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Tibor Beles, VP Sales, Global BPO, heads Oracle's BPO practice. Read why he thinks HRO buyers will take a more aggressive outsourcing approach in the future, how IT will bring innovation to BPO processes, and why time is so critical to outsourcing transactions.

Q: What is Oracle's outsourcing strategy?
A: Our strategy is to focus on providing the software and additional value-add services to the BPO supplier. When a qualified supplier offers services on our technology, we say they are delivering BPO Powered by Oracle.

Our goal is to help suppliers reduce time to revenue, cut cost, and improve profitability while addressing their innovation challenges.

Q: Why is Oracle interested in the BPO market?
A: We see a significant opportunity in the BPO market because today buyers expect improved service delivery from their suppliers. It takes a different approach and next-generation technology to support change.

Q: Is there a particular type of supplier you work with?
A: We are working with leading business process outsourcers (BPOs) and providing our technology and applications solutions to support their outsourced offerings. These relationships will give our customers more choice in deciding how to leverage investments in Oracle software and help them reduce costs and increase efficiencies.

Q: Since you work with suppliers and buyers, you have a unique perspective on the market. Where do you think BPO is going?
A: I think transactional human resources outsourcing (HRO) will continue to grow, and transformational outsourcing will grow over time. BPO buyers will reconsider what is tactical and what is strategic, and the answers to those questions will grow broader over time. Buyers will take a more aggressive approach to BPO in the future, but, at the same time, their choices will be more complex.

I also see an increase in the demand for industry-specific BPO offerings.

Q: Any advice for BPO buyers?
A: Buyers have to understand that the technology component of a BPO offering is a significant part of the BPO decision. Buyers should be familiar with the platform the supplier is using, as it will speed the implementation process.

Additionally, buyers have to know if they can transition back to an in-house model at a later date. Changing market demands and unpredictable business challenges can impact how organizations need to manage certain business processes, or they may outgrow the services of a specific BPO supplier. So, buyers should know up front if it is possible to move to an in-house model.

Q: What is the biggest issue in BPO today?
A: Time to revenue. Time matters so much in this business. Suppliers have to figure out how to onboard a new buyer in the shortest possible time. Time is equally as important to the buyer because they want to leverage outsourcing benefits as quickly as possible.

Q: Are there any other challenges on the horizon?
A: BPO suppliers have to find a way to grow their businesses with sustained profitability. New entrants will have to find a way to differentiate, grow their businesses, and generate profitable revenue.

Buyers will have to deal with a couple of challenges, the first being process-integration issues. They will demand integration be as seamless and inexpensive as possible. At the same time, they will want to find a way to reduce the amount of management attention dedicated to the process they just outsourced. It's also important for buyers to find a way to establish a good working relationship with their suppliers.

Ideally, BPO is a win-win deal for both parties. The buyer enjoys reduced cost and process improvement; the supplier has higher revenues.

Q: What are some of today's BPO risks?
A: Buyers have to worry whether the supplier is going to deliver as agreed. Will the supplier be able to integrate its platform with the buyer's?

Q: What is the best way to take out cost in a BPO deal?
A: The majority of BPO deals today involve offshoring because it is a significant way to take out unnecessary cost. Labor arbitrage is not the only value-creation option, however; software can also drive cost savings.

Q: How does a supplier improve the process?
A: Innovation is the key. You have to improve the process design and workflows with supporting technology. For example, the functionality in Oracle Applications can help suppliers innovate. Because business analytics require superior software functionality, the supplier has a great opportunity to complement the solutions it is already providing with Oracle Applications that offer business analytic capabilities. Analytics can greatly improve the process.

Another area where technology can improve process is in human resources, specifically in employee training programs. Training can be costly and complicated. However by offering training to employees through a self-service model, it becomes easier and less costly.

Q: Are current outsourcing contracts structured for innovation?
A: Service level agreements (SLAs) have to be flexible, as it's important to leave room for innovation.

Q: How did you learn your global focus?
A: In 1998 I moved to Singapore in a regional position heading market development in Asia Pacific for another software company. I sold solutions to service providers; back then it was application service providers (ASPs) and collaboration hubs.

In 2000 I returned back to Europe in a global position selling collaborative enterprise applications. Working on new, innovative software offerings in a dynamic global market gave me great exposure to solution delivery challenges.

Since 2002 I have been focusing on selling and delivering IT platforms to and developing partnerships with BPO suppliers. The BPO IT platform is similar to large enterprise-wide IT deployment, only on a more complex scale.

Q: What's your view about standardization?
A: Standardized platforms help lower cost and accelerate customer onboarding. Smart standardization should not hinder flexibility, however; it should configure rather than customize IT.

Q: So how did you cross the divide from IT to BPO?
A: In 2002 there was a good opportunity for application providers to leverage BPO because of the changing market?buyers were considering global, multi-process deals. Existing platforms didn't support these kinds of deals.

Q. Where were you born?
A: Slovakia. I graduated with a computer science degree from Slovak Technical University. But I learned most about business in the executive management program at the Harvard Business School.

Q: Where do you live now?
A: Munich. I visit Bratislava, my hometown, often.

Q: What's been the most formative business book you've read?
A: The Tipping Point by Malcolm Gladwell. I recognized many of his examples as true. It's an incredibly convincing business book with a strong human dimension. I have a 15-year-old daughter; his advice about dealing with teenagers was priceless. He gave me great life information!

Q: Did you have someone who influenced your career?
A: John Donovan conducted a management session at MIT that I attended. He said, "If you can dream it, you can do it." He was telling a story about a disabled girl who was able to climb a mountain. I realized he was right: everything starts with a dream. That was an inspirational statement. It spoke to me, a person coming from a small country, which has seen a lot of transitions.

Q: What's your favorite movie?
A: As Good As It Gets with Jack Nicolson and Helen Hunt. It's a rarity: a really good comedy. The movie got the right name?it is as good as it gets.

Q: What's your favorite sport?
A: I enjoy playing tennis and watching ice hockey and soccer.

Q: If you could do something different, what would it be?
A: Now, at Oracle, I have my dream job!

Publish Date: July 2007

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Why BPO Buyers and Suppliers Changed Their Focus to Automating Their IT Infrastructures: Tibor Beles, VP Sales, Global BPO, Oracle

Copyright © 2007 - Everest Partners, L.P.

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