Is BPaaS just BPO emerging from behind the Cloud?

Business Process as a Service (BPaaS)

BPaaS is Business Processing Outsourcing run as a Cloud service.

For example, human resources as a service.

“Cloud Business Process Services / Business Process as a Service (BPaaS)

Gartner is predicting that BPaaS will grow from $84.1B in 2012 to $144.7B in 2016, generating a global compound annual growth rate of 15%.

Of the eight subsegments Gartner is tracking in their BPaaS forecast, Cloud Payments (17.8%) Cloud Advertising (17.1%) and Industry Operations (15.1%) are expected to have the greatest compound annual growth rates (CAGR) in revenues generated by 2016.

In terms of revenue generated, Cloud Advertising is projected to grow from  $43.1B in 2011 to $95B in 2016, generating 17.1% CAGR in revenue growth through 2016.

Cloud Payments are forecast to grow from $4.7B in 2011  to $10.6B in 2016, generating a CAGR of 17.8% worldwide.

E-Commerce Enablement using BPaaS-based platforms is expected to grow from $4.7B in 2011 to $9B in 2016, generating a 13.6% CAGR in revenue globally”.

Example Wipro BPaaS solutions:

HR BPaaS: Wipro’s HR BPaaS is an efficient, replicable and repeatable HRO solution, leveraging industry-leading cloud technologies, back office operations support and value-added services in an integrated, streamlined fashion to deliver high-quality HR services. Built on the Workday platform, the solution includes HR Process Consulting & change management consulting for effective HR Transformation.

Procurement BPaaS: Wipro’s S2P (Source to Pay) BPaaS solution is an end to end Business Process as a Service platform which provides customers complete control over their spend and also improved supplier relationship management.

Wipro S2P BPaaS solution is built on a combination of industry leading SaaS solutions by leveraging best in class platforms across spend analysis, eSourcing, Contract Management, Procurement, Accounts Payable, Business Analytics reporting and SRM.

ADP Employease— An Online business process services for HR,

Employee Rewards and Recognition Platform.

A structured web based rewards and recognition program for medium to large organisations looking for a centralised and easy to manage employee recognition program across multiple locations.

Cloud confuses BPO

Analyst firm Ovum says suppliers are turning off customers by mixing BPO with BPaaS.

Vendors risk turning off potential customers by over complicating their business-process-as-a-service (BPaaS) offerings, a leading technology analyst company has warned.

The global analyst firm Ovum today releases its new report: ‘The Evolution of Business Process Outsourcing: from Platform BPO to BPaaS – Balancing industrialisation and business complexities’.

Business process outsourcing (BPO) refers to the contracting of key operational activities to third parties, whether those are supporting activities such as HR, finance or facilities management or primary line-of-business activities such as manufacture.

Business-process-as-a-service (BPaaS) represents the next stage of evolution – having the work outsourced and managed in a cloud environment.

However, Ovum states that suppliers are over complicating the issue of BPO by focussing too much on the impact of cloud. This is blurring the distinction between value propositions the different services that are on offer. Ultimately, the confusion causes many prospective customers to disengage from the entire area.

Ovum says its sees BPaaS as an evolution of software-as-a-service – where applications are delivered through remote hosting, rather than from an on-premise server – instead of being an evolution of BPO.

Thomas Reuner, principal analyst of IT Services at Ovum and author of the new report, said: “In the narrower context of BPO, Ovum believes that BPaaS is more a future vision that is not yet resonating with buying organisations. Most marketing messages are reminiscent of the early hype around cloud services.”

Overall, it is the end result that customers are seeking, rather than the technology that allows it to happen. Reuner warned suppliers that they must not lose sight of the fact that many companies will be looking at facilitating a closer knit group of suppliers that they work for, in the interests of management efficiency, by seeking new BPO contracts. Here too, cloud could present problems.

He said: “Despite being highly standardised offerings, cloud services (and so BPaaS) will lead to more complexity for buying organisations as cloud standards have still to emerge. This will require new sets of governance skills to make this a reality.

“The push toward platforms is increasingly accompanied by bundling of infrastructure components as part of the BPO contract. Consequently the boundaries between IT outsourcing and BPO are becoming blurred.”

Morgan Yeates @ Gartner  – “Traditional HR outsourcing services are gradually being replaced by cloud-based business process as a service, which offers higher-quality services at lower costs to existing and entirely new markets”.

With BPaaS offerings buyers purchase outcomes delivered by tried and tested “best practice” business processes, ranging from general business activities to more industry specific solutions, such as HR, Procurement and Advertising etc.

The projected growth of Advertising delivered via the Cloud Service Model, as per the Google AdSense example, is relevant however other market segments like HR, S2P may require a degree of tailoring and configuration of information assests that may not fit the BPaaS cookie cutter delivery method.

BPaaS is not just about offerings for mid to large organisations it is all about providing solutions to the needs of individual buyers.

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