How to reduce the costs of BPO transformation programs?

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Trimming the Fat from BPO Transformation Patrick Nolot, Global Program Director, ADP Add kick to your transformation Transforming your organization to international General and Administrative (G&A) BPO is all about creating more efficient business processes. In the end, the transformation should mean reduced general and administrative operational costs. Unfortunately, the actual transition from “as is” (existing organization and processes) to “to be” (optimized organizational processes that better serve the company’s business objectives and market challenges) can be, if not handled carefully, time consuming and costly. Fortunately, with considerable upfront planning and a well-designed strategy, the transition is ripe with opportunities to not only drastically cut unnecessary costs, but to also simultaneously ensure the smooth and rapid success of the entire project. In the transition to G&A outsourcing, speed and quality are achieved by reducing timelines and producing quick successes. PART 1 “For me, the keys to success are speed and quality.” In my experience working with multinational companies implementing G&A BPO, there are specific actions that can be taken to reduce the costs associated with the transition period. As you will see, the vast majority of the following tips happens during the early stages of the transition – or even before the transition begins! I can’t say it enough; the more you plan the more you save. Six tips for speed and quality How to reduce the costs of the transition process

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Transforming your organization to international General and Administrative (G&A) BPO is all about creating more efficient business processes. In the end, the transformation should mean reduced general and administrative operational costs. Unfortunately, the actual transition from “as is” (existing organization and processes) to “to be” (optimized organizational processes that better serve the company’s business objectives and market challenges) can be, if not handled carefully, time consuming and costly. However, with considerable upfront planning and a well-designed strategy, the transition is ripe with opportunities to not only drastically cut unnecessary costs, but to also simultaneously ensure the smooth and rapid success of the entire project. In the transition to G&A outsourcing, speed and quality are achieved by reducing timelines and producing quick successes. This article offers six winning tips to help you improve speed and quality, saving both time and money.

Transcript of How to reduce the costs of BPO transformation programs?

Page 1: How to reduce the costs of BPO transformation programs?

Trimming the Fat from BPO Transformation

Patrick Nolot, Global Program Director, ADP

Add kick to your transformation

Transforming your organization to international General and Administrative (G&A) BPO is all about creating more efficient business processes. In the end, the transformation should mean reduced general and administrative operational costs. Unfortunately, the actual transition from “as is” (existing organization and processes) to “to be” (optimized organizational processes that better serve the company’s business objectives and market challenges) can be, if not handled carefully, time consuming and costly. Fortunately, with considerable upfront planning and a well-designed strategy, the transition is ripe with opportunities to not only drastically cut unnecessary costs, but to also simultaneously ensure the smooth and rapid success of the entire project.

In the transition to G&A outsourcing, speed and quality are achieved by reducing timelines and producing quick successes.

P A R T 1

“For me, the keys to success are speed and quality.”

In my experience working with multinational companies implementing G&A BPO, there are specific actions that can be taken to reduce the costs associated with the transition period. As you will see, the vast majority of the following tips happens during the early stages of the transition – or even before the transition begins!

I can’t say it enough; the more you plan the more you save.

Six tips for speed and quality

How to reduce the costs of the transition process

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The first solution

– aimed at transforming large entities – is typically a centralized, cross-country ERP software program customized for each individual entity. Needless to say, this solution takes time to implement but, as a result, allows for a strong standardization of processes across all countries – which in the end will reduce costs.

The second solution is aimed specifically at small countries and will encompass specific, in-country service providers with specific, in-country solutions. Unlike the first solution, this solution delivers a generic service that can be easily and quickly implemented as it has limited opportunity for customization.

1 A Flexible Enterprise Service Architecture

Your strategy should ensure that your BPO provider starts by transitioning a handful of the smallest entities in the company first. These small countries allow you to launch the transformation process immediately, with little to no need for complex program development.

