- Additional metrics of implementation achievements include:
- a 50% reduction in the cost of processing an order
- the on-time delivery performance improving from 67% to more than 97%
- a 21% improvement in order-to-bill cycle time
- the rework of an order in its lifecycle reducing by 63%, from 40% to less than 15%.
Wipro’s BPO collaboration with BT began in 2007. It started with project work in which Wipro helped to apply changes to business processes. It evolved into a full-blown BPO contract in 2009, and is a reference point for the customer’s journey toward higher degrees of process automation. However, automation has so far only been achieved in specific areas, and thus it should be seen as work in progress. In turn, automation is the prerequisite for moving toward business outcome-based outsourcing contracts, and measuring the business more effectively on business-related metrics. Wipro was retained to provide order management services to improve the cash-to-cash cycle. One of the specific requirements, and at the same time one of the key challenges, was to work with multiple stakeholders and parties to control the order management cycle. Thus Wipro had to rely on client resources and more than 150 third-party suppliers across the world. The complexity of the project is further evidenced by its operations being supported in more than 90 countries, and by the organizational setup of BT being in constant flux, thus necessitating processes to be continuously adapted.
The scope of the MPLS delivery and fulfillment project included:
- order-to-activate process · provisioning · supplier management
- support for products such as WAN/MPLS, ATM, broadband, ethernet, hosted services, IP technology, and ISDN
- 650 FTEs (includes all those working on the overall BT account; around 150 FTEs are employed on this specific work stream)
- support for operations in more than 90 countries.
To help outline the scale and reach of Wipro’s end-to-end responsibility, the operating model of the engagement can be split into four phases of the order cycle:
- Order acquisition – customer sign-off to order receipt date
- Order sourcing – order receipt to order entry completion, placement of orders and confirmation from supplier
- Order fulfillment – logistics, dispatch, and successful installation and testing
- Customer handover/billing – lead time to close billing activity.
The three main factors that helped Wipro win the competitive tender were bringing a fresh pair of eyes to a complex process, supporting the development of BT’s MPLS business, and offering a competitive cost structure. While BT chose Wipro predominantly on price, the telco managed the tender process with a balanced scorecard. The majority of the contract is based on time and materials, but elements of gain/share will be progressively introduced based on headcount reduction, process efficiency, and a reduction of the lead cycle time.
Implementation and results
Due to the complexity of the project, a multitude of methodologies and approaches were used. From a generic BPO perspective, the use of established business process management techniques and quality approaches of Lean and Six Sigma was a key component of the engagement, as it enabled the handling of exception management and the elimination of non-manual intervention. Wipro is aiming to operationalize business processes, and fundamental to this is the drive to codify process knowledge into the process layer, which is critical to managing the transformation for new clients. Dashboards and reports are key elements of this, and configurable benchmarks will further help process owners manage and mitigate risk. By helping clients and prospects with baselining and benchmarks, Wipro is addressing the central concerns of buying organizations. Wipro’s executives highlighted three project phases that were fundamental to the eventual success of the project:
- Phase 1 – providing a more predictable service through a backlog reduction approach
- Phase 2 – reducing delivery times through improving processes and implementing work allocation systems
- Phase 3 – reducing cost per order through standardization of supplier management, inventory, and waste in the process.
Phase 1 focused on controlling the backlog inflow by introducing "jeopardy management." For instance, clear escalation paths were implemented on a country basis, and this was supported by accountability enhancements that established realtime access to common data reference points. The process was further optimized by ensuring direct leadership involvement for quick resolution of outstanding issues.
Phase 2 emphasized providing a better customer experience through shorter cycle times and improved order delivery predictability. On the process side, Wipro used a value stream mapping methodology to identify bottlenecks in the process and to suggest improvements. The aim was to define standard lead times for each order type. Wipro supported this by implementing a work allocation system to allocate orders to team members on a pull method, and introduced an order management help desk to provide order managers with more accurate information and tailored support.
In Phase 3, the cost per order was reduced by a variety of measures. The central aspect was the rationalization and standardization of the way dates were handled on orders. This led to a reconfiguration of the order process, with the priority changing from the oldest task in the system to the earliest due date of delivery.
The measures in these phases were aimed at supporting a differentiated customer experience, chiefly through enhanced analytics (dashboards and reporting) and improved performance management, which Wipro achieved by creating accountability and linking it to business objectives.
Executives at BT were largely positive about the partnership with Wipro. They felt that the vendor understood BT’s requirements, which was not a given due to the inherent complexities and the constant flux of its organizational boundaries. The key benefit has been in establishing a standardized process globally, underpinned by extensive documentation. Despite the problems that are unavoidable in such large transformational projects, BT described Wipro as being good and reliable in moments of crisis. For BT, process improvements and organizational issues were more important than any technical innovations. With that in mind, issues such as process or robotic automation were seen as innovation, but not as being decisive for the overall success of the project.
Conversely, the challenges were seen in attrition. BT freely admitted that the processes covered were not the typical BPO processes, and constant pressure from BT and complex job requirements inevitably led to attrition and sub-optimal levels of recruitment. Consequently, the main lessons from this engagement were that the service provider should be more tightly integrated in the performance feedback loop and that external staff should be seen as part of the team.
The evolving pricing models indicate how much the project is a joint journey. BT’s journey is far too complicated for it to have implemented innovative pricing mechanisms from the start of the engagement. In this context, its aspiration is to move toward more innovative pricing mechanisms, with intermittent stages around reduced headcount or transactional elements to, for example, reduce lead cycles. For BT executives, implementing a higher degree of process automation may not have appeared as the cornerstone of the journey toward business-centric contracts, but it is an essential ingredient to manage contracts based on business metrics.
"On the Case"
On the Case is a premium case study produced by Ovum’s IT Services team. These case studies highlight IT services and outsourcing engagements based on a series of criteria, including innovation (a unique component in either service engagement or delivery, or the deployment of cutting-edge technology), proven business benefit or impact, and demonstrable ROI. On the Case is designed to provide insight to enterprise customers looking to implement similar IT services or outsourcing engagements and/or to provide lessons learned on how to work and interact with the IT services/outsourcing vendor profiled in each case study.