Leveraging 3rd Party Service Provider for Captive operations


    A number of global and regional companies have set up captive centers in remote locations to cater to their back office, product development functions. Does this mean,“There is no opportunity for firms to work with 3rd Party Service Providers and capitalize strengths of such providers for internal operations benefit”? Not really!!

    Even a 100% captive operation has a fair and compelling need to work along a 3rd Party Service provider and reap benefits. The areas where this could be considered are

    1) Rolling out pilot processes in newer areas for parent company that captive operation is not familiar with

    2) Expanding service into newer geographies, where in size of operations makes a captive venture unviable and imbalances the effort and reward

    3) Providing peak volume coverage through another operation / facility where in peaks are consistent but magnitude of such peaks is inconsistent and unpredictable

    4) Requirement of a robust disaster recovery / business continuity sites for which green field investments are too expensive

    5) Need for an internal performance challenger or requirement for external performance benchmarks to evaluate internal performance against

    6) Infusion of new thoughts and incubation of new ideas

    P&G is one such organization that balances captive operations with outsourced operations. They have termed this strategy as “Leveraging our best, with Their best”. This has helped them to grow stronger and faster by tapping into the strengths of external partners. Also helped in smoother integration of newer processes that came into organization on account of new business acquisitions.

    In a seminar I attended, a good number of strategic planners, decision makers, global shared service operations heads were looking for solutions in terms of how they can benchmark internal performance and infuse newer ideas apart from the ones that are generated internally. May be its time to identify an external, experienced BPO partner for a collaborative effort to accomplish internal objectives!


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