HfS Research, an outsourcing industry research firm, recently published a new study that reports continued rising interest in “Business Platform” approaches to business process outsourcing (BPO). The actual report in PDF format can be found via a link at the bottom of this article: “What are Business Platforms and why they represent the future of outsourcing‘”
The article and the report contain some excellent insights into the development of this approach to business process outsourcing, a phenomenon HfS defines — for the outsourcing domain/empirical context — as follows: “Business Platforms, enabled by the fusion of Cloud Computing, SaaS and BPO innovations in an integrated singular managed service, are emerging rapidly as the desired “one-to-many” utility service provision for providers and a new source of value for outsourcing buyers. ” This HfS definition of the approach emphasizes a drive toward efficient process standardization through IT and other mechanisms, but does not emphasize properties of aggregation and network effects (which I think can often be present in such models).
In the past, these approaches have sometimes been referred to as “Platform BPO.” In my recent working paper/taxonomy– posted at “Platform “Language Games” – a working paper on how we understand platform“–I discussed “Platform BPO” as a kind of sub-category/special instance of “Enterprise Platforms” as follows:
Certainly, there is some overlap in what is encompassed by the definitions of “enterprise platforms,” “domain/function platforms,” and “technology platforms.” However, I would argue that there is little or no overlap of the categories “enterprise platforms” and “product platforms,” unless, as we shall see, the enterprise and its platform are geared toward providing (information or other) services, not products (and in this case, the “enterprise platform” does indeed become analogous to a “product platform” to the extent that the platform becomes the means for developing and supporting derivative and new service offerings, while maintaining high levels of standardization and efficiency). One good example of such a case is the phenomenon of “Platform BPO” (see: http://www.outsourcing-center.com/2011-08-how-amcor-achieved-it-business-transformation-by-standardizing-processes-in-10-countries-using-sap-and-a-local-provider-article-45050.html , http://www.outsourcing-center.com/2011-02-business-process-as-a-service-the-next-wave-of-bpo-delivery-article-42948.html ). However, many other examples, of different kinds, could be cited.
In other words, “Platform BPO” (or what HfS calls a “Business Platform” BPO), as a special kind of “enterprise platform” in the service sector domain, has properties that are similar to a traditional “product platform” (to the extent that the platform becomes the means for developing and supporting derivative and new service offerings, while maintaining high levels of standardization and efficiency). At the same time, this kind of platform remains very much within the definition of an “enterprise platform” (albeit specialized). But — at least as defined by HfS as a “Business Platform” — it is significantly different from what I and others have referred to as “Platform Businesses” (see: Part 1: “Modern Platforms” and “Service Science:” New Ways of Understanding “Platform” Mechanisms, Interests, and Outcomes or The Age of the Platform: Phil Simon Serves An Epic Feast To Business Readers), a new kind of business model structure embodied in companies like Apple, Amazon, etc. and their customer and partner ecosystems. However, I do believe a closer look at some of these emerging “Platform BPO” businesses will reveal additional properties of the more complex and extensive “Platform Business” model (especially in the areas of service aggregation, supply chain intermediation, network effects, and customer experience management).