Adding Value to Business Process Outsourcing
By
Steve Loring
Business Development Manger, Customer Interaction Solutions, Dimension Data Americas
These are, to cite the old Chinese curse 'interesting times' for organizations
seeking to outsource their contact center services and for
business process outsourcers (BPOs) alike. That is because serving
end-customers has never been more challenging. Today's buyers are savvy,
proactive, quality conscious but price-sharp, unimpressed with brands unless
they consistently deliver, and whose loyalty is as good as their last interaction.
These individuals also utilize a growing
and bewildering array of channels. And as
shown by the popularity of the Do Not
Call list in US, which will shortly go live
also in Canada, customers prefer to reach
out rather than the other way around, unless
they want you to.
Yet as firms, including nonprofits and
institutions move their strategies towards
meeting these customers' needs, by investing
in tools such as in CRM, call recording
(see related article), speech analytics, and
performance and workforce management
systems at their contact centers, they have
been moving away from BPOs for such
high-value interactions.
The BPO firms are now in what Bob Lyons,
a former senior executive with Convergys
and TeleSpectrum (now TRG Group) who is
general manager and vice president of Avaya's
Contact Center division calls "a paradox".
BPOs cannot afford to invest in the latest
tools without strong assurance that clients
will want and pay for them, yet clients will
not do business with these BPOs unless they
have those tools. Consequently organizations
are now bringing in-house those calls that
drive customer satisfaction and outsourcing
those that are mainly transactional.
BPO firms are then let with little more than
labor arbitrage and flexibility to offer potential
clients. They are hindered by strong price
pressure: industry reports indicate the average
rate in North America is $25 per agent/hour
while historically typical rates were in the
mid 30s. At the same time Indian programs
demand about $11 per agent/hour while
those in The Philippines command about
$11.50 per agent/hour. Together that leaves
many BPO with very little resources to buy
those solutions that clients want.
"Companies are beginning to realize that
customer retention is also important in
addition to pricing and offerings as value
and marketplace differentiators," says Lyons.
"Those that do a lot of outsourcing are
now demanding that value proposition.
Canada's Domestic BPO Market
Canada's currency relative to the US dollar has risen to the point
where on some occasions it is more valuable, which has made it less
viable for nearshored programs.
The flip side to the strong Canadian 'Loonie' is that Canada has
still, relative to the US, a strong domestic market thanks to its
energy and more stable housing sectors.
Outsourcing is one of the best means of reaching out to Canada's
33 million consumers, and to its business and government sectors.
BPO firms who know Canada can navigate your program through
the country's two official languages, cultural issues, the metric system,
and regulations, such as the new Do Not Call list that comes
into effect Sept. 30 (see related article).
US-based BPO firms with operations there are aggressively pursuing
Canadian business. ICT Group is netting results from this strategy.
Canadian revenues help drive a 33 percent increase from international
sources in the second quarter 2008 from the same period in 2007.
Earlier this year Convergys appointed Igor Sarenac as Vice
President, Business Development, for Canada, placing special
emphasis on attracting and expanding business among companies
headquartered there.
There are also many Canadian BPO firms that offer an increased
range of services. As one example, 24-7 INtouch has launched
a value-added partnership program that provides clients with
complete end to end solutions through a one vendor relationship.
Pre-screened quality outsourcing solutions through a single vendor
make it beneficial for clients to easily outsource and manage all of
their unique business needs.
"We recognize our strengths, and don't attempt to offer
everything ourselves, "says Greg Fettes, President and CEO
of 24-7 INtouch. "Instead, collaborating with strategic and
complimentary vendors allow us to offer a total solution our
customers can depend on."
Boutique BPOing Boutique
BPO firms are smaller companies whose value propositions stress top level
high-customizable quality customer care and satisfaction and personalized attention
to clients' needs. They are noted for loyal, well-trained and experienced agents and
supervisors backed by quality assurance systems. They can provide the ideal adjuncts and
partners to best-in-class in-house contact centers. While their rates are not the lowest,
they deliver value for money.
"Boutique contact centers are better suited to enable customer care and satisfaction
because they are more focused, hiring and keeping people off the beaten path, and they
don't need to hire thousands of people," says Bob Lyons, general manager and vice president
of Avaya's contact center division.
InfoCision is one such boutique BPO. It specializes in customer acquisition, care and
retention, nonprofit fundraising, and product and pledge fulfillment. All of its contact
center agents relate to American end customers; its services are delivered via 32 small
facilities located only the USA. It has won Customer Interaction Solutions' magazine's
Marketing Via Phone (MVP) Quality Award every year since its inception.
