    spend view can provide an enhanced understanding of the

    spend requirement and its patterns. The enhanced spend

    data reports, amongst others, can thus be used for reviewing

    or developing and deciding on spend strategies.

    As we go downstream in the process, there are other e-

    SOURCING tools that well serve collaboration with suppliers,

    which we find useful. During the sourcing strategy execution,one may need to invite request for proposals (RFPs) or

    information or quotations (RFIs/RFQs), to allow various

    suppliers to bid and compete. This may be a time consuming

    process, if we leave it as manual paper based or simply email

    based enabled. Collaborative tools for such request can be

    used. These tools permit online contact, submission of

    requirements and terms, with response from suppliers and

    creating comparatives. These special tools or applications

    can create reduced cycle times and processing efficiencies.

    Moreover, sourcing tools have also been found to be useful

    to negotiate, with short listed suppliers invited for on-line

    reverse auctions. Such on-line auction tool can be used well,

    with variance of what data we want the suppliers to know.

    These indeed have led to cost savings, by the sheer visibility

    of, and increased competitiveness amongst suppliers. And

    it creates transparency in purchasing and supply process!

    But, does all procurement take place as per contract terms

    and conditions? Is there any chance of cost leakages due to

    say, incorrect prices being levied or in appropriate

    implementation of the terms? Such conditions could exist in

    many organizations, and many times trying to keep track of

    all of these can be quite challenging. Two such instances

    are keeping track of use of software licenses (SOFTWARE

    ASSEST MANAGER) and managing telecom spends

    (TELECOM EXPENSE MANAGER). Suffice to say, each have

    own set of challenges. There are tools to accelerate the

    process of compliance and control for such special cases.

    It usually is in the interest of procurement to ensure that the

    organization pays only for the software licenses actually

    used, and to identify license reallocation opportunities. One

    needs to evaluate compliance of software license terms.

    But again, the use of licenses may be decentralized, with

    many points of use. Tools can be deployed on servers, to

    gather the license usage data from various systems, which

    can then be analyzed for deployment patterns, and identify

    areas for rationalization and changes. Surely, preventing over

    utilization, in many cases, means preventing penalties.Under-utilized licenses can perhaps be discontinued. But

    deploying this tool needs some specialist understanding and

    then, there is manual effort in conducting the compliance

    review once the inventory is generated.

    In the second case, telecom expense is generally a large chunk

    of the spend portfolio given the ever increasing dependence

    of electronic means of communication. Each region may have

    its own set of service carriers, who are contracted with, andneed to be managed. The new connection requests, old attires,

    requests, call reports and invoices all of them arguably deserve

    scrutiny, as the sum of errors may prove to be a large hole in

    the pocket. The solution, as do others, needs combined set of

    SPEND ANALYSIS

    Based on OLAP technology, these tools can

    port spend data sets from different systems,

    permit classification at different levels of

    data, defined analytical reporting templates

    and generate multi-dimensional spend reports.

    Standard and ad-hoc reports can be thus

    generated in a speedy manner, with spend

    patterns made visible with high and detailed

    level views available

    SOFTWARE ASSET MANAGER

    Such tools can generally easily be ported on

    to organizations' servers, under secure

    conditions, and can inventories the usage of

    specified high costing software licenses. The

    software license can be monitored

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    tool and services, that can establish a cost effective and

    scalable network, improve transactional service efficiency and

    reduce cost of operation.

    These are some examples of special purpose tools, which

    can add value to the sourcing and procurement processes.

    In some cases, ERP vendors may include them as part of

    their offerings, or organizations may need to source it fromother vendors. Having said that, in certain cases, one may

    develop it! But all in all, such special purpose tools have

    been found useful for decision support or as accelerators to

    the processes or as collaborative tools.

    Advantages of engaging a business process

    outsourcing partner

    Traditions change. And so has what a good business processoutsourcing partner can do for you.

    There may be little doubt regarding the advantages that such

    tools offer. But there can be implementation challenges and

    extensive manual efforts. Given the challenges related to

    systems and data, there are enormous manual activities

    involved in this processes, generally because large

    companies require handling huge volumes.

    Business process outsourcing / off shoring units are in a

    position to specialize in providing the comprehensive

    solutions to complex spend data harnessing and analyzing

    issues. It can combine service with special purpose tools, to

    provide the overall solution, based on the client's strategy.

