The dynamics of offshore BPO is much different than the dynamics of the IT development work that offshoring has grown up on. Traditional offshore work, including ADM (Application Development & Maintenance), is different for BPO on many levels. ADM is an arm's length away from enterprise operations, while BPO is close to the heart of operational structures. Research indicates that horizontal, high-volume, transaction-intensive functions, such as customer relationship management (CRM) call center functions, and HR payroll and benefit administration functions, are currently more advanced in comparison to financial, IT consulting and strategy functions. Because BPO requires deep vertical rather than horizontal expertise, offshore providers worldwide are leveraging existing customer relationships in developing BPO solutions.

The need for Integrated outsourcing solution is based on the argument that businesses have to re-assess the scope of activities performed by external vendors to leverage synergies by consolidation of outsourced services. Businesses have to look beyond the myopic silos of business transactions, IT applications and infrastructure and take a holistic view of business processes that includes all three components. Such a re-assessment will enable organizations to make IT accountable for its contribution to the overall corporate profitability, while reducing hand-offs and eliminating disconnects between departments and external service providers. Companies cannot afford to fix processes and IT systems one at a time, rather by putting business processes at the center stage of all outsourcing including IT, corporations gain the ability to innovate, reenergize performance, and deliver value that today's market demands. Adopting "Integrated outsourcing" will enable organizations to make agile course corrections, embed Six Sigma quality, and reduce costs while improving productivity across the value chain.

The following highlights the main components of " Integrated Outsourcing " solution from Expedien.

• A structured approach for transition exists and comprises 3 tracks (Business Process Outsourcing, Application development and maintenance and Infrastructure tracks) going through the stages of transition assessment, execution and parallel run.
• Process - Application clustering analysis is a key concept of Transition Management and helps to draw a boundary around processes to be outsourced. As mentioned earlier traditional outsourcing drew a sharp distinction between human transactions and IT systems. Process - application clustering is the foundation of integrated offshore outsourcing that enables this distinction to be obliterated.
• Offshorability analysis is done for each Process-application cluster. This includes determining offshorability of transactions, application maintenance and application development.

Process Steady State Management aims to optimize, reduce cost and innovate to create competitive advantage through process & technology channels.

• We have defined a "Process lifecycle, System Lifecycle and Infrastructure Lifecycle" model that shows how the hand-offs take place seamlessly.
• The Six-Sigma approach and its DMAIC cycle are central to Outsourcing's improvement & innovation management.

Risk Management addresses various types of risks mitigation strategies that encompass provision of integrated services.

• Risks are categorized as disruption risks, loss of control risks and vendor lock-in risks.
• A shared risk mitigation infrastructure is a critical element of the "Integrated offshore outsourcing" and helps address the risk of disruption.
• The client's involvement in the process execution and monitoring, both onshore and offshore, well documented process maps, defined financial models for exit, knowledge / resource transition plans and well defined end of term agreements help address the risks of loss of control and vendor lock-in.

SLA Management presents a combined face of IT and BPO services and helps achieve the unified business owner's view.

• SLA management for steady state operations can be viewed as operating at three different platform levels - Operational level agreement, IT service level, and business process level.
• SLA management in integrated offshore outsourcing focuses on much more selective set of metrics rather than inundating the business owner with plethora of performance data, thus giving a highly targeted visibility into the performance of the processes.
• The same applies to Process/Systems development activities. By combining all the elements of the Process Development Life Cycle, our IT and BPO teams offer streamlined project management and consolidated accountability to business owners.

Integrated offshore outsourcing journey
Outsourcing engagements can be divided into three levels of integration of multiple services as they progress towards "Integrated offshore outsourcing".

• Level 1 engagements are where the client has outsourced a single component of the business process either transactions or application development.
• Level 2 refers to engagements where the outsourced vendor is accountable for transactions and all applications that these transactions have dependencies on.
• Level 3 in addition includes the infrastructure component. In outsourcing the infrastructure component associated with a single Process, there is a cost of reducing scale economies of moving a piece out of a shared infrastructure set-up. Thus the addition of infrastructure should be addressed when a critical mass of process-application clusters have been outsourced.

• Cost Arbitrage refers to as-is offshoring of existing business transactions, application development or infrastructure support. The benefits realized are primarily due to cost or skill arbitrage and increased leverage due to variable cost structure. Most of smaller offshore vendor's value propositions are limited to that of cost arbitrage.
• In Service Optimization, the relationship focus moves from utility benefits to realizing enhancements and increased effectiveness due to process improvements and optimizations. This is due to the investments in continuous improvement methodologies like Six Sigma, CMM, etc.
• In Innovation and KM, the focus is on business transformation, increasing the amplitude and frequency of improvements and creating competitive advantage to clients.

As outsourcing engagements move from Level 1 to Level 3 outsourcer's ability to undertake continuous improvement initiative goes up. The increased scope of control over various business process components enables it to undertake projects, which otherwise would have been discarded due to high cost of hand-offs and co-ordination cutting across organizational boundaries.

Value Proposition
With "Integrated outsourcing" model Expedien is uniquely positioned to enable organizations to move towards increased levels of integration of services. It not only brings in the cost arbitrage benefits, but also helps to realize sustainable competitive advantages due to focus on continuous innovation and knowledge management. Some of the key values are:

• A structured approach to Transition and Steady State Management
• Approach for transition comprises 3 tracks (BPO, ADM and Infrastructure tracks) going through the stages of transition assessment, execution and parallel run
• We have defined a "Process lifecycle, System Lifecycle and Infrastructure Lifecycle" model that shows how the hand-offs take place seamlessly
• Introduce a unique practice of "Process-Application" clustering analysis for defining the boundaries of outsourcing better
• Six Sigma driven approach
• Single point accountability for combined SLAs
• Increased innovation by synchronized changes to entire process ecosystem
• Achieve cross divisional, cross geographical coordination
• Reduce transaction costs, vendor management, coordination costs
• Effective knowledge management
• Scale from transactional to analytic activities

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