Research company Gartner defines cloud computing as “a style of computing where scalable and elastic IT-enabled capabilities are provided ‘as a service’ to external customers using Internet technologies.”
Cloud computing also offers outsourcers greater flexibility in delivering complex solutions and the ability to ramp up capacity quickly. Large organisations may have sufficient resources internally to accommodate routine business requirements. But should a need arise to quickly ramp up a business unit or product line, cloud offers a very cost effective means to do so.
Management is constantly looking to take layers of cost out of its operating structure and Cloud – combined in an outsourcing context – can provide that for many companies willing to embrace it.
The challenge today is whether a BPO provider is adding value beyond low-cost processing services. If your sales pitch is labour arbitrage then someone is going to come along with a cheaper scheme and so on. It’s a spiral of doom with no winners as margins become so thin that it becomes impossible to survive let alone offer a service.
Buyers are also looking for flexibility where they can use outsourcing service on a turn on turn off basis. Typically this is counter intuitive to BPO vendors, but they will have to get used to it as old business models are becoming redundant.
It’s about integrated business services where the provider delivers the hosting, the application skills and the business services needed to help clients achieve specific business outcomes.
A primary appeal is that it eliminates buyers’ up-front costs and decreases their total cost of ownership. This is especially compelling in the current financial operating environment.
