BPO and Beyond: Moving From Procurement Business Applications to Business Platforms (Part 1)

Last week, when I was trying to log onto HfS' website and then emailed to say that they had a server issues, HfS' Chief Jockey Phil Fersht accused me of trying to "steal his &#it"). Of course, this was precisely my intent, what with the excellent quality material HfS puts out on the BPO (and software) market. One areas HfS has done quite well of late (that we're keen to plagiarize) is their coverage of the BPO platform market. In a recent research brief, What Are Business Platforms and Why Do They Represent the Future of Outsourcing (registration required), HfS Research outlines the basics of business platform and their applicability (broadly speaking) to BPO. In HfS' words, "Business Platforms are the future of business process outsourcing and represent the true fusion of the benefits provided by standardized business processes, cloud computing, and SaaS in a singular managed service delivery model." But what the heck are platforms, and what do they mean to technology deployments -- P2P, sourcing, contract management and beyond -- in general?

In Spend Matters' view, true technology platforms (e.g., Rearden, Tradeshift, Intenda, etc.) are designed from the ground-up to enable web services (including third-party applications as well as third-party data) to be consumed by the end-user (or system) whenever and wherever they want to consume it. Moreover, platforms allow users to easily separate out different layers of the stack (e.g., one can apply a new search UI on top of an ERP eProcurement interface which was previously cumbersome to use.) Platforms also create ecosystems of self-sustaining value for their owners and others by encouraging the proliferation and development of often low-cost or free applications and ecosystems that either sit on top of the platform system or interface freely with it. Platforms can also enable users to strip and swap various features and components. One example: Don't like a UI? Change it.

Yet in the BPO space, HfS defines business platforms (not to be confused with technology platforms) as something slightly different. In their words, "Business Platforms are the fusion of cloud computing, SaaS, and BPO innovations in an integrated singular managed service." They argue business platforms have four key characteristics: "1. Business Platforms deliver standardized business processes; 2. Business Platform owners (services providers, not buyers) manage the business processes associated with the Business Platform and furnish the complete solution, including the people that operate them, the underlying software platform, and the infrastructure; 3. Business Platforms focus on business outputs or outcomes such as improved working capital and higher customer loyalty, not inputs such as labor and physical assets; 4. Business Platforms service more than one client."

Here at Spend Matters, we'll expand this definition a bit and drill down on what it means for procurement BPO specifically in the next post in this series. But in the meantime, kudos to the excellent research firm HfS for their work in this area, and yes, letting us steal their &#it. Or at least inspire us to create our own.

- Jason Busch