The Win-Win Outsourcing Formula

Submitted by Xceed

Outsourcing has always been – and still is for a lot of companies – one of the ultimate options to help their business grow, become better, and competitive against the global market.

This is not only because of the real interpretation and meaning of “give it to the experts” being sure they will do things right. Rather, it’s the value that outsourcing firms can add to their partners and more of “doing the right things!”

Outsourcing firms and BPOs however, caught advantage of that incremental demand over this industry by investing, growing and expanding. Therefore, competition became more aggressive, fierce and customers became more selective to the partner who gives the best value.

To live up to that very competitive market, here are some tips and examples on how to add real value to your partners for a win-win outsourcing model.

Knowing Your Client Well

The number one exercise is to know your clients’ needs well in order to be able to cater for them – that goes beyond contractual objectives and KPIs, of course!

One of the good things to do is to look at your partner strategy, their vision and mission statements, they tell a lot about where your partner wants to be, how, and stressing over some goals like “best quality” or “value for money” or “best customer experience” … etc.

This will help you shape and prepare a long-term value proposition for your partners, help them grow and compete in the global market, as well will keep you as their vendor of choice and that is a win-win partnership model.

Why Do Organizations Originally Outsource

Being able to answer that question generally –and for your partner specifically – will cut a long story short in your vendor-client relationship journey. Here are some common reasons why companies outsource:

  • Lowering costs of operations and labor
  • Focus on core business
  • Access to world-class capabilities and knowledge
  • Maximizing capabilities with no or very minor investment
  • Risk mitigation through offshoring to multiple locations\sites

The above reasons are the most common, however, there is always a heavyweight reason or two for your partner that you need focus on, especially for those who outsource for the first time, understanding them well will help you maximizing your value and making this outsourcing model worthwhile.

It Takes More than Simple Analytics

Outsourcing is all about leveraging capabilities, and as a BPO vendor you are expected to provide best in class performance, one of the most critical components of performance management – after measuring data of course – is analyzing them to understand root causes and various behaviors.

Six Sigma DMAIC and DMAIDV approaches gave the clue when it comes to data manipulation and analytics, it became crucial to have lean qualified resources to improve your process with new techniques that companies usually lack.

One good example we have, for a company moving from captive customer care to outsourcing for the first time, we had this classic debate over AHT (average handle time) as it is a direct driver of workforce and consequently costs!

They made their point, and we fully understand it, they are used to perform at 130 secs per call and expecting vendor not to exceed that number to lower their bill amount.

As an expert, you should go back to analytics to answer the questions of, “What the ideal AHT should be in an inbound operation where cross and upselling is performed within the call?”, running multiple correlation analysis among metrics showed strong positive scores between AHT and Sales until certain point where any + in AHT will not result in + in Sales (see graph).

Analysis and process capabilities showed 150 secs/call is the ideal AHT to get the best sales where more sales = more revenues for our client.

Running a simple math, the extra cost is (20 secs) in workforce terms was just a drop in the water compared to huge return of sales revenue, and that’s the real value behind analytics that emphasizes a win-win outsourcing model.

Technology …  Matters

The fast-paced technological advances made it obvious for the need to outsource to get advantage of cutting edge technologies without directly investing in them.

What was “Nice to Have” yesterday, is a “Must Have” today and so on, staying on top offering your partners the advantages of latest technologies 360 spectrums (IVR – CRM – ACD – Dialers – CTI – Recording – OMNI – Self Service – Cloud Software – etc..) will enable you to grow as well as your customer for a win-win relationship.

Driving Up Customer Experience (CX)

The real power of technology is that it takes customer experience to a totally different level through OMNI channel support, it helps to deliver a positive, meaningful experience throughout all different channels and interactions.

Yet it still about people not only technology because customer experience is reliant on those memorable employee-to-customer interactions.

Since reducing customer efforts is one of main CX drivers, BPOs got to figure out the best balance between technology, process, and people to deliver not only a less effort; rather a delightful journey for the customer.

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