The days of the iconoclastic lone entrepreneur, bravely sailing out into the volatile marketplace without partners, are gone, if they ever really existed. We are all connected now, all 7.7 billion of us, allowing companies to tap into a global talent market that can serve various skill sets needed for every stage along their growth journeys. Today, businesses rely a solid business process outsourcing (BPO) strategy to scale processes faster than they could achieve on their own.
Global outsourcing has become much more practical in recent years as supply chains upgrade and logistics digitize everywhere. The BPO market is on track to grow at 11 percent CAGR up to a $52 billion market cap by 2023. These companies are prioritizing the customer experience by seeking out experts in manual tasks and business processes no matter where they are.
Arranging the right combination of back office partners can make all the difference in the terms of financial performance and operational efficiency. In selecting the best BPO partners, make sure the following considerations come into play:
1. How well do they communicate?
Companies everywhere are preparing to meet the emerging global talent shortage. One of the most important steps an international management team can take is to do the research to manage cultural differences and run engagements smoothly. By its essential nature, BPO engagements involve working across boarders, which makes it necessary for intelligent BPO companies to manage issues such as communication, expectation management and escalations (getting managers involved with issues). Some cultures tend to shy away from escalations more than others, so it makes a big difference how this is handled based on customer expectations.
2. How focused are they on helping you be more efficient?
Many outsourcing companies are in denial about the importance of automation in BPO and only look to increase the headcount of the team. Instead, it makes more sense to align with a partner who can make processes more efficient. That normally means introducing new technology wherever possible to make all processes more efficient in the future, even if it means a smaller team size at some point. This is what you would want from a true long-term operational partner.
3. What’s their record on data protection?
Ask the hard questions about the partner’s IT infrastructure and policies on assuring continuity of service. Access to essentials like connectivity and data storage can vary widely from country to country, or even among BPO partners within a specific field. A survey by the National Outsourcing Association (NOA) found that the top 3 legal matters that concerned managers the most about BPOs were:
- the ability to enforce contracts with offshore providers – 93 percent;
- data protection during cross-border transfers – 93 per cent; and
- technology transfer laws – 83 per cent.
If the partner seems reluctant to answer or uncertain about their IT infrastructure, that’s a red flag. Business partners operating outside North America and Europe have very different traditions and regulation environments concerning data security. Make sure they have aligned their standards with those of major international enterprises.
4. How do they ensure quality?
Consumers want consistency. Opening up a business to BPO partners means letting go of some control over critical metrics that drive the success of the business. That can be difficult, but it becomes much easier when the partner has quality assurance practices in place that they can share with you. Evaluation of quality factors should include details of BPO operations that include standardization, automation, integration, flexibility and innovation.
5. Who are their references?
This is another area in which it can be difficult to judge the BPO partner without some cultural understanding of the region where they primarily operate. After you get references from the partner, it may be necessary to do more research into the authority of those businesses. Certifications are important, but it takes a certain level of awareness to determine which certifications are meaningful and the equivalents to standard governing bodies in the partner’s region. Full disclosure and transparency are not recognized as goals in many cultures and it is common for many companies to restrict access to their customer info, so don’t be surprised if this info isn’t readily available. Great partners are proud of who they work with so they should be able to provide basic information.
BPO’s Role in the Battle for Customer Experience
Customer experience is the new battleground. It’s getting increasingly difficult to compete on quality because many companies use the same supply chains. It doesn’t make sense to compete on price because that is a race to 0 margins where nobody wins in the end. Instead, companies that excel in creating an unforgettable customer experience are the ones winning their respective markets.
Currently, 67 percent of marketing leaders surveyed said that customer experience is their main point of differentiation in a survey by Gartner, and that percentage is expected to rise to 81 percent in 2019. That means that the business processes have to be reliable and cost effective, so that businesses can concentrate on getting the interface with the customer just right. Those who outsource intelligently to the best partners can put that part of the business into cruise control and turn their attention back to what really matters.