While insurers face numerous challenges in making business process outsourcing (BPO) work, many expect their company's use of BPO to remain level or increase in 2011.
Analysts at
The firm conducted interviews and surveys for the report, finding that nearly half of all respondents (49%) expected their company's use of BPO to remain level in 2011, while 36% expected it to increase. The top three areas of concern regarding BPO for core business processes were lowering of service levels (49%), loss of control (44%) and data security (41%).
Significant hurdles and challenges are forcing insurers to play a waiting game. One challenge is finding a vendor "fit," Celent says. Insurers believe that BPO- and SaaS-based offerings have not matured. Respondents rated vendors' capabilities strongest in the print/mail areas and weakest in the core business processes.
Another challenge is getting processes under control so that they can realistically be outsourced. A third is pushing their corporate culture toward BPO. And a fourth is getting over the perceived loss of control inherent in outsourcing business processes.
Celent advises insurers that will eventually take the plunge to make it a short wait. They should get started bringing these new tools to bear on their core systems strategy, perhaps experimenting with a portion of core systems and services that travels well.