The Big Switch: From BPO To BPaaS

‘The World Is Flat’ by Thomas Friedman and ‘The Big Switch’ by Nicholas Carr are two bestsellers that deal with the globalisation of labour (Friedman) and the emergence of a global compute grid (Carr). Both phenomena are essentially driven by the Internet and computer revolution. Both phenomena are also having a profound effect on the way we run Enterprise IT.

On the workforce front, corporations are leveraging a globally available pool of external IT labour. This enables them to gain access to specialist skills and resources and focus on their core business. Rather than deploy people, project, infrastructure management, services and processes in-house, they are using contract labour, outtasking, managed services, outsourcing and BPO models to realize cost benefits and reduce time-to-market (see Figure below).

Computing Deployment Models

On the IT infrastructure front, enterprises are slowly adopting deployment options that are delivering more elasticity and are prepared to give up control to gain agility. Rather than install the complete compute stack (data centers, computers, software, etc.) on-premise, enterprises have embraced co-location and hosting and demand for IaaS, PaaS, SaaS and BPaaS solutions is growing (see Figure above).

Both operational and infrastructure deployment are moving from dedicated (in-house and on-premise) to shared (BPO and BPaaS) models, essentially trading control for elasticity. BPO is about outsourcing human skills and labour and in contrast BPaaS is about automated services sourced from the cloud and operated within a shared multi-tenant infrastructure. The “Big Switch” for BPO players is to change their “Flat World” business model and transition to BPaaS. It will be a painful switch, but those who can make it will get tomorrow’s enterprise business.

For a more detailed discussion of operational and infrastructure deployment choices check out the following:

Operational Deployment Models: From In House To BPO

Computing Deployment Models And Cloud Traceability

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About Pim Bilderbeek