Hydraulic fracturing, or fracking, is the process of extracting natural gas from shale rock. Fracking allows drilling firms to access difficult-to-reach resources of oil and gas once unreachable with conventional technologies. In addition, innovative three dimensional imaging allows scientists to determine the precise locations for drilling. These advances have led to an energy boom in the United States.
It’s a big business that can depend on BPO services to optimize back office processes.
This increase in oil and natural gas production helped lift the U.S. economy by lowering energy costs for consumers and manufacturers. In 2012, the energy boom supported 2.1 million jobs, added almost $75 billion in federal and state revenues, contributed $283 billion to the gross domestic product and lifted household income by more than $1,200. The competitive advantage for U.S. manufacturers from lower fuel prices will raise industrial production by 3.5 percent by the end of the decade.
Natural gas also means more paperwork
Since some fracking operations take place near homeowners, individual mineral leases within a single neighborhood can create a mountain of paperwork. Effective data management has a direct impact on the energy industry’s profitability. Plus, the normal mailroom application and payment procedures need to be run as efficiently as possible to maximize this industry’s profitability – all while adhering to all regulatory requirements, which are constantly in flux and can vary from city to city.
BancTec has been selected as Technology Partner of the Year for 2013 by Aflac, the largest provider of supplemental insurance in the United States. Aflac made the announcement at its annual awards banquet, honoring BancTec with the award and citing the company’s exceptional BPO services and bottom-line results as measured by improved business performance.
“We are especially honored to receive this award from our largest client in the United States,” said Maria Allen, BancTec EVP and President of the Americas. “We take tremendous pride in the impact that BancTec has had on Aflac’s operational efficiency and ability to deliver superior service to its more than 50 million customers.”
When a business process outsourcing company can have a positive impact on its client’s business, that’s a reason to be proud.
“Aflac is committed to continuously improving our customers’ experience with our products and services, and BancTec is helping us complete this mission. So we would like to congratulate BancTec as an Aflac 2013 Partner of the Year award winner,” said Teresa White, Executive Vice President, Chief Operating Officer of Aflac.
In presenting the award, Aflac referenced notable and measurable results from its partnership with BancTec including improvement in claims throughput, significant reduction in compliance issues, acceleration of cash flow and considerable reduction of costs.
“Insurance companies are faced with an increasingly competitive market,” added Allen. “Aflac’s partnership with BancTec contributes to lower operational costs, improved customer service and faster turnaround times. The results support Aflac’s commitment to provide the best insurance value for its customers.”
Cloud computing and cloud storage are here to stay. It’s the new reality of doing business in a digital environment. While much is being made of the cloud, the concept is simple. When an organization uses the cloud, they are opting for the convenience of virtualized data storage hosted by a third party. The cloud approach can be adapted to support a variety of business needs, such as forms processing and backfile conversion.
Cloud security has been a concern from the beginning. Any number of security threats exist with data storage:
- Data breaches
- Data loss
- Account Or Service Traffic Hijacking
- Insecure application programming interface
- Denial of service attacks
- Malicious insiders
- Abuse Of cloud services
- Insufficient due diligence
- Shared technology
Organizations should be aware of these risks. But if cloud providers are vetted properly, most enterprise workloads and data can be safely migrated to cloud environments.
To be an effective business process outsourcing company, it’s necessary to stay ahead of the trends. Before President Obama gives his fifth state of the union address tonight, I want to share my own predictions and thoughts for the coming year as it relates to the state of BPO.
1. It’s all about integration.
We’ve seen the last decade produce the rise of applications that pummeled the dream that large, highly integrated, yet easily accessible mainframe data structures would generate insight. We now quickly get the one thing we need from these one-off apps, but we need many apps to get the many things we need, whether personally or professionally. 2014 will see application integration become essential, thus integration itself will become exceptionally valuable.
2. Service finally trumps commoditized price.
New data from houses such as Phoenix-Hecht proves that while price was the top reason clients changed provider relationships the last five years, the swing is now to discover the true cost of lousy service that commoditized prices created – and change providers because of it. Companies seeking better or innovative servicing relationships will be willing to spend 4.5 percent to 8 percent more — if it is clearly demonstrated that such a service investment pays off in quality and substantially reduced problems on their end.
3. The government will get even more involved in the approval of financial transactions. [Read more…]
Despite a rocky decade for the airline industry, 2013 was a good year. And this year could be the best year ever. The International Air Transport Association said it expects global airlines to earn a net profit of $19.7 billion in 2014 on revenue of $743 billion. If that occurs, it will be the largest profit for the airline industry. Passenger demand is expanding 5 to 6 percent, and passengers are paying more in ancillary fees, which help boost revenue. All these factors create new opportunities for business process outsourcing in this highly competitive industry.
The airline industry, even with this good news for 2014, is often at the mercy of global changes, customer expectations, and government regulation. As a result, the airlines need to establish control and predictability in the ways it increases passenger revenues while reducing operating costs. It’s important for airlines to track passenger information and share that data across carriers. More airlines are realizing these goals through the effective capture and document management.
A BPO company can help the industry meet each of these challenges by providing both integrated solutions and outsourced services that raise the bar for business processing. An airline can manage, process and store a range of documents — including airline tickets, refunds, card receipts, invoices and more.
- Collect ticket revenue from other carriers in a more timely fashion.
- Retrieve passenger ticket information worldwide.
- Reduce operating costs.
- Archive the millions of past tickets.
Beyond these fundamental needs, other recent trends could create new opportunities for both airline and processor.
Smart companies want to be on the cutting edge, not because of empty “first adopter” bragging rights, but because new efficiencies exist with new technologies. In 2014, as cloud-based technologies develop, business process outsourcing companies can utilize these efficiencies for greater impact in a variety of industries.
