Whale Oil, Technology and Business Process Redesign

The history of whale oil is instructive for how technology can sometimes alter the rules completely. This will be the case with business processes if you just keep your eyes open for some fundamental rule-changing developments in the application of technology.

The mid-18th century saw the peak demand for whale oil for heating and lighting homes. This led to high prices and the decimation of the whale population. TIt also led to natural gas and petroleum becoming viable alternatives for whale oil. Boom! Petroleum, gas and diesel took off! Seems like we have hit a similar inflection point with global demand for oil reaching its peak and stoking the demand for the search for alternative energies.

Similar trends are surfacing in the world of work and business processes. Except in this case, new technologies seem to be driving the way forward. When developed countries build their middle class and the wages and benefits go up, many manual tasks are enabled by the Internet and computing to be spread among low wage countries like India, China and Vietnam. However this is not likely to stay static. As wages rise in these countries also, companies will look for ways to do it faster, cheaper and with more quality.

Here is where technology will drive a lot of process redesign, innovation and complete automation. Credit card applications used to take weeks for approval even 10 years ago. The last credit card I applied for was approved instantaneously after passing quickly through business rules systems, an automated Web-based application process and my credit card company computers talking to credit rating companies’ computers. May not happen in all cases but I bet that 80%of cases are straight approvals or straight rejects in keeping with the universal 80/20 rule. So what may have been outsourced became totally automated!

What this means for the business process outsourcing industry is that many of these jobs may not be permanent either. Companies would rather have online Web-based portals answer customers’ questions 24/7 rather than have a person answer the phone. They would rather find more automated ways of enabling annual tax returns to be done rather than have human beings do them for you.

Whale oil to petroleum to solar/wind or biofuels. So will be the case with manual work over the long run. Easier, cheaper and better ways of doing things will always be sought after! It is better for service providers to seek them out actively and make them happen for their customers and become computer and software experts rather than rely upon the permanence of any of the current business models in process outsourcing.

Become a student of change. It is the only thing that will remain constant. - Anthony J. D’Angelo