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The Potent Combination of Cloud Computing and BPO

By Praveen Shrikhande

There has been so much written and said about cloud computing that I sometimes feel that its real benefits might get lost in jargon. So what exactly is Cloud Computing? By far, Wiki gives the simplest definition. Cloud computing is Internet-based computing, whereby shared resources, software and information are provided to computers and other devices on demand, much like the electricity grid. It is a paradigm shift following the move from mainframes technology to client servers in the early 1980s and from client servers to Web-based applications in the late 1990s. The term ‘Cloud’ is a metaphor for the Internet. The cloud has fast gained traction as an attractive alternative to in-house computing systems, and complex support and maintenance processes that companies have had to maintain so far. A lot of the benefits that cloud computing bring to the table mirror those of Business Process Outsourcing (BPO). For instance, agility, scalability, reliability and cost arbitrage. BPO players have been so far providing process consulting and delivering business processes for their clients. This process knowledge coupled with the shared technology infrastructure options now being offered by players in the cloud, ranging from hosting infrastructure providers like Amazon to ‘Software-as-a-Service’ (SaaS) providers like Salesforce.com, can facilitate outsourcing entire business processes along with the associated application platform into the cloud. And therein lies the next transformation that BPO is all set to see. For companies having existing legacy systems, which need significant investments in maintenance and upgrades, outsourcing processes and moving to a cloud- based platform can transform their processes on next-generation platforms in a very cost-effective manner. The potent combination of cloud computing and BPO will yield a higher cost arbitrage, and even higher scalability. Most service providers of cloud-based solutions offer variable pricing, which implies that with business variability, the spikes and lows in incomes can be matched with an equal control on cost. Since the model is pay-per-use, costs can be constantly monitored to be maintained at an optimal level. This is in itself, is a huge transformation from the sunk infrastructure costs that organizations have borne over the years, regardless of the business state they have been in. Additional benefits accrue from savings in recurring expenses on maintenance and support and managing version upgrades that most on premise applications require periodically. There continues to be apprehensions around data security and availability, as internal corporate data is hosted and accessed over the Internet. However, security standards and protocols are evolving to ensure increased security and reliability. Even today, most organizations have to contend with employees accessing critical information from various external locations, including their homes. Cloud application providers are beginning to offer superior security solutions, including virtual private networks, SSL and RSA tokens. Cloud computing is clearly a trend, which will enable BPO service providers to offer platform-based BPO services in a cost-effective manner to their clients.

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