BPO + BPM = ROI

I finished my white-paper on Unprecedented ROI for BPOs recently and there were some real eye openers for me as I did my research for it.

I have been looking at the problem of how to predict and forecast the potential return on investment from BPM and Business Rules for a number of years. The BPO (business process outsourcing) opportunity is so completely perfect for BPM. Just look at these industry norms:

  • The average BPO contract deal is $300 million.
  • The average BPO contract term is approximately six years.
  • The average BPO sales cycle for a $300 million contract is eighteen months.
  • Typical service transition costs are 33 percent of contract value.
  • The average time to fully transition a complex business process operation is twenty-four months.
  • The average number of customers for a $1 billion BPO is twenty.

I focussed in on just those service transition costs and based on what our customers have done with our kind of BPM was able to safely show a return between $24m and $40m! You can read about it in the whitepaper, but it is rather compelling, especially since this field is getting more and more competitive. Have you had experience with BPM in BPO? I'd love to hear and welcome questions!

An average BPO contract deal is $300 million.
• The average BPO contract term is approximately six years.
• The average BPO sales cycle for a $300 million contract is eighteen months.
• Typical service transition costs are 33 percent of contract value.
• The average time to fully transition a complex business process operation is twenty-four months.
• The average number of customers for a $1 billion BPO is twenty.