What' s To Come After Saas?...OaaS will be the next evolution for the Outsourcing/BPO industry

It is the story-line every business needs to follow in order to stay relevant.

It needs to improve and enhance it offering in order to stay competitive. If company "A" fails to do so it can be sure that company "B" will..thus outflanking and outperforming the business. Business is after all survival of the fittest.

The outsourcing industry is no different. Starting from very humble beginnings, operating mainly call centers, it quickly evolved into taking over administrative tasks. What were simple processes at first became more and more complex over the years. At one point entire business processes were outsourced..and the BPO industry was formally recognized.

The question and issue faced by many organizations is what is next?

The clients of BPO companies are always looking for another avenue to reduce costs further. The BPO companies, attempting to safeguard and increase existing revenue are trying to capture a bigger slice of the pie.

One avenue pursued by companies and their BPO partners is OaaS. (Operations as a Service).

Oaas in its simplest form is the outsourcing of entire departments. It is not limited to simple process but it is considered all encompassing. Often times significant business decisions are taken by the outsourcer, in accordance with the Master Service Agreement.

An example would be to have the entire procurement and related accounting and payment outsourced to a BPO provider. The BPO provider might have been involved in the process before. But rather than being limited to one or two processes which are  parts of the puzzle it now is made responsible for all aspects of procurement.

Certain aspects of the business might have been operated in the form of SaaS. By taking over the entire operations area related to the SaaS solution the company effectively combines a SaaS solution with the operation of the solution into what is termed an  OaaS solution.

A good way to think of it is to outsource a business division as opposed to outsourcing a department.

There is an obvious challenge to outsource entire business divisions. Any company deciding to go that route is effectively reorganizing the company..similar to a corporate reorganization.

The concept can be as limited or as all encompassing as a company wishes. As such the associated challenges can be managed in accordance with the scope of the project.

At the end of the day it really comes down to what the company believes should be its core competency.

If management beliefs that anything outside of its core line of business is open for an OaaS solution...then the process can be rather disruptive and transformative.

It might not be for every company but for those companies trying to reduce expenses even further and improving efficiency while doing so  OaaS might be the only option to do so in a substantial manner.

Strange News...Watson is now in the business of composing music

Watson is well known for a few things by now. IBM's Artificial Intelligence engine now supports almost 50 different fields developers can write to as part of the Watson developer cloud.

The latest offering though is certainly not a mainstream endeavor..or so it seems. Watson is now in the business to compose music...and is showing remarkable success at it. (based upon the available tracks)

Music is in its most basic form, a few people will argue, mathematics. The relation of notes to each other equal a formula which might be more successful or less successful in the market. (based upon number of tracks sold)

In theory it should be possible to upload a number of popular songs, let Watson digest and analyze the melodies and have it produce a derivative of the prior uploaded songs.

It seems a bit far fetched of course...but song writers for the first time ever might have a competitor outside of their peers.

Article can be found here

Here Are The 5 Reasons Why Every CEO Should Consider Outsourcing IT As A Business Strategy...

When outsourcing and IT are mentioned in the same sentence a lot of people are thinking about job losses and the disruption it will cause to the company. Sometimes this is the case. More often though outsourcing augments an existing business strategy without disrupting existing work processes.

Outsourcing IT has become a business strategy to improve overall operational efficiency, helping companies to realize their Key Performance Indicators (KPIs).

Some of the specific reasons why a company should consider making outsourcing part of  their overall business strategy are below:

Reason # 1:

For years now the role of the IT manager has become more all encompassing.  IT strategy has become a core concept to drive and maintain revenues and the competitive position of the business.

Today's IT managers have seen additional requirement layered upon them. Besides the traditional workload IT managers now have  to address requirements in areas like cloud implementation, integrating legacy systems, hybrid cloud strategy and  operational audits. On top of that businesses now look to IT management for valuable input as to business strategy development.

Another important responsibility IT managers have to deal with nowadays is Digital/Cyber crime which alone can chew up the daily workload of any seasoned IT professional.

With all of these new requirements layered upon IT management it is no wonder that a lot of IT professionals are overburdened.

Outsourcing part of the responsibilities to professionals with significant experience in any of those areas can relive the existing IT management and help the business to hit its internal Key Performance Indicators. (KPIs)

Reason # 2

Outsourcing allows management to augment their existing IT team. Delegating lower level or repetitive tasks to an outsourcing team will relieve the internal team, thus allowing it to focus on higher level development and tasks.
If done right it will boost the In House morale of the IT team since they will feel relief is on the way without having to worry about job security.

The concept of augmentation enables the company to maintain a core team with core competency whiles scaling up (or down) resources as needed.

Reason # 3

One of the more intriguing aspects of outsourcing is the easy access to a wider talent pool.

When a company decides to adapt a new technology platform which is not part of the skill set of the existing IT team outsourcing is often time the ideal solution.

The talent is available at a lower price point and can be scaled up or down as needed.  As such the investment into new technologies can be minimized without sacrificing performance.

Reason # 4

The organization will become more nimble and address changing market needs much faster.

Every company faces the problem of being stuck in their ways. This is not limited to just IT heavy organizations but the problem is perhaps more difficult to address for them.  Retraining existing personnel to use newer technologies is in almost every case prohibitively expensive or simply not practical.

Because of the high hurdle companies are forced too maintain existing older technologies much longer than is good for them.

Having a nimble outsourced IT organization at your disposal can break this cycle. Compabies can create a two speed IT lane where innovation is driven at different pace.

Reason # 5

It goes without saying,  outsourcing done right will also save money. It should not be the reason why a comp nay considers outsourcing as a business strategy  it but it certainly is a benefit a lot of companies like to realize.

Every company has a unique situation it needs to evaluate in order to decide if outsourcing enhances the corporate strategy.

I vouch to say that it should always be added to the mix. It is a tool which should always be at the disposal of the CEO/CIO. Even if the strategy is used on a very small scale, perhaps as an experiment, it will educate the C level as to what is possible.

Even a very limited outsourcing approach  will prepare  the company for the moment outsourcing becomes a part of the corporate strategy.

You Think The US Is Alone In This?...Think Again....Even China Faces Outsourcing

The concept to outsource production to a lower cost environment is well understood  by the industrialized world.

One can argue that the US practically invented the practice starting in the early 1960'ies  when  US corporations started shifting production to Japan. Nowadays no one considers Japan a low cost provider but  50 to 60  years ago it certainly was.

Of course what happened next was a lesson in beware what you wish for, The manufacturing techniques Japan learned from their US paymasters enabled Japanese corporations to develop world class manufacturing processes and the Japanese corporations then started competing globally for the same customers as did the US corporations.

Japan of course learned its lesson too well. Japanese corporations ran into the same cost wall which had forced US corporations to outsource production and started shifting production to South Korea and Taiwan. In the process world class electronic component manufacturing was born in those countries.

Now it is China's turn. The article below makes the case that the same forces  China has benefited form , the outsourcing of jobs into China, is now forcing Chinese corporations to outsource production to lower cost countries. (Vietnam).

One cannot help but to think "What goes around comes Around".