February 28, 2012

Behaviors and Practices Must Change for Companies to Achieve Full Business Value of Business Process Outsourcing, Accenture Study Finds

Data shows only 20-percent of engagements are delivering sufficient business value to be classified as “high performance” BPO

NEW YORK; Feb. 28, 2012 – The full business value available from business process outsourcing (BPO) today is being realized on a relatively limited scale due to deficient management behaviors and practices, a new report from Accenture shows.

The BPO Research study is based on a survey1 of 263 buyers of a range of BPO services such as finance & accounting, procurement, human resources and supply chain. The report shows a relatively small number of BPO buyers – 20-percent of those participating in the study – have succeeded in extracting greater business value from their BPO relationships than the majority and can be classified as “high performers.” The report also validates eight best-in-class practices that are strongly correlated with high performing engagements. By adopting these practices, buyers can realize greater business value than “typical” BPO engagements deliver.

The study shows that high performers in BPO exhibit eight core management behaviors and practices including:

“This study clearly shows that the industry mindset needs to change for organizations to capture the full business value of BPO, where engagements are measured by business outcomes and improving clients’ business performance rather than just cost reduction,” said Mike Salvino, group chief executive, BPO, at Accenture. “The results indicate that BPO arrangements deliver greater business value when the client and provider engage in deeper relationships and leverage practices that drive high-performance BPO. Those who are able to bring these elements to their relationships will be well-placed to succeed – and those that continue to view BPO purely in terms of transactional processing and cost will be competitively challenged.”

The research also found there are statistically significant differences in the performance and behavior of high performing and typical BPO relationships. Some of the widest statistical differences were in areas focusing on mindsets and attitudes, or on the execution of “soft” programs such as organizational alignment and collaboration or change management.

Survey results indicate that a collaborative, approach toward governance is important to create high performing BPO relationships. In collaborative arrangements, clients consider their BPO provider to be a strategic partner, and senior leaders from both sides commit their time to the relationship. A broader stakeholder alignment and involvement of senior leaders mean that high performing engagements are better able to productively resolve their conflicts than normal engagements. Findings showed:

Other key behaviors that showed significant differences in results include:

Making change management a priority.

Focusing on benefits beyond cost reduction

Targeting strategic business outcomes

Salvino said, “By adopting the behaviors and practices associated with high performance BPO, organizations can capture significantly greater business value and build new competitive strengths, ranging from accelerated speed to market, enhanced innovativeness and stronger customer loyalty to savvier talent management, and top-line growth.”

1Respondents were evaluated on a pre-determined set of BPO value indicators to classify their BPO engagements as high performing or typical, as well as on particular behaviors and practices

About the Research

In September and October 2011, Accenture, in conjunction with Everest Group, conducted an online survey of 263 qualified respondents at senior or C-level roles representing buyer organizations with revenues over US$500 million across a wide range of industries.

All respondents had strong involvement in managing their BPO initiatives across many BPO segments including finance & accounting (F&A), procurement, supply chain, human resources, contact center, analytics and marketing operations. Respondents represented a cross-section of industry sectors including banking, financial services and insurance; electronics and high-tech; life sciences; consumer packaged goods and energy & utilities.

As part of the overall study, The Outsourcing Unit at The London School of Economics also conducted more than 20 in-depth interviews with Accenture clients who qualified as high performers to demonstrate how they apply the high performance behaviors and management practices. Combined with its research database of more than 1,300 outsourcing client case findings from more than 250 academic analyses, the Outsourcing Unit at the LSE has further validated the research results and is developing case studies and “practice” papers illustrating how these practices and behaviors work in live BPO engagements.

To access the “Achieving High Performance in BPO” research report, visit www.accenture.com/highperformancebpo .

Or view the high performance BPO Infographic.

About Accenture

Accenture is a global management consulting, technology services and outsourcing company with over 244,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$25.5 billion for the fiscal year ended Aug. 31, 2011. Its home page is www.accenture.com.

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Jim Finlaw


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