Nearshore Americas
bpo vendor selection

BPO Vendor Selection: Top 10 Mistakes and How to Avoid Them

Whether you’ve made the big decision and you’re ready to outsource, or the last outsourcing decision did not work out as planned, now comes the tough part: BPO vendor selection.

Companies that are new to this journey can often make mistakes in selecting a BPO vendor so here are ten common pitfalls to avoid in the process, as well as some advice to get you on the road to a valuable outsourcing relationship.

Choosing the wrong market

When choosing a BPO vendor you’re also committing to a specific location. Beware of those providers who pump their brand and obscure the host country, and who are unwilling to put the local workforce and the culture front and center.

As a customer, there are a lot of criteria to digest, such as demographics, time zones, education systems, cultural idiosyncrasies – to name only a few. One option is to engage a neutral third party for an independent assessment. Ultimately, you will want easy access, excellent language skills, high aptitude for industry-specific contracts, and agents who are happy to work for the provider.

Low cost, at any cost

Basing an engagement exclusively on cost is a big mistake. While cost is a critical metric, the ultimate goal should be a high-quality service that reflects the value of the investment.

BPO vendor selection should be part of a strategic vision that looks at overall return and long-term business success. You want the right services that accurately reflect the scope of your requirements. You also want a provider that is confident in their ability to deliver, and that is willing to take responsibility for ensuring value.

Missing the importance of culture and values

A successful, long-term engagement can only happen well when culture and values align. Call centers, for example, are expected to properly reflect your brand, and having the right cultural fit is critical. Oftentimes this “soft” area is overwhelmed by emphasis on contracts and SLAs, but, at the end of the day, BPO is about human contact.

Have a representative from the call center spend some time at your company, and put your trainer on site during the launch. This allows you to get a deeper sense of your compatibility with the provider’s management team, and whether the workforce is content and motivated.

Not explaining or aligning your performance expectations

To some extent, all vendors need a degree of direction and guidance in order to succeed. Before you engage a BPO provider, it’s a good idea to have a clear sense of what your performance expectations are. This then allows for a fact-based discussion with the vendor, which may reveal both areas of concern as well as areas where performance can be improved.

A trusted vendor should also bring recommendations and best practices from other existing clients. Knowing your goals allows for the outsourcing engagement to be as effective as possible, and is best exemplified by specific performance metrics, as opposed to vague aspirations.

Skipping a site visit and not walking the floor to meet agents

During any BPO vendor selection consideration there is immense value in making a site visit to walk the floor and meet the agents, because it allows you to observe agents responding to clients in real-time, and assess the quality of the work environment.

Make sure you give yourself plenty of time. While first impressions are important, and you can get a read within only a few hours, it’s helpful not to be rushed. You want to be sure that the work culture is friendly, proactive, and flexible.

Of critical importance: give yourself the opportunity for private, informal focus groups with agents and floor management. This way you can determine the agents’ job satisfaction, their relationship to management, and their suitability as representatives of your company.

Not asking the vendor for recommendations

Make no mistake, avoiding recommendations from a vendor is a high-risk approach. This is a mutually beneficial relationship, and an outsourcer’s advice and input is critical to its success.

Getting to know front-line management – and asking questions with regard to issues such as hiring, onboarding, and training best practices – provides an opportunity to build confidence. From here, a client can lean into the vendor, receiving recommendations that add value to a successful engagement.

Undervaluing certifications

However you go about BPO vendor selection, you want a provider that has the right certifications to handle the demands of your business.

Central to these is Payment Card Industry (PCI) Level 1 Certification, the highest level of PCI best practices, which requires a formal, independent third-party certification, and includes rigorous scrutiny to safeguard payment information – such as penetration testing and internal scans – as well auditing of in-depth business processes.

Another critical certification is Service and Organization Control (SOC) 2. SOC 2 certification is issued by outside auditors, and has five “trust service” principles: security, availability, processing integrity, confidentiality and privacy.

Furthermore, a provider can add value with industry-specific compliance, such as with the Health Insurance Portability and Accountability Act (HIPAA).

Failing to weight and calibrate selection criteria

Not all selection criteria are created equal, and a business can expose itself to undue risk by undervaluing – or missing entirely – important criteria during the BPO vendor selection process. By not weighting and calibrating these criteria an organization can also add to cost, and waste valuable time on issues of less importance.

It is therefore critical to assign weights in areas such as leadership experience, IT uptime, and reporting – among many others – to ensure nothing is missed. This is your chance to correct an incorrect choice before and re-evaluating selection criteria from the past. Calibrating before the start of the BPO vendor selection process also removes a degree of human bias, and adds clarity to the process.

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Lack of due diligence

If the right priorities are set, due diligence can be pursued in a timely manner, without unforeseen expense and risk.

A common mistake is to neglect working on internal IT requirements prior to selection. Another is a failure to review or calibrate the implementation plan.

The client should retain the skilled resources necessary for this level of preparation, including the ability and authority to manage and communicate desired changes, both internally and to the provider. Also take the time to call on references from existing or past clients.

Not mapping the customer journey

You can’t know the right process to outsource if you haven’t mapped (or, in some cases, remapped) the customer journey. With a proper understanding of the customer’s experience, you’re in a better place to determine which processes you want to transfer to a provider, with clear specifications that allow for an understanding of the overall benefits, including customer retention.

By knowing where customers are in their journeys, a provider is better positioned to deepen the relationships, and to engage in meaningful interactions that highlight the benefits of a product or service.

Scott Newman

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