Forget About Cost, What Does Your Prospective BPO Provider Really Bringing to the Table?

Obviously one of the most important reasons today’s executive chooses to consider BPO is for the potential cost savings offered to the organization during the long term. However, cost is just one consideration, and in many cases, lower cost per employee hour isn’t even the primary motivation.

Factoring Expertise

Sometimes expertise is available offshore that just may be too hard to find locally, or a preferred provider may be located abroad and establishing a business relationship with that company necessarily means utilizing their services sourced either in their home country or a even in a third location.

Language skills are also often a motivation driving a particular outsourcing choice, and within the past decade, the importance of culture and social acumen in customer-facing operations have been duly acknowledged.

Still, just as a business doesn’t source other professional services suppliers (law firms, consultancies and accountants, for example)  based on the lowest cost  per hour, neither should one enter into such a critical relationship as trusting entire business processes for one’s organization to the bargain basement bidder.

To gain valuable insight on the various factors that go into a holistic selection process for a BPO partner, BPO Outcomes  spoke with Sonya Tolson, the Continuous Improvement Processes (CIP) Champion for KGB, a global enhanced information services outsourcing provider.

‘The Big 3’

“The three most important factors that I have found companies look at when choosing a BPO provider are operational excellence, recruitment, and technology,” said Tolson, who has spent more a decade with KGB and its predecessor, InfoNXX; a pioneer in the outsourcing of “411” directory services for telecom providers.

“By operational excellence, I mean things like efficiencies, quality of service, and not only these, but quality of the metrics provided to measure delivered service; state of the art workforce management tools, and standardized processes to make sure that the services provided fit into the customer’s larger business ecosystem,” she continued.

Tolson elaborated that without equal or better quality than can be obtained domestically, any outsourcing effort is doomed to fail in the long term.

“Recruitment is critical,” Tolson said. As VP of Human Resources for InfoNXX before the merger with KGB, she speaks from experience.  “Often a company chooses a BPO firm because they have access to an ample labor pool.  We have call centers throughout the globe for example, so we can make sure we are providing the best cultural and capabilities fit. Sometimes language skills are needed, or just as in India there is a considerable pool of IT talent, certain markets want a Latin American presence to provide customer service to the bilingual domestic (US) market.”

Tolson adds that strong employee retention and recognition programs, along with a committed effort at morale building, are important to reduce turnover and employee churn. Even though it is easy to consider this an internal personnel matter for the outsourcing provider, it affects the quality of delivered services so the BPO customer should take heed and pay attention to what the provider offers employees in these areas.

“Technology is of course, critical,” Tolson stated.  “Does the provider offer state of the art systems?  How easily do those systems integrate with the client’s IT environment?” Tolson emphasized the importance of a solid disaster recovery program being in place, which is critical even domestically. When relying on infrastructure in what are frequently developing countries for outsourcing, sound disaster recovery becomes mandatory.

“ISO security compliance should be carefully audited, as a customer cannot necessarily rely on the laws and protections they enjoy domestically,” said Tolson. “In a nightmare scenario a customer is faced with international litigation so the objective should be to avoid such an outcome in the first place by conducting careful due diligence on the front end.” A provider should offer a comprehensive security plan covering areas such as disaster recovery, security breaches, and when appropriate, service level agreements.

“Cost is always going to be a factor in the grand scheme of things, but the outsourcing customer needs to remember that cost is almost never the same thing as price,” Tolson concluded.

This post first appeared in our sister publication, BPO Outcomes