Back View More

1-10-2018 Blog: An SOS for BPO

An SOS for BPO

January 10, 2018

If you deleted the date from most insurance trades — and if you were able to make terms like OOP, e-commerce, wireless technology, ASP, SOA, SaaS, cloud, and myriad others interchangeable — the hype in them would likely make their publication dates indeterminable. Why is that? Because hype sells. And because it’s more exciting to focus on hype than it is to focus on reality.

But the reality is that while hype catches the eye, the insurance industry runs on reality. Case in point: BPO.

In the early 21st century, BPO was all the rage. Good idea? Bad idea? Safe? Risky? You could get an equal number of opinions on the merits and detriments of BPO. It became all but ubiquitous, even if reports about it were sometimes contradictory. Consider these excerpts:

On November 7, 2003, Datamonitor published a report entitled BPO in U.S. Insurance. It said this, in part:

Insurers’ are becoming increasingly aware that their ability to focus on their core competencies will be the key to success in an increasingly tight and competitive field. By outsourcing non-core operations, insurers can focus on what they might consider most strategic – i.e., the external marketplace and its customers.

Slightly more than nine months later, on August 31, 2004, Celent published a report entitled, Insurance BPO Market Survey: Will the Watched Pot Ever Boil? That report said this, in part:

Many carriers remain unconvinced that outside parties can develop sufficient insurance vertical expertise … And even if vendors can prove they have the expertise, there are other considerations, like the additional costs of managing outside resources.

Doesn’t that seem quaint? Of course, it does. That’s because so many insurers now outsource so many services that BPO has become antiquated and diluted, both as a practice and as a business model. All we can do is wait for industry observers to catch up.

Sending out an SOS

As the next evolution of the insurance business model, Xceedance has created, and we continuously perform, Strategic Operations Support — SOS. Beyond the tactical, back-office services that comprised conventional BPO, the broader focus of SOS is on the strategic, revenue-generating, service-improving activities across the insurance lifecycle.

And it’s just possible that, once SOS catches on with the company executives and shareholders who demand peak efficiency and steady profits, the pundits will take note as well.

We can’t be sure of that. But we can be sure we’ll pick up this thread in our next post.

See you then.