Douglas, Plotkin.

• Author: Madden, Jim
• Position: Manage Your Assets - Brief Article

Douglas, Plotkin

Director, META Group Consulting

Business Process Outsourcing is ill-defined and using it successfully requires that the user understands its two separate types. Successful BPO, like any outsourcing, lies in the ability to measure and benchmark what you purchase.

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There are two basic tracks in BPO: 1) the more successful processing type, where the items outsourced are static and repeatable, like payroll and check processing and can be "counted"; 2) the more difficult to enable FTE type (similar to Applications Maintenance outsourcing) which usually, and unfortunately, counts the people who perform the work (e.g., HR and F & A). Since change is inevitable in outsourcing (the environment is dynamic), the contract--and its price--must accommodate that change. Counting, and charging for, additional check processing is easy (the user asks the vendor to process more checks and pays for the extra service). But...