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The Impact of Technology on Cost in Business Process Outsourcing

Although IT has a significant impact on reducing cost, it is also a key cost component in the price of business process outsourcing services. This white paper discusses the impact of software on outsourced solutions and helps buyers gain a clear understanding of how their decisions impact the cost of services.

The paper first examines a typical BPO provider’s cost structure. It provides a clear picture of the cost impacts from such aspects as the following:

• How customization impacts the price of services and time for implementation
• The impact of technology and sustainability of savings -- why technology savings are typically not enough to justify the business case for a multi-year outsourcing agreement
• The impact of not improving retained technology and processes that are adjacent to the outsourced process

The paper discusses the importance of buyers and providers sharing the responsibility for the cost structure since part of the process cost is generated by the retained organization and not factored into the contract. It also presents information about surprise or overlooked costs associated with governance and explains the significant impacts and ripple effects of not budgeting for these “hidden” costs.

Buyers considering BPO as a strategic option should carefully consider the complete cost picture before embarking on the journey. This white paper presents valuable insights into understand and assessing the total cost picture.

Download the free whitepaper by SAP by clicking here.

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