    Firms can take advantage of these since:

    Clients can gain not just on labor arbitrage, but also

    from the expertise gained through varied experiences.

    And from comparative speed of implementation when

    handled by such experts

    With extensive experience, one tends to have a well

    developed methodology to handle such complex issues

    The methodology, coupled with the solution tool,

    provides a unique opportunity for clients to outsource

    such strategy and procurement support and focus on

    sourcing strategies for high end products and services

    Furthermore, any existing tie ups by the BPO for the

    solution tool can reduce the effort on tool selection

    and training process

    Creating the initial set ups, indexing, mappings, templates and rules for

    data porting or analytical models etc., in various tools (CPO Dashboard,

    Data Cleansing, Spend Analytics, Software Asset Management)

    Data profiling, rationalization, enhancement, enrichment, and

    maintenance (CPO Dashboard, Data Cleansing, Spend Analytics)

    Capturing data not available in the systems, from various manual & non-

    manual sources (CPO Dashboard, Data Cleansing, Spend Analytics,

    eSourcing, Software Asset Management)

    Order provisioning, inventory management, invoice reconciliation &

    dispute management, usage management (Telecom Expense

    Management)

    Setting up requests for information/quotations/proposals, bids and

    reverse auctions based on defined criteria ( eSourcing)

    Conducting compliance reviews and audits, based on defined criteria

    (Software Asset Management, Telecom Expense Management)

    Generation of related analysis and reports (perhaps all above)

    In deployment

    of solutions

    with special

    purpose tools, abusiness process

    outsourcing unit

    can provide

    services, in the

    areas of

    (examples of

    solutions

    discussed above,

    where these

    may be relevantare given in

    brackets):

    TELECOM EXPENSE MANAGEMENT

    Such tool can automate telecom related

    inventory, order tracking, call detail reporting,

    auditing. The tools can link to various known

    applications systems.

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    Conclusion

    Traditional data BPO services were enabled by end to end platforms, owned and managed by clients and used by the outsourcer.

    The current trend is moving to BPOs investing in development of specific point solutions, which combine service and niche or

    special purpose tools. It creates advantages for clients in terms of improvements in cost and effort investment -comparatively

    reduced implementation time, benefits arising from not just labor arbitrage, but from ready expertise and centralized focus

    services, and possible available tie ups for such tools.

    ABOUT THE AUTHORS

    Ravi Panchanadan - Heads the Global Sourcing & Procurement Practice at Infosys BPO. Ravi has over

    18 years of rich experience in Global Sourcing with Intel Corp and in overall Supply Chain Mgmt with

    Unilever. He has been instrumental in setting up International Purchasing Office for Intel in India. Ravi

    has a Post Graduate Diploma in Management from Xavier's Institute of Management.

    Bipin Wadhwa is part of Global Sourcing & Procurement Outsourcing practice at Infosys BPO. He has 14

    years of diversified experience in the area of Operational Process Consulting & Risk. Bipin has been

    instrumental in setting up Center of Excellence for Sourcing and Procurement at Infosys BPO. He has

    conducted process consulting & discovery assignments involving solutions design and feasibility

    assessments, including centralization of processes in a Shared Service Center Model. He is a Chartered

    Accountant, Cost Accountant, and certified MBA from Indian Institute of Management, Bangalore with

    specialization in Supply Chain Management.

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    "Now, here, you see, it takes all the running you can do, to keep in the same place.

    If you want to get somewhere else, you must run at least twice as fast as that!"

    Red Queen to Alice, 'Through the Looking Glass' by 'Lewis Carroll'

    Winning the Red Queens Race Redoing the math ofvalue creation for Communication Service Providers

    Gopal Devanahalli, Harry Jose, Vinay Peshwa

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    The Red Queen might as well as have been talking about

    the Communications Service Provider (CSP) marketplace

    of today. Entry of nontraditional entities like Cable and

    Utility companies and resultant competition, dwindling of

    customer base and obsolescence of business models (e.g.

    wire line voice) are making CSPs strive twice as hard tomaintain their ARPUs (average revenue per user), let alone

    grow it. Getting ahead in this 'Red Queen's race is possible

    only if CSPs are able continuously exceed the expectations

    of their customers through the launch of new products and

    services- even if it comes at the cost of Capex intensive

    network/technology upgrades such as 3G,4G,FTTX rollouts,

    femtocells etc. CSPs have responded to these changed

    realities in the market place by chalking out detailed

    product portfolio expansion plans in both wireline and

    wireless space and have committed significant investments

    running in to billions of dollars.

