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Trend: SaaS-enabled BPO

Posted on Wednesday, Jul 13th 2011

Otherwise known as technology-enabled service, the practice of offering not only software as a service, but also the people who can execute on those services with specialized skills and training, is becoming increasingly prevalent.

This gives rise to a new breed of outsourcing: highly specialized, high value, and differentiated outsourcing with interesting technology nuances. The best-known examples of truly large companies built on this model are ADP and Paychex. Now, however, I see a new trend developing along these lines.

I first wrote about this trend in 2008 when I covered Sabrix, an enterprise tax process outsourcing company. And one of the absolute best examples of this trend is AthenaHealth, whose CEO Jonathan Bush I interviewed a while back, and the company has since come to be valued at close to $1.5 billion. They do healthcare claims processing as a technology enabled service.

More recently, I spoke with the Chris Coles, CEO of HyperQuality and observed excellent execution of the same trend whereby HyperQuality audits, analyzes, and improves the process and performance of contact centers using “listening agents” and highly differentiated software as a service.

In 1M/1M, we have Happy Grasshopper, which is making life easier for real estate agents and Realtors through a referral marketing service that relies heavily on technology but also uses human agents in its service delivery process. The company has been getting very positive reviews from customers and is ready for a round of financing.

What I find interesting about this trend is that it takes outsourcing to a whole new level by enhancing the role of technology and, at the same time, enhancing the role of the agents who need to be more specialized and have more advanced training to perform their respective functions. It aligns with my prediction that the next decade of outsourcing will be characterized by increasingly higher degrees of specialization, and as such commodity players will face a more challenging competitive environment.

Look for more on this soon in my upcoming interview with P.V. Kannan of 24/7 Customer.

This segment is a part in the series : Trend

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