Movers or shakers: Companies move past IT and onto people in the outsourcing game - People & Management: Business Process Outsourcing
Author: CommunicationsWeek International

When Gideon Agar, the chief executive of Parc Technologies Ltd. (left), was seeking ways to conserve cash at his IP optimization company, after making across-the-board cuts, he realized he had to make more drastic changes.

He had been approached by senior sales people laid off from telecoms companies who were forming their own sales agencies. This gave him an idea: he could cut out a significant part of his cost base while still retaining business-getting talent if he outsourced Parc's direct sales. And the relationship may extend to the implementation and maintenance of Parc's equipment, says Agar.

Although the CEO of a startup vendor might face different cash crises than those faced by executives at larger companies, the trend of business process outsourcing (BPO)--as opposed to pure IT functions--is becoming increasingly prevalent in telecoms.

"Large telecoms operators thought that they had to do everything themselves--that was their heritage--but now they can't afford to do that anymore. It's just not strategic," says Mark Fleming, a partner at Accenture's Communications and Hi Tech practice, based in London.

Outsourcing has traditionally been the areas of IT and networks, but the relationships formed between consultancies and their clients are now extending to BPO, specifically for back-office functions like accounting, credit control and human resources. "For people willing to outsource data centers and application management, the next stage will be more complete outsourcing," says Erwan Le Duff, Paris-based director of business development and global service line leader for telecoms outsourcing at Cap Gemini Ernst & Young.