    Challenges in keeping Customers 'satisfied'

    While launching new products and services will enable

    CSPs to meet customer expectations, ensuring that they

    remain satisfied is possible only if operational process

    metrics (fulfillment, assurance and billing metrics) arealigned to the customer experience drivers (ease of

    installation, quick and painless complaint resolution, single

    bill for multiple services etc.). This is an area where most

    CSPs are facing challenges. The fact that most CSPs have

    retained their legacy systems and process frameworks for

    the fulfillment, assurance and billing of newer products

    and services have not helped their cause, either.

    Operational inefficiencies are resulting in revenue and cost

    leakages as well. Consequently most CSPs today are

    grappling with a number of challenges in their existing

    operations framework. For eg

    Product failures- incomplete analysis of supply chain at

    the time of product launch have caused product

    failures due to supplier lead times being longer than

    committed installation SLAs.

    Customer dissatisfaction/ attrition due to installation

    delays- improper logistics management have resulted

    in issues like delayed installation due to CPE(Customer Premise Equipment) being unavailable at

    the time of installation engineer visit/ loss of CPE etc.

    Revenue Loss-Though revenue assurance systems have

    been set up for most of the existing portfolio of products,

    CSPs are still struggling to addressing leakages in

    revenue for their newer products such as IPTV.

    If done right Business Process Outsourcing can enable CSPs

    overcome these operational challenges.

    Unlocking the value gained from Business

    Process Outsourcing - the concept of Value

    Multipliers

    The initial business process outsourcing value proposition

    was one of cost arbitrage. Over time BPO firms have built

    upon this value proposition and enhanced the value they

    provide to CSPs by undertaking process improvements

    through reengineering and six sigma techniques. However,

    today a combination of two contrasting factors is compelling

    CSP firms to reconsider their engagement models and the

    value they derive from their outsourcing partnerships.

    changed market conditions and challenges faced on

    the operational front by CSPs - cost reduction

    perspective

    the competency demonstrated by pioneering BPO

    firms in moving beyond the traditional SG& A focus

    and developing solutions addressing the Cost of

    Service & Sales portion and Operating Revenues in

    P&L - value creation perspective

    The question CSPs are now posing to their BPO partners is

    whether, by leveraging on their CSP operations expertise

    gained over the last few years, they can move beyond

    process level improvements and create value at an end-to-

    end value chain level.

    The implication is that the BPO firm needs to be able to

    deliver not only on the CSP operations metrics but also on

    the CSP business metrics as well. This calls for a deep

    business driver level understanding of the CSP's line of

    business, understanding of how the operational metrics

    affects these business drivers as well the expertise to

    positively impact the identified business drivers by

    eliminating systemic inefficiencies through utilization of a

    core organizational competency such as the ability to do

    customized technology interventions. A BPO will then be

    able to create a value multiplier for the CSP rather than

    merely provide a process level savings.

    According to us a Value Multiplier is a combination of two

    competencies

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    Business Process Outsourcing firms leveraging on their understanding of complex CSP operational and

    business drivers and technology capabilities can multiply the outsourcing value gain for CSPs with out the

    need for substantial Capex investments. Such an approach enables CSPs to optimize their operational

    costs and focus their Capex investments on new product/service development and technology changes/

    network upgrades.

    As the pace of global business continues to accelerate, the ability to align with a partner who has the

    deep -rooted understanding of industry business metrics and the capability to positively impact them will

    be a key to success. Only this will ensure that the CSP will win the Red Queen's race. CSPs need to include

    this capability as an important item on their checklist when they are evaluating outsourcing partners.

    of information can be created which can be mined to get

    customer insights by a team of experienced BPO professionals.

    The insights gained can be used in two ways by the

    operations team:

    Target a customer segment, eg. fine tune market

    offerings for a customer segment based on real time

    customer feedback gained through this type of

    analytics tool

    Target individual customer, eg. Enhance Upsell/ cross

    sell opportunities during interaction of the customer

    with a customer care representative, create Just-in

    time marketing campaigns, etc.

