Andrew Craig

Robotic process automation: strategic transformation lever for global business services?

The case presents a series of dilemmas facing senior executives thinking through the potential application of robotic process automation (RPA) into a human resource (HR) function and global business service (GBS) operations. The executives are pointed to successful RPA implementation by business process service provider Xchanging, operating in the back office of the London insurance market. The teaching case focuses on what can be learned from that experience, and how their own RPA use may differ in HR and GBS contexts. The teaching case requires important decisions to be made about the business case for RPA and cognitive automation, the type of automation to be deployed, how to implement effectively in HR and GBS contexts, and whether to use RPA tactically or strategically, and if the latter, the implications of this decision. Students and practitioners will gain insight into the service automation landscape, RPA risks, challenges, and effective deployment, and will lean how to plan for (a) service automation strategy and building a mature automation capability, (b) mitigate the risks, and (c) progress launch, change management and detailed implementation in multiple business contexts.

Collaborating to innovate: The next phase

Our research has been tracking the evolution of the outsourcing market since its modern beginnings in 1989 with the seminal Eastman Kodak deal in the US. Our four previous chapters provide the foundational lessons and practices that make for effective sourcing strategy and delivery. This chapter asks: what next?

Country Attractiveness: International Comparisons

Which countries compete with South Africa as an offshore BPO location? In 2012 we surveyed and interviewed 30 senior global sourcing analysts working in client, provider, management consultancy, market analysis, and research organizations. We updated the analysis with ten of these analysts in 2013 and 2014. These analysts were carefully selected as (1) being highly experienced and knowledgeable professionals in the global sourcing field and (2) having specific expert knowledge about South Africa and its competitors. Nine other countries emerged as major competitors to South Africa’s specific markets. Our respondents discounted Central and Latin American locations as having a different market focus and skills bases. Likewise they discounted most South East Asian locations but not India, Malaysia, or Sri Lanka. In Western, Central, and Eastern Europe, they selected only Northern Ireland and Poland as immediate competitors. The nine countries considered, therefore, were India, the Philippines, Poland, Morocco, Malaysia, Kenya, Sri Lanka, Egypt, and Northern Ireland.

South Africa BPO: Performance and Prospects 2011–18

The accumulating interest in the South African BPO market has sparked a number of reports. Many were written in the 2011–12 period, and we summarise their main findings here, as they establish a foundation for understanding South Africa’s positioning and development. Our own research builds on and extends the findings both in detail and over time to cover the 2011–18 period. Through longitudinal case studies of major captive and offshore outsourcing arrangements, and interviewing major client, provider, and analyst players between 2012 and 2014, we are able to produce a detailed assessment of South Africa’s BPO performance in this period, and South Africa’s BPO potential up to 2018. Our research in 2012 produced seven distinctive findings, which we report here. We continued to research South Africa BPO across 2013 and 2014, discovering four major findings detailed here that establish the potential inherent in South Africa BPO for the 2015–18 period.

Cases Three and Four: Launch Pads and Landing Strips — Full Circle Navigates Two Newcomers to South Africa’s BPO Industry

The South African-based BPO service provider,Full Circle has helped international businesses like Amazon and Capita build service delivery capabilities in South Africa. Full Circle, as an independent, then later as part of the Capita group, has served as a “landing strip” for international businesses through its “Model Office.” The Model Office is a facility that allows clients to experience customer service delivery from South Africa for a trial period prior to making any long-term investment or commitment with regard to location or specific operating model. For this “Model Office” concept, Full Circle won two industry awards for innovation from BPeSA.

Case Two: From Down Under to Over Yonder — iiNet and Merchants

In this second case study, we examine an Australian-based Internet Service Provider (ISP), iiNet, that partnered with Merchants in 2008 to build customer service delivery capabilities in South Africa. iiNet selected South Africa as a destination because it complemented iiNet’s domestic call centers by providing more time-zone coverage. It also found South Africa to have reasonable costs, high cultural affinity, and a motivated workforce. iiNet selected Merchants as its outsourcing partner because of Merchants’ flexibility and willingness to recreate iiNet’s entire call centre culture in Cape Town. By mid-2014, iiNet’s Cape Town facility had 700-plus seats and performed as well as iiNet’s domestic call centres. It was looking to grow as iiNet’s business grew, including into new areas and modes of service.1

Case One: British Gas Selects WNS South Africa for Call Centre Services

In this first case study, we examine a BPO relationship that was by 2015 some three years old, but even after one year it was performing so well that the scope of the services had been expanded twice already.1 British Gas selected WNS South Africa (formerly Fusion Outsourcing Services)2 in December 2011 to handle incoming customer calls. We trace British Gas’s offshoring journey and how it arrived at the destination of Cape Town, South Africa. Like all outsourcing arrangements, the positive outcomes of this case resulted from strong client and provider capabilities, good governance, and transparency We begin with a contextual background on British Gas.

Lessons and Conclusions

For clients considering South Africa as a destination for outsourcing or for establishing a captive centre, 13 lessons arise from our combined studies. We illustrate these lessons with examples drawn primarily from the seven case studies in Chapters 5 through 11 of this book.1 In Table 12.1 we illustrate only the cases where we found compelling evidence of each lesson/practice successfully applied. Here is a summary, before we look at the lessons in detail.

South Africa BPO Case Studies: An Overview

Entering into 2015, South Africa had become one of the world’s upcoming business process outsourcing (BPO) offshore destinations. Major companies like BP, Lufthansa, Amazon, ASDA, and Shell set up captive centres. Providers like Capita, Serco, and WNS have acquired, or partnered with, local companies to steer their client work to South Africa’s advantageous offering, and new outsourcing deals have been struck — for example, Shop Direct-Serco-Teleperformance, O2-Capita South Africa, and iiNet-Merchants. Much of this occurred in the 2012–14 period. Accelerating growth has seen South Africa become a “go-to” destination.

Case Seven: The Value of South Africa’s Shared Service Centres

According to Accenture,1 the definition of shared services is “the consolidation of support functions (such as human resources, finance, information technology, and procurement) from several departments into a standalone organizational entity whose only mission is to provide services as efficiently and effectively as possible.” Shared services is hardly a new practice as General Electric — recognized as the first leader of shared services — implemented shared financial and accounting services in 1984. Digital Equipment Corporation (DEC) created shared financial services in 1985.2 The recent downturn in the world economy has intensified the pressures for organizations to reduce costs, shed headcount, and do more and more with fewer resources.3 Shared services are seen as a powerful practice for relieving these pressures. Plus, shared services offer the promise of lower costs, tighter controls, improved service levels, and scalability.4