Do We Need A BPO Revolution?

By Adam Foster, HGS CEO Europe


When I first started working in the business process outsourcing (BPO) sector, customer experience (CX), as a well-known concept, didn’t exist. If I go back to the start of the millennium, outsourcing of sales and support was often undertaken by businesses to get rid of a problem, with offshoring also being a convenient way to reduce the cost of this function. How things have changed. Today, CX is, for many businesses, a boardroom priority, with customer expectations increasing on what seems like a daily basis.  

The strategy of yester-year generally worked because customer interactions were simple, easy to define, and limited to a small number of channels. But the contact centre is no longer a simple back-office function, and the expectations of customers using this function have changed beyond measure.

Today customers are demanding a much closer relationship with the brands they love, and that means constant communication across a wide variety of channels. The interface between the brand and customer has assumed a new importance. Customers want to interact at any time and on channels that they choose. Customers familiar with Snapchat and Instagram will never pick up the phone and search for a phone number. Brands need an omnichannel strategy that ensure customers get the same great experience however and whenever they get in touch. This experience is now one of the primary drivers of how customers perceive your brand—beyond your clever advertising or a fancy logo. Simply put, if you don’t deliver a great experience, then your customers will move on.

Most of the BPO companies with customer service expertise have stepped up to this challenge. Look at HGS and other providers, and you will see highly sophisticated services that take advantage of many emerging technologies complementing the traditional activities delivered. Augmented reality, virtual reality, big data, data analytics, robotic process automation, artificial intelligence, and machine learning. We are becoming experts in so many new areas of technology, and many IT specialists now believe that it is CX experts who are driving innovation in new IT processes.

But there is a problem. BPO industry commercial models have not evolved in line with these developments, and the value of this expertise is being undersold or misunderstood. This enhanced approach to CX creates more value for our clients, but most commercial frameworks are based on headcount. Unfortunately, it remains a fact that most new business is won by offering the lowest possible price, rather than offering a client the ability to create the best possible experience for its customers. In many ways, it can be argued that the service offered by BPO companies has undergone a complete revolution in the past 20 years, but the procurement methods have remained the same.

In my opinion, if a company wants to work with a customer experience expert, then it hurts them to use a procurement-led approach that places importance on price over value. We are focused on adding true value for our clients by designing bespoke solutions that enable customers to engage with the brand using the most suitable channels and seamlessly integrating technology, driving loyalty and attracting new customers. This, in turn, is leading us to develop new commercial models with our clients. These models are designed to reflect the value we are helping to create, drive the right partnership behaviours, and, most importantly, deliver valuable business outcomes. However, this can be a long and painful process where the procurement approach is not aligned. Unless this relationship evolves, I see several problematic outcomes:

  • M&A—There is a constant wave of market consolidation, with BPO companies attempting to get bigger through acquisition so they can use scale to stay one step ahead of this problem, providing less choice for brands.
  • Cost—Lowest prices, rather than best customer experience, continue to win contracts, reducing investment in innovative CX solutions and companies competing in a race to the bottom.
  • Careers—This should be a golden era for contact centre careers, with a need for brand ambassadors (not service agents) and new career opportunities within the fields of AI and data analytics. However, where cost is the primary driver, minimum wage roles will continue to be the order of the day. As a result, hiring the right talent to progress within the business becomes more challenging. There used to be an agent-to-CEO career path, and we need to get back to this valuation of exactly how important the front-line roles really are.
  • Channel Shift—Voice calls still make-up the majority of customer contact, but that is changing fast. Will we soon fall off a cliff and find that most customers want digital interactions, and the big brands are just not ready for it?

I believe that it’s my job to invest in my people, the innovation we can bring, and the value we can deliver to our clients. However, companies buying services from companies like HGS also need to recognise that the expectations of their customers have changed dramatically since 1998. It’s time to stop thinking of BPO as just contact centres and a cost reduction opportunity. We are your partners in your CX journey.

HGS is, and will continue to be, a partner that is able to stay ahead of the emerging technologies and evolving customer expectations. I sincerely hope that the market evolves to focus on more than price alone. It’s like comparing an Apple device with a Samsung and concluding that the cheapest device is best. Consumers naturally understand the difference between price and value, and it’s time for businesses to also embrace this, when it comes to evaluating who can help to improve their customer experience.

Do you think we need a BPO revolution? Please leave me a comment or contact me on LinkedIn if you would like to discuss the subject further.


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