    Here the value multiplier effect is created by creating a

    technology intervention to pick up hitherto unidentifiable

    customer data points and interpreting them to develop critical

    insights which positively impact a key business driver - the

    ability to upsell /cross sell, creating a level of value which

    would not have been possible to create by the current wayof operations within a CSP.

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    ABOUT THE AUTHORS

    Gopal Devanahalli - Heads the Communication Media and Entertainment (CME) unit at Infosys BPO. He

    leads the M&A activities undertaken by Infosys BPO. Gopal also was with Corporate Planning, responsible

    for strategy development, earlier to that was based in the US in a sales role, also as the Sales Head for

    the Retail & CPG Business Unit. Prior to Infosys, he spent 7 years in the financial services industry

    working with Kotak Group in different roles in corporate banking, investment banking and retail banking.

    Gopal has a PGDM from IIM, Calcutta, M.Sc (Tech) Computer Science from BITS, Pilani.

    Harry Jose - handles the domain competency enhancement initiatives of the Communication Media and

    Entertainment (CME) practice at Infosys BPO. Harry has over 7 years of experience, 5 of which has been

    in the area of training and competency development. Harry holds an MBA from Nirma Institute of

    Management, Ahmadabad.

    Vinay Peshwa - Heads the Transformation Office within the Communication Media and Entertainment

    (CME) practice at Infosys BPO. Vinay has over 14 years of IT experience most of which was in providing

    consulting and technology solutions to Communication Service Providers around the globe. He holds an

    engineering degree from Indian Institute of Technology, Kanpur.

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    ABOUT THE AUTHORS

    Sean Kracklauer - is the President, Advisory Services and Research, and Practice Leader, Finance Executive

    Advisory Program at The Hackett Group. Over the past 20 years, Sean has advised Global 1000 businesses

    on strategy, organizational structure and process redesign. He has worked extensively in finance strategy,

    business performance management, planning and budgeting, financial reporting compliance, and functional

    design for business intelligence systems. His fields of expertise include leading large-scale cross-functional

    projects to improve the effectiveness and efficiency of general and administrative service delivery by identifying

    the optimal strategy, structure, sourcing and enabling technologies to achieve the business objectives.

    Michel Janssen - is the Chief Research Officer at The Hackett Group, and is responsible for analysis,

    thought leadership and research activities for The Hackett Group's advisory programs. In addition, he

    leads the firm's efforts in advising clients on world-class sourcing and outsourcing. During a career

    spanning over two decades in outsourcing leadership positions, he has been a major contributor to the

    industry's development and has designed strategies for creating effective relationships between service

    organizations and their clients in a wide range of industries and business processes. Prior to joining

    Hackett, he was president of Supplier Solutions for Everest Group, a consultancy specializing in strategic,

    management and transactional advice to buyers and suppliers of outsourcing services, and co-founder of

    the Everest Research Institute.

    Gene Sheikh - is the Senior Research Director, Finance Executive Advisory Program, at The Hackett

    Group, and is responsible for leading The Hackett Group's finance executive and research agenda across

    a range of issues in finance, including transformation, business insight, globalization, partnering andtalent management. Prior to joining the Hackett Group, Gene spent a number of years in strategy consulting

    at A.T. Kearney and Bain & Company as well as in industry with GE Healthcare and United Airlines. While

    at Bain & Company, he developed corporate and growth strategies for Fortune 100 clients in the US and

    Asia, advised private equity firms on M&A strategy and performed strategic due diligence.

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    Infosys BPO Ltd. (www.infosys.com/bpo), the business process outsourcing

    subsidiary of Infosys Technologies, focuses on integrated end-to-end

    outsourcing and delivers transformational benefits to its clients through

    reduced costs, ongoing productivity improvements, and process

    reengineering. It has been recognized as one of the leading BPO providers

    in the world by The International Association of Outsourcing Professionals,

    NASSCOM, Dataquest, Red Herring, FAO Today, NelsonHall and others.

    Infosys BPO operates in India, Czech Republic, China, Philippines, Poland,

    Thailand, Mexico and Brazil.

    Questions? Opinions?

    Please visit

    http://www.infosys.com/bpo