Exploring How BPaaS Works in the Real World

If you’ve decided to use a hybrid cloud model as a delivery platform for services, you need to understand how to mesh services together based on the processes you want to execute. For example, say that your company decides to use some well-defined cloud-based capabilities to make it more productive.

Following tradition, your larger competitors probably have spent huge amounts of money buying the latest and greatest applications to help streamline operations. Likewise, they’ve probably hired the biggest consulting firms to help them be more innovative in the market. They’ve often created systems that enable them to automate complex processes in order to be as efficient as possible.

As a smaller company, you might be at a disadvantage without BPaaS services. You’ve already discovered the benefit of leveraging various cloud models including sophisticated SaaS and PaaS environments that sit on top of cloud-based infrastructure services. You may, for example, have decided to leverage SaaS-based sales automation, human resources, and accounting services. You’ve also leveraged the PaaS environment to construct application services that allow you to differentiate yourself from your competitors. You have several different databases of customers, prospects, and partners.

Now here is where PBaaS comes in. You want to be able to use BPaaS workflow tools to link together elements of your cloud services with new processes that might give you a competitive advantage. Also, you know that packaged BPaaS services are readily available that can help you scale this process. Shown in Figure 8-1, a business process service can be linked to a variety of services ranging from SaaS applications, PaaS environments, and IaaS. For example, there may be an analytic process service designed to analyze information coming from a variety of CRM and social media applications.

BPaaS services allow you to experiment with new business process ideas because they’re not based on programming each individual business initiative. For example, a packaged BPaaS offering that handles business travel processing or order-to-cash processes may be available, as well as other services that will handle load processing or payroll services, and predesigned services useful for everything from processing claims to managing clinical data for drug trials.

The benefits of cloud-based BPaaS

Like other cloud-based services, BPaaS frees the business and the IT department from having to worry about the underlying services that support the various processes. You don’t have to manage or even know about the underlying middleware, networking, or database. Offerings are created so that security is an element of the solution, not an afterthought.

The process services offered by ADP are probably the best-known BPaaS services. ADP helps companies manage their payroll and the accounting and legal aspects related to that process. A company using ADP doesn’t have to be concerned that its payment information will be intermixed with information from other companies. ADP can implement payroll services based on its customer’s specific business process. For example, some companies pay certain employees every week, while others may be paid monthly. Likewise, a customer might have employees in 20 different states with processes based on rules and governance that ADP implements for its customers. ADP’s customers use a subscription model to acquire services and only access the details of their services through an Internet portal. This portal provides all the information the client needs, including costs, reporting, compliance, and data quality.

What BPaaS companies look like

It’s worth describing some of the businesses that deliver massively scaled cloud applications and business processes. You may not be aware that these companies provide a business process as a service.

Most of the businesses listed here had to cover uncharted business territory when they developed their service. For this reason, the services they offer may not traditionally be thought of as business services — but that’s really what they are.

Here’s a list of companies in this field and the business processes they deliver:

eBay: Provides an electronic auction service (www.ebay.com )

PayPal: Provides an Internet payment capability as a service (www.paypal.com )

Skype: Owned by Microsoft, Skype provides Voice over IP (VoIP) telephone calls as a service, most of which are free (www.skype.com )

Google: Provides an Internet search capability as a service (www.google.com )

This service is free when you have access to the Internet. Google also provides an Internet e-mail service, Gmail. Google has quite a few other services, including maps, news aggregation, Google Apps, and so on.

YouTube: Provides video self-publishing as a service and was acquired by Google (www.youtube.com )

Yahoo!: Like Google, Yahoo! (www.yahoo.com ) provides an Internet search service and e-mail service

Mailchimp and Constant Contact: Provide services for sending out online newsletters and marketing campaigns (www.mailchimp.com and www.constantcontact.com , respectively)

Craigslist: Offers small ads as a service (www.craigslist. org)

WordPress: Hosts blogs as a service (www.wordpress.org )

LinkedIn: Offers business contacts and networking as a service (www.linkedin.com )

Facebook and Twitter: Provide social networking services that have a huge reach across the globe (www.facebook.com and www.twitter.com , respectively)

This is by no means an exhaustive list, and these services are useful to businesses as well as consumers. Many businesses use eBay, and eBay supports a group of companies that use it as the foundation of their business model. Many businesses depend on PayPal as a way of collecting payments. Businesses advertise on Craigslist and Facebook. A fair number use Twitter as a marketing and public relations outlet. Also, all these businesses have tens of millions of customers. Nearly all of them require very large data centers to cater to their millions of customers.

These companies are able to support these types of business processes because of the massive data centers they’ve designed to support a specific type of workload. Because their data centers are optimized to support these specialized workloads, they are able to easily support millions of users so efficiently that it’s very hard to compete with them.

Looking at web-based business services

You might be inclined to think that web-based businesses are somehow different than the companies to which you outsource your energy generation or the companies that provide your communications, but they’re very similar.

Be aware that many of these web-based companies started out without a well-defined revenue stream, and some of them have yet to demonstrate a viable business model for their activities.

This is currently the case, for example, with Twitter, Facebook, and YouTube, all of which exist just because their investors (or Google in the case of YouTube) believe that they will eventually find a profitable way of operating.

Most of the businesses we mention are dominant in their field because they have established strong barriers to entry and because of their scalable infrastructure and their ability to deliver services at a very low cost. Quite a few Internet auction houses existed before eBay began to dominate the field, and there have been several attempts by would-be competitors to penetrate eBay’s market, but none have made much of an impact.