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Ovum warns vendors to drop hype around BPaaS or risk losing customers in confusion

(PresseBox) (London, ) The potential impact of cloud on propositions of platform business process outsourcing (BPO) and business-process-as-a-service (BPaaS) has caused distinctions among the various propositions to become increasingly blurred and thus further confused buying organisations, according to global analyst firm, Ovum.

In a new report*, Ovum finds that the BPaaS concept appears to be the logical evolution of cloud services, where standardised processes have been wrapped around software-as-a-service (SaaS) offering, rather than of BPO.

Thomas Reuner, Ovum Principal Analyst, IT Services and author of the report, comments: "In the narrower context of BPO, Ovum believes that BPaaS is more a future vision that is not yet resonating with buying organisations. Most marketing messages are reminiscent of the early hype around cloud services."

"Ovum assessment of cloud services and services adopting cloud components need to be conducted within the wider framework of industrialisation. The evolution of BPO and the impact of cloud components on BPO delivery need to be discussed around cloud computing needs that are balanced with the complexities that buying organisations currently face," Reuner adds.

In Ovum's view, there is a fundamental danger of misrepresenting BPO by overselling technology rather than the human interaction in the business process, reminiscent of the early days of BPO at the beginning of the millennium. This danger could be mitigated by not using platform BPO and BPaaS interchangeably. However, providers need to ensure that this dissemination of business processes does not create a new complexity that would go against the trend of reducing the number of providers through portfolio rationalization.

Reuner explains: "Despite being highly standardized offerings, cloud services (and so BPaaS) will lead to more complexity for buying organizations as cloud standards have still to emerge. This will require new sets of governance skills to make this a reality."

"The push toward platforms is increasingly accompanied by bundling of infrastructure components as part of the BPO contract. Consequently the boundaries between IT outsourcing and BPO are becoming blurred." concludes Reuner.

* The Evolution of Business Process Outsourcing: from Platform BPO to BPaaS – Balancing industrialisation and business complexities


Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organizations must support. Ovum is an Informa business.