Understanding the Total Value of BPO Relationships
Globalization demands that organizations stay competitive and agile. This has never been clearer than the past couple of years. Whether it’s pandemic- and health-related slowdowns or shutdowns, labor challenges or resultant supply chain woes, just about every company in every industry realizes how global the marketplace is. What affects one company or country, affects many.
To stay agile and pivot in a changing market, it’s no surprise that many companies around the world have figured out that business process outsourcing (BPO) partnerships are an essential reality. The global BPO market size is expected to reach $246 billion in 2021 and is forecast to grow to $436 billion by 2028. This clearly indicates the extent to which organizations are continuing to invest in outsourcing to scale, to grow and to compete.
A Global Workforce for Global Business
It’s simple, really—outsourcing helps organizations leverage the power of a globalized workforce and talent pool to create value for their customers and shareholders. Very often the real value of this service is underestimated.
Organizations typically outsource business processes that are essential to daily operations but don’t need to be executed directly. Functions such as customer service, tech support, sales, channel partner engagement and financial processes are typical of this list. Organizations know that these activities can be executed far more efficiently by a specialized group of people, processes and technology than the way they could be executed internally. So, when companies partner with the right BPO vendor, they know they will benefit from their economies of scale and achieve significant cost savings.
However, cost reduction is not the only way great value can be derived from a beneficial BPO partnership. If you are looking to fuel growth by outsourcing business processes, consider a more holistic list of factors to value BPOs.
The Total Value of BPO
In today’s market, every single investment decision you make needs to deliver a defined value outcome. So, when it comes to BPOs, organizations need to meticulously weigh the metrics that determine which activities should be done in-house and which ones should be outsourced. Typically, organizations evaluate the cost of a task fulfilled in-house and then compare it to a relative cost offered by a BPO partner. Seems simple enough.
However, this doesn’t always take into account various intangible or unquantifiable aspects of the decision. Apart from cost savings, BPO services have grown far more nuanced and specialized over the years. BPOs offer organizations value in the form of trained employees, the latest technology, industry-level infrastructure, 24/7 accessibility, data privacy and security compliance, open-ended scalability and an assurance of business continuity—all of which is hard to quantify off hand.
Agents of Customer Experience
You may still tend to think of BPOs as warehouses where agents monotonously process routine and procedural work. This couldn’t be farther from the truth. Today’s cutting-edge BPOs are widely considered employers of choice on their own merits. They are staffed with highly skilled agents capable of handling complex issues. They offer advanced tools, such as artificial intelligence and chatbots, to handle low-effort tasks en masse. They even empower agents with immersive technology like augmented reality, which offers “see-what-I-see” service to streamline support, lower customer effort and improve customer experiences.
Offering companies this flexibility and these capabilities changes the equation entirely. Today’s BPOs are a lot more than just telephone banks. They are fully-equipped customer engagement agencies.
In the 21st century, the value of a potential BPO isn’t measured by how cheap their customer service agents are, but by how effectively they deal with the wide spectrum of customer challenges. As the front line of your company’s engagement with customers, BPOs play an integral role in establishing and ensuring a positive (and mutually-enriching) relationship between you and the customer. Even the most hard-nosed business leaders will acknowledge that great customer experience, if nothing else, is certainly an investment worth making.
Of course, the flip side is, BPOs that compete purely on cost and offer sweet and cheap deals end up compromising on many areas, such as security, quality and upskilling / training agents. As businesses quickly realize that BPOs are an extension of their own brand, often the first point of customer contact, the old style of BPOs are on their way out. With low cost BPOs, you get what you pay for.
Prioritizing Core Competencies and Innovation
In a skill- and knowledge-based economy, organizations need to focus on how each employee spends their time. For maximum productivity and innovation, each employee needs to be focused on their unique core competency. Nonessential and non-core tasks can eat up hours of employee productivity. This is why, more than cost saving, BPO’s ability to enable and generate employee productivity tips the scales when considering the ROI. As organizations offload even more non-critical business functions to BPOs, their operations benefit by becoming leaner and faster. This creates quality time for your core employees to ideate, invest in R&D and truly innovate.
24/7 Operations and Support
Consider this: nearly 72 percent of consumers have made a purchase after their normal bedtime, and 60 percent reported buying something between midnight and 4 a.m. Imagine a customer has an issue during one of these late-night binges. Is your support ready and available to assist them? If not, it could mean loss of sales, compromised customer engagement and even some erosion of your reputation.
Another scenario: it’s the night of the Superbowl or a prize fight match, and your service goes down. Does your cable provider have the support model to handle this issue? And if agents are available, do they have the expertise needed to resolve the issue? Again, there’s a potential for lower customer confidence, negative customer experience and loss of subscriptions and/or future purchases.
Consumers today are accustomed to round-the-clock service. Your most loyal patrons may sympathize with you and even forgive the occasional mishap, but they are unlikely to forget. Organizations need to keenly study the impact that constant, reliable service and support has on their value proposition, and place BPOs in the right context when judging their overall contribution to company goals.
Scalable Skills and Investments
Most businesses, especially small- and mid-sized ones, inevitably go through seasonal cycles that vary in intensity. In peak season, they are overextended and barely able to cope, while at other times they may experience long lulls with serious concerns over capacity utilization and fevered business development. Under these conditions, the benefits of having operational outsourcing can’t be overstated. With nonessential operations handed over to BPOs, companies can rest easy knowing that their cost requirements can also be scaled along with the ebb and flow of the market.
By converting the fixed costs of certain employees and skills into the variable costs of a BPO service, organizations can ensure they operate at peak performance without bleeding expenses, irrespective of seasonal or cyclical fluctuations. This model also allows project planners to scale parts of their technical competency based on their situational needs. If a particular project requires you to recruit employees with new skillsets, you don’t have to wait to hire, onboard, train and test employee performance. You can just find the right BPO partner for a turnkey solution. This scalable skillset acquisition frees companies to make bolder, more ambitious business decisions that can create high impact.
A Perfect Partnership
The role of the BPO is fundamentally changing as emerging technologies find real-world business applications. By automating simple tasks within customer service, IT support and financial processes, today’s BPOs can offer a higher quality of service from highly-trained and technology-enabled agents. The new reality is this—modern BPOs are no longer a herd of people reading from a script. They are powerhouses of specialized experience and training executives that offer organizations an efficient way to stay competitive and agile.
Organizations looking for greater operational flexibility need to partner with the best. Shifting their perspective on BPO is a large part of that evolution. It’s not too late to consider getting with the program to develop long-term strategic partnerships that can help your business achieve its full potential.
For more information, reach out to one of our BPO specialists to discover how a modern outsourcing partner can work as an extension of your team.