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Analytic Software: As a driving factor of the business process outsourcing (BPO) revolution

11 Comments · Business outsourcing

Software is a major source of business competitiveness, as well as a major source of headaches for anyone who has ever booted a computer.

Originally invented as a tool for us to work with, software has increasingly been designed to perform work for us. Expert systems, decision support systems, and artificial intelligence all are software tools that perform analytic tasks.

Business analysis tasks were formerly the domain of human logicians, administrators, and executive decision makers.

The advent of analytic software capable of re-creating and possibly improving on human decision making has revolutionized the power of the desktop computer.

Where the ideal of the Industrial Age was to eliminate the need for human thinking through mechanical design, the ideal of the Information Age seems to be to improve on human thinking through software design.

Online analytic processing (OLAP) has created a wide range of new possibilities in workplace structure, including effects on hiring practices, organizational design, and productivity.

Although OLAP has enabled some human resources to be eliminated, it has also placed a premium on individuals who can use sophisticated output and create new value with it.

Software that provides human-line data output has opened the door to the possibility for data and information to seek lower-cost labor in the same way that manufacturing has done.

Computational systems that have replaced human analysts range from trend analysis in sales and marketing to workflow optimization on the shop floor.

Before the advent of sophisticated OLAP software, it was necessary for highly educated people to analyze a firm’s data and information to make it useful. In general, the more highly educated the labor, the more costly it is.

As software takes the place of humans in an ever-widening array of business analysis functions, the roles left to people are increasingly confined to implementation tasks.

The training required to implement the results of processed data is usually less extensive than that required to analyze it in the first place.

Reliable data analysis software can eliminate high-cost analyst labor and replace it with relatively lower-cost implementation labor. For many business processes, the outcomes of processed data are predictable within a range.

Business rules can be developed to specify the actions required within a range of possible outputs.

In the case of an outlier, it is simple enough for the data implementation specialist simply to escalate the output to a few management level analysts for additional processing.

Analysts traditionally have been the white-collar middle managers who have served as the glue, gatekeepers, and information stewards in organizations of all sizes.

The transition of analyst jobs from inside the organization to outsourcing partners will displace many of these middle-level roles in organizations.

In fact, as the development of analytic software continues, it is likely that the swatch of job shift in middle management will grow wider and reach ever-higher levels of the organization chart.


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