Outsourcers say 'we can do this in different
regions at lower cost'. So what is happening
is that companies are saying 'I'm not getting
the innovation with you so I can do it
myself and leave you with handling just the
transactions with my technology.' "
The drive to value-add
BPO firms, realizing these trends, have been
stepping up their quality and services. They
have been expanding into areas such as applications
hosting, back office management,
billing, conferencing, consulting, data analytics,
HR management, and market research.
Convergys offers one of the largest menus
of value-added services of any BPO firm:
from billing to HR and to speech-recognition-
enabled voice applications: the latter
significantly bolstered by its acquisition of Intervoice,
a leading automated voice platform
supplier, and to training.
Convergys has been experiencing growing
demand for its behavioral intelligence (BI)
services, reports Ryan Pellet, VP Global
Consulting Services.
BI captures data from interactions occurring
in more than 30 different channels,
from contact centers to social media, viral
marketing, and to games and maps as to
how customers are interacting with those
channels. That helps enterprises optimize
their marketing, customer acquisition and
customer service strategies and decide how
much resources to spend and where.
Convergys has also been applying its valueadd
services, such as HR management, to its
contact centers. They have bolstered their
quality to the point where the BPO firm
has won price increases from its clients that
helped offset higher costs.
In turn, the high quality contact center care
has led to increased interest and demand
for value-added services, thereby creating a
virtuous circle.
"We drink our own Merlot," explains Pellet.
"We apply the same tools that we offer and provide
to our clients on ourselves. If we continue to
perform at or above the market standards then
we are invited to do the value-added pieces."
LiveOps continues to do likewise. The pureplay
home agent BPO firm has added silent
monitoring of agents, which enables managers
to identify service issues plus agent readiness
assessment testing that helps ensures that agents
are ready to go live with end-customers. These
tools are also on the Summer 08 release of
LiveOps' hosted On-Demand Platform that it
markets to other contact centers.
APAC Customer Services is seeing increased
demand for handling back office processes
such as claims, receivables, medical bills,
e-mail, and USPS for clients.
"We're providing a one-stop shop for our
clients with these BPO services, taking
on routine tasks that cost them money to
handle, in addition to our contact center
services for them, which offers them greater
convenience," explains vice president of
operations Rebecca Lucera.
Avaya's Lyons is skeptical about BPO firms'
ability to successfully branch out into these
other areas as potential buyers may question
their competency to deliver because they
have not been present in these fields.
"These firms still face the same paradox as
with value-added contact center functionality,"
says Lyons. "To add value beyond labor
arbitrage they need to integrate these services
and provide business consulting so that they
can provide a premium offer that allows
them to capture a price premium. Yet the
cost to build or buy such expertise far exceeds
the expected return so again you are left with
a business model focused on labor arbitrage."
In the case of Working Solutions, a pureplay
home agent-based BPO firm it is the
company's clients more than marketplace
expansion desires that drove it to start offer
hosted technology solutions.
The firm provides call and contact routing
(TDM or IP), IVR, and speech analytics
including real-time alerts to supervisors for
customers who may require escalations or
specialized handling.
"We've been providing these services to
clients who utilize our agents for quite some
time," says CEO Tim Houlne. "But we've
seen a growing number of companies ask us
to provide software and technology for their
internal call center operations."
Mergers
The low margins, plus ease of entry, and
many players along the retiring and cashing
out of companies' founders have made mergers
and acquisitions the norm in the BPO
industry. Yet while they have led to bigger
companies with more clients and workstations
it has not necessarily led to greater
market leverage, and higher prices.
"Companies will typically want at least two
outsourcers on a program so if your two
outsourcers who are merging happen to have
the same customer, companies will pull that
work to someone else, which helps keep
prices down," explains Lyons.
The acquisition of SITEL by ClientLogic last
year, now called Sitel, is arguably quite different.
It has brought together complementary
assets, capabilities, and client lists, with very
little overlap. And as such there has been
negligible client attrition.
Outsourcing Your
Help Desk
There are times when your contact center
needs help with IT issues yet your
help desk is swamped. And if you are
with a small/midsized firm you may not
be able to justify having a full-time IT
team yet you need their services when
your operations go buggy.
Help desk outsourcing enables you to
quickly and effectively resolve many
problems for less money compared with
expanding your IT desk or bringing in
an outside onsite support professional.
