Operations: Outsourcing

Outsourcing your non-core processes to the experts can save your business time and money, freeing up your resources to focus on what you do best. Becky Done talks to Danila Meirlaen, VP for Business Process Outsourcing, HP Enterprise Services EMEA, to find out what’s involved.





In times gone by, the popular perception of business process outsourcing was that its primary goal was to cut costs. But as globalisation continues apace and technology evolves, it is becoming evident that business process outsourcing can offer far more than a boost to the bottom line.

Cost cutting undoubtedly remains an important part of the equation, but it is increasingly occurring as a natural outcome of the changes being made, rather than being the end goal. “I think initially the industry was very focused on cost savings,” says Danila Meirlaen, VP for Business Process Outsourcing, HP Enterprise Services EMEA. “And the discussion is obviously still around how much you can save; but for the client, business process outsourcing is now far more about how you can impact their end-to-end services, how you can impact their client satisfaction and how you can help them improve their client loyalty. The focus is not right away on the bottom line figure, it’s far more the end-to-end picture.

“I guess as a population we have become far smarter as well,” she continues. “Clients are becoming more open to the fact that they don’t have to own it all—they don’t have to own the technology and the infrastructure and the people. It’s a journey that we go on with the client.”

So what does that journey encompass? “Obviously we attempt to deliver cost savings,” says Meirlaen. “That is, our clients avoiding having to come up with upfront investment. We have plenty of clients whose non-core processes we have taken over where they avoid having to make any investment from a technology or platform point of view. Second, it is also our goal to help them grow their revenue—a welcome thing in today’s economy. And the third part of the puzzle is customer intimacy—so, not only trying to retain but also gain and increase customer loyalty.”

But inviting another company to come in and manage areas of your organisation is a bold step, one that naturally carries a degree of risk—get it wrong, and the damage to your business could be catastrophic. The business process outsourcing concept therefore understandably attracts some fears. “The most common fear when we start talking to our clients is their assumption that they could lose control, which is obviously not the case,” says Meirlaen. “Under no circumstance would we ever want to question or challenge our customers’ intelligence. I always tell them: ‘you know your business far better than we do and than we ever will.’ However, what we do take pride in is that we have end-to-end, industry-specific solutions that can meet the needs of large volume and complex transaction-driven organisations, and as a result of that we can combine our domain specific experience with the client’s experience and know-how.

“But it is very much a hand-in-hand operation,” she continues. “It’s not like we take the processes and it’s a done deal—no, because their business evolves and their processes change. So it’s very much a day-to-day relationship with the client where we have different people talking to each other on a daily basis to ensure that we stay abreast of any changes—whether legal, regulatory...they can be very different in nature, obviously.”

For organisations in certain industries, outsourcing risk management is an effective way of ensuring they are operating at the optimum level of security and compliance, among other things. “If we start to look here in Europe and the financial services industry, there’s obviously a lot of pressure on those organisations as a result of what has happened [that is, the global economic crisis],” suggests Meirlaen. “So our innovation and our ability to offer a secure environment and regulatory operations is key. Our risk management is key. The regulatory demands are extremely complex if you look at, for example, the back office operation of a bank out of different parts of the world—but we’ve got that economy of scale.”

Economies of scale are clearly what come with being an organisation the size of HP with a global reach to match; and the company is able to offer its clients a wide choice of locations for outsourced operations. “We have the ability to move work to a location where we can provide the services at a lower cost—Poland for example, where we have a large site,” explains Meirlaen. “We have other clients where we provide services from Kuala Lumpur or Shanghai—there are different locations, obviously, because of the language requirements.”

For clients who feel more comfortable if their operations are kept nearby, HP may choose a closer site before working with the client to move them further afield. “Sometimes it’s a journey we need to take them on,” she says. “We will suggest a shore near to the client in Europe and then take it from there.”

HP’s approach to business process outsourcing tends to suit large-volume, transaction-driven organisations, simply because of the expertise and experience that can be applied to the outsourcing process—HP operates in 16 countries and has more than 300 clients around the world. “It allows us to combine our domain-specific experience with our global multilingual scale and our reach,” Meirlaen says.

And according to Meirlaen, such experience is worth its weight in gold. “We have renewed contracts with clients that we have been in business with for a longer time than some of our competition have been in business process outsourcing,” she reveals. “That says it all, doesn’t it?” www.hp.com