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Saugatuck and CFO Research Launch Business Process Outsourcing Program

Joint research program focuses on changing BPO buyer behavior, user expectations and decision factors

Westport, CT February 3, 2004 –- Saugatuck Technology and CFO Research Services today announce their third executive-level research program, entitled "Business Process Outsourcing: Where’s the Business Value?” The new program focuses on the BPO buyer decision-making process, including buying behavior, decision factors, management strategies and user expectations. The program will culminate in the publication of a comprehensive research report in the second quarter of 2004.

“BPO is one of the most important business and IT trends in the coming decade," explains Bill McNee, Founder and CEO of Saugatuck. "Our initial research shows that it is not just about cost-cutting anymore. Companies are looking to leverage the expertise of service providers to provide other business benefits -- such as improving customer service levels, reducing cycle times, and reducing risk by outsourcing non-core business processes.”

“BPO, and outsourcing in general, carry a high risk/reward potential. This study will help inform and guide senior financial executives in making better sourcing decisions,” says Mary Driscoll, President and Editorial Director of CFO Research Services.

"This BPO research program is designed to establish a solid foundation on which to guide senior executives as they consider, buy, and manage BPO services," adds Saugatuck Senior Program Director Michael Isaac, who heads the program.

According to Isaac, the program will provide a clearer understanding of the value CFOs, CIOs and LOB executives expect from BPO, and the resultant trade-offs they are making as they evaluate a constantly-growing set of strategic and tactical outsourcing options.

Early Saugatuck research has already uncovered emerging obstacles that could hinder BPO adoption. These include the following:

• The difficulty of untangling processes has become as significant an obstacle to BPO as privacy and security concerns.
• While most companies have issued corporate directives to consider the outsourcing of individual business processes, they do not have cross-enterprise strategies addressing BPO.
• Companies are only starting to view BPO as a source of competitive advantage.

Research program leader Isaac states that this research program will provide a clearer understanding of the value that CFOs, CIOs and LOB executives expect from BPO, and the resultant trade-offs they are making as they evaluate a constantly-growing set of strategic and tactical outsourcing options. Among the issues to be addressed:

• What are the new sources of business value that users will look to achieve via BPO? To what extent will this drive purchase decisions beyond the need to cut costs?
• Where will the next wave of BPO growth occur? For what business processes? In which vertical industries?
• What will drive the “right-shoring” decision addressing the on-shore/near-shore/off-shore delivery model? How important will the flexibility to offer different delivery models be to vendor success?
• What new pricing structures will users prefer for different types of engagements? Under what circumstances will these new structures create win-win scenarios for users and vendors?

This is the third research program implemented by the Saugatuck-CFO partnership, which examines executive-level IT investment decisions and the business value of IT. The partnership combines CFO Research Services’ unparalleled access to financial executives at America’s top companies with Saugatuck Technology’s experienced team of strategy consultants and IT thought leaders. Previous studies have examined the business value of customer-centric technology investments and the value of "pay-as-you-go" IT services on demand.