In BPO, it’s all about building momentum via tangible results, and beginning with these small countries guarantees quick results. Whereas it may take 10 months to transition a large entity, a smaller one can be ‘practically completed’ (see box) within two. I find that quick wins build

momentum and deliver encouragement while laying the foundation from which the large entities can build. Even better, by transitioning smaller entities first, they begin to benefit from their “to be” cost savings earlier, which combined, can result in a significant cost reduction in the total transformation process. For me, the successes from the small countries serve as a pipeline of positive communication and awareness as the transition is being planned and eventually implemented in the larger entities. This is a real change management tool.

2 Small Countries First

Your BPO provider should offer a flexible enterprise service architecture that providesseparate solutions for large and small countries.

“BPO is all about building momentum via tangible results.”

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“Practically Completed”When your smaller entities are transformed early on, not all of their processes will be connected to the enterprise service architecture and will therefore not all be fully automated (though they will be operational).

The key here is to get most, if not all, of yoursmaller entities 80% ‘transformed’ and then all at once link them to the enterprise service architecture for a simultaneous, 100% go-live.

In order to reduce time, multiple things must happen simultaneously.

In my experience, organizations tend to make the mistake of rolling out their transition by tackling a big, pilot country first and, from there, going country-by-country, one at a time. This route is costly as it requires a significant amount of time, effort and change management support to implement major changes in a single, large, high-profile country.

Additionally, because it requires so much time and effort to complete the transition in a large country, evidence that the transition is successful and producing the desired results is non-existent. Too often I see this lack of tangible results lead to frustration among the project team, management and affected staff. Finally, the same structures needed and lessons learned for the large pilot country are rarely able to be replicated in, for example, another country where the impacted organization is much smaller. Therefore, it’s better to schedule the transition so that smaller entities are transitioned while, at the same time, preparations for the larger entities are being made.

3Simultaneous Transitioning

While your small entities are being transitioned, you need to begin preparing those operating in your larger entities for change. One simple way to standardize this process is by developing Change Management Deliverables Templates for general tasks.

Common examples of Change Management Deliverables that can be standardized and even prepared upfront include:

Pre-project Due Diligence Checklist•

Country Communications Plan •

Project Kick-Off Email and Deck•

Blueprint Questionnaire Introduction•

Blueprint Kick-Off Deck•

Manager Announcement•

Employee Announcement•

Thank You Memo•

4 Preparing for Change Upfront

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While the small countries are being deployed and the big countries are being prepped for change, your BPO provider will also be preparing the Enterprise Architecture’s Global Features.

The objective of the transformation phase is to provide the BPO transformation team with a clear understanding of how to implement BPO services in all countries. The global - or cross-country - features of the program allow this to happen. In other words, establishing the global features of the BPO transformation program allows for a seamless, across-the-board process.Common global features that should be prepared during this phase include:

Global Functionalities•

Global Data Model•

System Landscape•

Language Strategy•

Use of Templates•(including abovementioned Change Management Deliverable Templates)

6 Global Features

It might be good to look beyond the marquee •brands to secure a smaller, less costly consultant (perhaps even with a blue-chip consultancy background) to work with you. Whoever you choose should be able to provide you with the necessary communications and reporting tools for deploying change in a way that makes people feel connected and free to communicate their own suggestions, questions and concerns.

Know that your BPO provider and your Change •Consultant will need to coordinate their activities and maintain regular communication. Therefore perhaps even consider inviting your BPO provider to participate in the selection process of the consultant.

5 Change Management ExpertiseToo often I see organizations try to falsely economize during the transformation process by attempting to forego the need for change management expertise. Unfortunately,what happens down the line is that the entire transformation hits major stumbling blocks in terms of acceptance, expectations and morale because the change has been managed insufficiently or, even worse, not at all.

I don’t suggest, however, that you must contract with an expensive, blue-chip Change Management Consultancy. Instead, keep these tips in mind:

“Transition smaller entities while at the same time, preparations for the larger entities are being made.”

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See Trimming the Fat from BPO Transformation, Part II for the optimal Implementation Roadmap

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Preparing the global features will also serve as a readiness assessment of the transformation prior to implementing the change in the first wave of countries. This also serves as a risk mitigation tool, allowing you to identify potential problem areas before they become a costly and timely issue.

