Organisations warned over hidden BPO costs

Successful business process outsourcing initiatives require a robust telecoms and network infrastructure

Organisations may be undermining business process outsourcing (BPO) initiatives by failing to take account of the telecoms and network infrastructure issues which are vital to successful projects.

Harry McDermott, chief executive at specialist telecoms consultancy Hudson & Yorke, argued that, because most BPO initiatives are business driven rather than IT driven, such important factors are often ignored and can lead to hidden costs.

"If you outsource your processes to a country chosen because of labour arbitrage, it doesn't mean that the network infrastructure is fit for purpose there," he said.

"Even if the client has a strategic relationship with a global network operator, it doesn't necessarily follow that the operator will have point of presence in the [outsourced] country, or a relationship with a local provider."

McDermott added that firms need to carefully assess the network and telecoms infrastructure of any potential BPO location, and the capabilities of the incumbent telecoms provider. Companies should also ensure that there is enough cost built into the business case to address any additional infrastructure requirements.

"There is dual responsibility on the business side to articulate to IT what its plans are and in reverse, once IT understands the goals of the BPO process, they factor in all aspects of the IT necessary to deliver and support it," he said.

The chosen telecoms provider in a deal should also be invited into any discussions at as early a stage as possible, said McDermott.