Taking Labor Out of BPO

Principal Marc Tanowitz and Senior Associate David Borowski offer commentary on the value of removing labor costs from BPO by utilizing automated technology solutions. Sample excerpts: “’BPO is migrating to a continuous-improvement model where technology solutions take the labor out of the cost of BPO,’ says Marc Tanowitz principal of Pace Harmon, a consulting firm specializing in outsourcing advisory services. ‘Taking labor out is a better solution than labor arbitrage.’ Tanowitz says the removal of labor costs from BPO via automated technology solutions makes the whole cost of BPO go down. ‘There is market saturation [of labor-based solutions],’ he says. “The next wave of BPO solutions will leverage technology to drive costs of BPO down.’…‘Platform-based BPO solutions create a competency- and utility-based BPO model with variable, transaction-based pricing,’ says Pace Harmon senior associate Dave Borowski. “Back-office processes are still very labor-intensive, but there is a new interest in creating an incentive for the BPO vendor based on outcome.’”