The Utility Company has made it easier
for more firms to benefit from help desk
outsourcing. It has come up with a new
service aimed at small/midsized businesses,
1-866-My-Utility Per Minute
Live Helpdesk Service. It provides
remote monitoring and management
for IT (network, desktop, security, and
storage), business applications, Web/
Internet, copier/printer and telecommunications,
8am to 8pm ET.
1-866-My-Utility Per Minute dramatically
reduces waiting times and time to
resolution, with a 50 percent -80 percent
savings over typical break/fix support
contracts. There are no minimum charges
or travel, the lack of latter also makes
this option environmentally-friendly
with no pollution or gas consumption.
Amit Shankardass, Chief Global Marketing
Officer, reports that out of the 450 clients
brought together by the merger, only nine of
them used both firms. The post-merger Sitel are Fortune 500 companies.
ClientLogic brought to the table strong
inbound customer care, cross-sell/up-sell, support,
plus data management and fulfillment,
he explains. Legacy Sitel brought in robust
outbound customer acquisition, billing/collections,
customer care and IVR competencies.
While ClientLogic had strengths in the
travel/transportation, ISP, and retail markets,
legacy Sitel delivered heft in financial services
and utilities. The new Sitel is now pursuing
the energy and healthcare verticals.
"We've experienced strong growth, and so
have our clients because there was very little
overlap between the legacy firms," says Shandarkass.
"We're now able to offer and deliver
to both sets of firms' clients and to prospects
a complete range of global BPO services that
complement each other under one roof."
Near/Offshoring
The increased emphasis on customer service
and quality is impacting BPO offshoring
and nearshoring.
There have been many published reports of
dissatisfied customers, and companies with
having their calls handled in India. Clients
and BPO firms are in response moving their
more customer-sensitive work to other nations
and in some cases back to the US.
The chief offshore beneficiary is The Philippines,
which has a strong customer service culture and
whose residents have a greater cultural affinity to
the US thanks to longstanding military/political
and increasingly family ties between both nations.
Yet there are growing concerns that The Philippines'
labor market may soon be saturated,
at which point costs will begin to escalate.
The Everest Research Institute reports that
offshoring including to India have been successful
though for those BPOs and companies that
made their metrics quality-focused, such as using
customer satisfaction scores, and had agents undergo
pre-going-live simulation-based training.
Meanwhile the weak US and stronger Canadian
dollar has ruled Canada out as an alternative.
Many clients have pulled nearshored programs
from there, forcing BPOs such as Convergys, ICT
Group, TRG, and West to shutter contact centers.
Africa and the Middle East are finally emerging
as a quality offshoring option for North
American clients as savvy BPO firms, seeing
what has happened elsewhere, are marrying
the region's large supply of well educated,
highly motivated, and affordable labor with
quality-oriented recruitment, training, and
agent retention strategies.
BPO at Home
There continues to be strong move to bring
BPO home: to those of its agents. The home
agent value proposition is access to larger, higher
quality and more flexible labor pool without
the capital costs of formal contact centers.
West, which has had a home agent program
for the past several years, has addressed the
issue of data security, which has been a key
inhibitor on the part of many organizations,
especially financial services firms, in letting
these individuals handle their calls.
Its new West at Home Locked-Down Desktop
Security Environment transforms employees'
home desktop computers into a West proprietary
environment. When its home agents begin work,
the software only runs those applications or processes
explicitly permitted to be operated, which
locks down their computers. They cannot access
other files, folders, or programs or go to Westunauthorized
websites during this time, nor can
they download, store and/or print information.
When the agents have finished work, their desktops
are restored to their former state.
APAC is taking a slightly different road. For the
past four years it has had a similar large center/
larger community-home agent constellation
model to what Sitel has recently adopted. This
fall APAC is branching out into small towns,
with storefront locations of 10-12 seats that
have training and HR functions that in turn
will service outlying home-based agents.
"Our clients will benefit from this strategy
because it will be reaching out to a high
quality labor force that has not been tapped
by contact centers because these communities
have been too small to support traditional
facilities," explains Lucera.
There are times when your contact center
needs help with IT issues yet your
help desk is
The following companies participated in the preparation of this article:
24/7-INtouch
www.24-7intouch.com
Apac Customer Services
www.apaccustomerservices.com
Avaya
www.avaya.com
Convergys
www.convergys.com
Everest Research Institute
www.everestresearchinstitute.com
ICT Group
www.ictgroup.com
InfoCision
www.infocision.com
LiveOps
www.liveops.com
Metro One Telecommunications
www.metro1.com
Sitel
www.sitel.com
The Utility Company
www.theutilitycompany.com
West
www.west.com
Working Solutions
www.workingsol.com
Xceed
www.xceedcc.com
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