In a previous iBPO post (As Cloud Computing Gains Clout, Companies Should Consider Their Options), I suggested that when cloud computing first became popular, analysts thought it might supersede IT outsourcing and BPO, diminishing the field’s relevance. General thinking held that if customers could rent IT capabilities over the Internet — which is what cloud computing is, essentially — why would they need to outsource their records management or payment processing? Over the past five years, though, it’s become clear that these two fields will likely grow together. Companies have learned to combine the two processes, rather than have them work in competition. And this analysis is holding up.
What is the future of cloud?
Outsource Magazine reported that, in 2012, spending on cloud services by small and medium businesses topped $45 billion worldwide and this is expected to exceed $95 billion by 2015. Cloud is giving the smaller business access to computing power, applications and services that before were too expensive or complex to utilize, limiting them to the enterprise client. The report goes on to predict that, in 2014, we will see cloud as a more standard consideration in IT projects and refreshes. It will become part of the formal IT portfolio; and an increasing number of companies will realize benefits from using it. The small to medium business is the powerhouse of the cloud market as they have the most to gain, from flexibility, computing power, resilience and price advantages.
This past week, the World Chess Championship was held in Chennai. Norwegian prodigy Magnus Carlsen challenged the older veteran Viswanathan Anand for the title. In over a hundred years, there have only been 15 world champions. After a set of decisive wins in rounds 5 and 6, and one draw in the 10th to clinch the match, Carlsen became the next world champion. Round 9 was a disaster for Anand when he failed to calculate his opponent’s ability to counter an attack. Business process outsourcing, like chess, depends on making the right moves — precision, careful planning, and anticipating the shifts in an industry so it feels almost like precognition.
There’s a saying among chess grandmasters: “Play the opening like a book, the middle game like a magician, and the endgame like a machine.” These three stages coincide with how a BPO company should provide its processing services.
Play the Opening like a Book
All processing services should be clearly laid out in the agreement. A BPO company must understand your industry — financial services, utilities, insurance, telecommunications, manufacturing, energy, or healthcare — and cater to its unique processes and compliance issues. As a result, a BPO provider should have encyclopedic knowledge of a wide range of industries, much like how a master chess player studies the possible openings.
In the Zen Buddhist tradition, a koan is a paradoxical anecdote or riddle used to provoke enlightenment. The word is Japanese in origin and literally means “matter for public thought.” The purpose of a koan is not necessarily to arrive at an answer. Instead, it should inspire mindful introspection.
For a business process outsourcing company, introspection is important and the answers matter. The processor must fully understand itself and the business it has partnered with, constantly evaluating the efficiency of all processes.
Some BPO koans for a company to consider:
Is your BPO one with your industry?
A business process outsourcing company should be knowledgeable about your industry. So knowledgeable, in fact, that it feels like a seamless extension of your own operations. It’s not enough for the BPO provider to know how to operate on its own end. Each industry has specific needs and its own methodology. Whether it’s financial services, utilities, insurance, telecommunications, manufacturing, healthcare, or the public sector, the BPO provider should speak the language and understand the culture. This oneness only happens with years of experience.
Is your BPO able to stand in your place?
A BPO provider operates as your agent. In contract terms, your business is giving “apparent authority.” Not only that, your business is also placing a bit of your brand in the hands of the BPO provider. Your business brand is the sum total of how everybody interacts with your business. A good processor will be cognizant of that. They’re going to do quality work because that contributes to the overall value of your brand. The concept of agency is important. You want a BPO provider able to represent you well.
The economic downturn and the declining housing market have been closely linked. And while the recent increase in home values has been good for the economy, it could also mean an end to the record-low interest rates. Freddie Mac, the Federal Home Loan Mortgage Corporation, announced that the average weekly rate for a 30-year fixed-rate mortgage jumped to a two-year high. The rate is now 4.58 percent, up from 4.4 percent the prior week. That is the highest level for the 30-year in more than two years, since it hit 4.6 percent on July 7, 2011. The recent spike in mortgage rates has homeowners scrambling to save thousands over the next several years by locking in a rate today. The spike in mortgages will create a surge in loan documents, increasing the need for bulk loan scanning and business process outsourcing solutions.
The improved economy means the Federal Reserve will not continue to lower rates. Instead, we will see rates escalate to normal levels now that the country is climbing out of recession. The Fed lowered short term rates several years ago to near zero in an effort to expand the economy. Historically, rates on 30-year loans are usually 5.5 percent and higher. The difference on a $200,000 home with an available rate today at 3.5 percent versus 5.5 percent is around $237 a month or $2,844 a year. That’s roughly an $85,000 difference in the life of the loan. Savvy investors and people anxious to purchase homes will want to buy now before the rates rise. Mortgage companies will need to be ready for the influx of paperwork.
What would you do with a million dollars? Buy a new house, go on a year-long vacation, start a business, or buy a small island. A million dollars is a lot of money, but it’s not every day that someone ponders what to do with 92 quadrillion dollars.
Actually, $92,233,720,368,547,800 to be exact.
Chris Reynolds of Media, Pennsylvania, was the first person to ever face that question. Just for a moment.Reynolds opened his PayPal statement this month to find he had been accidentally credited $92,233,720,368,547,800. That 17-digit figure reverted back to zero when PayPal corrected the glitch.
“This was obviously an error and we appreciate that Mr. Reynolds understands this was the case,” PayPal told the BBC.
Not too many people would complain about a payment processing error in their favor. But when it comes to business and personal finances, it’s important that every penny is correctly accounted for. Rarely will a global e-commerce business, such as PayPal, make such a large error. However, there are other mistakes businesses should be mindful of, which a BPO company could easily identify and resolve.