“Establishing the global features of the BPO transformation program allows for a seamless, across-the-board process.”

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Trimming the Fat from BPO Transformation

Patrick Nolot, Global Program Director, ADP

Add kick to your transformation

Transforming your organization to international General and Administrative (G&A) BPO is all about creating more efficient business processes. In the end, the transformation should mean reduced general and administrative operational costs. Unfortunately, the actual transition from “as is” (existing organization and processes) to “to be” (optimized organizational processes that better serve the company’s business objectives and market challenges) can be, if not handled carefully, time consuming and costly. Fortunately, with considerable upfront planning and a well-designed strategy, the transition is ripe with opportunities to not only drastically cut unnecessary costs, but to also simultaneously ensure the smooth and rapid success of the entire project.

P A R T 2

Transitioning in 24 months maximum

The transition process for multinational companies in five cost-effective waves:

Choosing a Business Process Outsourcing •provider (BPO provider)

Preparing the Transformation •

Gaining Quick Wins •

Accelerating the Roll-Out •

Fulfilling the Business Case•

The typical timeline for a large, multinational transition process can run in excess of 10 months per country. When these five waves are optimized for speed and quality, however, the timeline for the entire transformation can be reduced to a maximum of twenty four months, all countries included.

Needless to say, this reduction in time equates to additional costs savings.

Transitioning in five cost-effective waves

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BPO Program Transformation Map

Wave I2 months

Wave II6 months

Wave III4 months

Wave IV6 months

ChangeManagement

PerformanceMeasurementGlobal features

Large Countries

Small Countries

DesiredEnd-result

QuickWins

Wave2 smallCountries

integration

Wave1 smallCountries

integration

Pilot largecountry live

5+ largecountries live

10+ small countries live

All small countries live

All largecountries live

TransformationProgram

Preparation

BPO Providerselection

The first step is, of course, to select your BPO Provider. Once selected, immediately start preparing for the transformation program by also choosing a Change Management Consultant.

You start to map the program’s global features, and the BPO provider and Change Management Consultant prepare the transformation roadmap for the first big country.

The Transformation Roadmap

Wave 0: Select BPO Provider

Wave I: Prepare the Transformation

Total Time: Two Months

Here, your transformation starts to collect quick-win results as you implement BPO processes in the smaller countries and implement the transformation in your first pilot big country.

Wave II: Gain Quick Wins

Total Time: Six Months

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It’s time to go big. In Wave III, while continuing to transform your small entities and as successes emerge from your large pilot country, begin launching the transformation in additional large countries on a rolling basis. By the end of this Wave, you should have all small countries live.

Wave III: Accelerate the Roll-Out

Total Time: Four Months

By the conclusion of Wave IV, your small countries can be simultaneously integrated into the enterprise service architecture, along with the rest of your big countries.

Wave IV: Full-fill the Business Case

Total Time: Six Months

Here, all your countries arelive and running, and you have reached your desired end result: optimized organizational processes that better serve the company’s business objectives and market challenges.

Desired End Result

Total Time for Transformation: Twenty Four Months

Wrap-Up

The key to an efficient transition to G&A BPO is a well-planned strategy that reduces •timelines and produces quick results.

Select a BPO provider who offers a scalable enterprise service architecture that can accommodate •both large- and small-country operations. The successes gained from the small countries will motivate the process in the big countries.

Starting with small countries and a pilot large country allows you to immediately launch •the transformation process with little to no need for complex program development.

Don’t run your transition country-by-country. It’s better to schedule the transition so smaller •entities are transitioned while, at the same time, preparations for the larger entities are being made.

Take the time to prepare your large organizations for change upfront. Anticipate and prepare •for standardizations before the implementation process begins.

Establishing global features for the entire transformation program allows for a seamless •process companywide.

When choosing a Change Management Consultant, look beyond the marquee brands •and secure a smaller, less costly consultant who can provide the necessary communications and reporting tools for deploying change in a way that makes people feel connected and free to communicate their own suggestions, questions and concerns.

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