Business Process Outsourcing: Myth or Reality?

ECM

Business Process Outsourcing

The utility HR department is the new battleground.

Today information technology (IT) outsourcing contracts are being signed on an almost weekly basis and are rapidly extending into business process outsourcing (BPO) deals covering a whole range of areas-customer care, human resources (HR), finance and accounting, and procurement, to name a few.

Recently, TXU Corp. agreed to enter into a partnership to outsource areas such as IT, human resources, the call center, billing, supply chain, and finance and accounting. The 10-year, $3.5 billion deal will help TXU deliver improved electric service for customers and higher satisfaction rates, while yielding significant savings for TXU.

Other recent examples include a 10-year, $1 billion outsourcing deal announced by Canadian hydroelectric generator BC Hydro for customer services, IT services, HR services, network computing services, financial systems, and purchasing. ENMAX Corp. in Calgary signed a 10-year customer care outsourcing agreement; and Southern Co. Gas agreed to a seven-year arrangement for call center, billing collections, exception-processing services, correspondence, and transaction and revenue operations.

Why the recent momentum toward BPO deals in the utility sector? For one, BPO is a means to control massive technology and infrastructure upgrades, and these back-office functions require constant care and feeding.