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The future of BPO includes business rules

David Margulius wrote a nice piece on BPO in InfoWorld recently - The great business process handoff.  I have blogged a couple of times about the value of business rules when considering business process outsourcing but a couple of comments in this article caught my eye especially:

Will BPO vendors eventually look like ASPs, offering open interfaces and process transparency? Or will they look like black boxes providing only limited inputs and outputs? Can BPO vendors actually deliver innovation and optimize outsourced processes, or will they just run existing processes at a lower cost?

Me I think BPO vendors will have to use business rules to expose the key decision-points within their processes whether or not they provide transparency in a more general case. Companies simply have their own way of doing business and even in a standard process there will be variation in decision-making that needs to be imposed by the client on the outsourcer. The use of business rules management systems like Blaze Advisor would allow the outsourcer to expose these decisions to each of their clients while still running a standard, and black-box, process.

BPO Best Practices included choose a vendor that's leveraging technology effectively and ask for visibility into your vendor's processes and platforms

Visibility into the process may well mean visibility as to how certain decisions (to refer to collections, pay a claim etc) are made and this is much easier if that part of the process uses a business rules management system to automate that decision.

"BPO is all about economies of scale and reuse,” says Rearden Commerce’s Grady, making the case for a loosely coupled, Web services-based, 100-percent-hosted BPO delivery architecture. BPO customers, he notes, may have “thousands of permutations of applications, unique business processes, and custom integrations across scores of apps. … If all you’re doing is migrating that hairball into your datacenter, someone will pay the piper.”

All true. However if the vendor wants to provide a single set of processes and process options to multiple clients then they are going to have to let each client set the rules for decisions within those processes differently and that will be much easier if some of the services are rules-based and expose the rules to the clients for them to manage directly.

For some regulated processes, customers may legally be required to know the inner workings of a BPO vendor’s system. “One of the challenges,” says UPS’s Long, “is being able to prove that we have processes and supporting technology that can meet or exceed our customers’ auditors’ internal-control requirements.”

In many ways this is the critical issue that pushes my argument over the edge. Business rules are ideally suited for showing that a decision has been made in a compliant way - so much so that I blog on compliance a fair bit - and if you will be audited on what you did and why you did it then you had better make sure your outsourcer is using business rules.

BPO will simply go better if the vendors use business rules to let their clients have visibility and control and if those considering outsourcing ask for this kind of capability.

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» Is IT-Business/Domain Knowledge [While Offshoring] overrated? ... Continued from Managing Offshore IT
Now, let us switch gears and extrapolate this as an offshoring scenario. Following thoughts/queries come to mind, based on the comments my earlier post generated: a) The focus of the IT folks was on re-engineering the ‘system’ (UI, Databases, middlewar... [Read More]


Govind Agrawal

What is BPO?
what is the difference between a BPO and Call Center?

James Taylor

The definition of Business Process Outsourcing (BPO) is the outsourcing of business functions or processes, such as procurement, to a third party. In these contracts the provider is responsible for performing and managing the outsourced process on behalf of the customer. BPO contracts must involve the provider taking overall responsibility for the business process and not just supplying IT applications. Clearly a call center or customer service process is one option but not the only one. Equally, a call center might be outsourced but might be run in-house also.
There's more at

Live Order Taking

Thats fair for Call Center and BPO... What about KPO and SPO. Dont know what do they even stand for?? Thanks.

James Taylor

Interesting comment on KPO and SPO.
KPO - Knowledge Process Outsourcing - and SPO - Software Product Outsourcing - do not seem to me as amenable to the use of EDM as they are not really about high-volume operational decisions. which is where EDM shines. I think that some aspects of KPO, such as data mining, might be more effective if the company buying the KPO service was using EDM as it would have a better framework for taking advantage of that work.

Call Center India

Hey james. Might be a daft question but how do you think I should effectively conduct data mining in my organisation which is running EDM framework. Would it be better to outsource the operations if I am not too sure about the process. TY.


I feel companies would come up with catering multiple area of expertise where Business Process Outsourcing is concerned.

But it all depends upon the outsourcing trends which leads to pros and cons of have a compressed area of service than a huge bunch of services.

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