How to succeed at business process outsourcing management
Business process outsourcing (BPO) being the process of engaging a provider external to the business for handling certain business processes, is perhaps well understood. The provider could be an external company with no relation to the outsourcer except commercial, it could be another unit within the same company, or it could be another company with ownership similar to the ownership of the outsourcing company.
While the company and responsibility structures might differ, as long as the engagement is professional, the roles and responsibilities of the two parties to the contract are likely to be similar.
The outsourcer will identify the business processes they seek to outsource and ensure that the partner is well trained to take over the responsibility of running them henceforth. They will also define a reporting and oversight structure through which they can ensure that the partnership is yielding the desired results for them.
The partner will ensure that they understand the ins and outs of the process they seek to take over so that they are able to execute on the contract as per expectations. They will also seek to create a discussion forum where they are able to receive inputs from the client in case of need and highlight issues encountered.
Its benefits to the outsourcers are, perhaps, also well understood, and even its limitations.
But what is business process outsourcing management?
Running a business is a responsibility. In a competitive world, running a successful business is not easy. Though we hear of successful companies, many companies and businesses fall by the wayside, unable to face competitive pressures. We never hear about them. It requires ensuring that the many moving parts that need to come together to create a successful business, are able to, on an ongoing basis.
Some of these moving parts are the business processes that are outsourced. Both outsourcers and vendors need to ensure that the business processes are working along lines designed to create success for the business.
While outsourcers will create checks and balances on their side to ensure that the work being done by the vendor meets requirements and expectations, vendors need to put in place a robust management structure to ensure that they are able to deliver on requirements and expectations.
Moreover, all work will need to be performed at price points acceptable to both parties. Clients of oWorkers have regularly reported savings of almost 80% when outsourcing work to them. This is particularly true of clients from Western Europe and the US.
This article looks at the business process outsourcing management from the point of view of a vendor and what he needs to do to ensure delivery.
Workable contractual terms
A contract is usually the beginning of a commercial relationship. It defines the expectations in terms of the work to be done, the responsibilities of the parties as well as the monetary compensation for the work. A workable, reasonable contract is the starting point of a healthy, mutually beneficial relationship.
Outsourcing is not the uncorking of the magical genie for your business. Unrealistic expectations will sound the death knell of the arrangement. What occasionally happens is that outsourcers believe that by putting in stringent conditions that the vendor cannot meet will put them in a position of power from where they can dictate terms. Unfortunately, on occasion, desperation for business results in vendors agreeing to draconian terms that they have no hope of meeting. They’d rather face financial ruin at a later point, while hoping that they will somehow be let off the hook by a benevolent client, despite all evidence to the contrary. It might be better to walk away today, and fail fast, which seems to be better and a philosophy propagated by startup gurus, instead of dying a slow, painful death over an extended period of time.
For a professional relationship of equals to flower, the contract has to be demanding but workable.
With a leadership team that has over 20 years of hands-on experience in the industry, oWorkers are well placed to understand contractual terms and often guide first-time outsourcer clients on the subject of contracting. oWorkers is a firm believer in the fairness of contracts and does not hesitate to walk away from overbearing terms and conditions insisted upon by some clients.
Effective transition of knowledge
As the owner, it is expected that the client will possess all relevant knowledge about the processes that are outsourced to a partner, at least at the starting point of the relationship. Of course, it is possible that as the relationship grows and matures, and there is confidence in each other, the partner could end up being the expert on the nitty-gritty details of the processes. But that would be business risk to be handled by the outsourcer, and could be the subject of another article.
A kind of ‘lift and shift’ operation needs to kick in for the contracted work to commence. What was being done under the watchful, or otherwise, eyes of the client, will henceforth be done under the (hopefully) watchful eyes of the vendor. Business process outsourcing management requires that this be done in a manner that reduces, or eliminates, disruption in work and enables the vendor to ‘hit the ground running.’ It is a critical skill, and referred to as ‘transition’ under the larger discipline of ‘Project Management.’
oWorkers boasts of a project management team that has successfully handled over 50 transitions of varying degrees of complexity, across different industries and functions. It has been a key to us having many satisfied clients over the eight years we have been in existence. A client’s delivery experience begins the moment a contract is signed and the transition process is initiated, and our project management team ensures that there are no loose ends.
Access to deep talent pools
Business process outsourcing management is dependent on people. Eventually, the vendor will need people to run it. What could be automated has already been automated by the client. They have engaged a vendor to carry out the manual processes. While surely with the relentless march of technology more processes might become automated or even redundant, as of now they will need to be handled manually. And vendors might want to be thankful as that is one of the primary drivers of their revenues.
Not only are talent pools needed to staff positions, but also to restaff them. Attrition is a perennial bugbear of the industry. While vendors may laugh it away as “it is a feature, not a bug,” it is a drain on resources and also on productivity, as new resources take time to come up the productivity curve. Significant management attention is also diverted to ensuring right staffing, that could otherwise be used for revenue generation.
As active, contributing members of local communities, oWorkers occupies a prominent position and is an employer of choice. This enables us to attract a steady flow of interested candidates for our open positions and also enables ramping up and down for client requirements to meet unplanned spikes in volume. Hiring almost a hundred resources within 48 hours is something oWorkers is happy to commit to.
Technology is the key enabler, and the other pillar of the industry, apart from human resources. Technology advancements, along with advancements in telecommunications, has made the industry possible in its current shape and form. It follows, therefore, that all efforts of business process outsourcing management need to provide for current technology, along with measures to ensure the security of data and other digital assets of their clients.
oWorkers already has a large section of their clients as technology companies. They are helpful in keeping us on track with respect to new developments. Our relationship with our clients, as well as with other technology companies that we have forged, give us access to the latest technologies that we can use for the work of our clients.
oWorkers operates from secure facilities and protocols. GDPR compliance is a requirement, not a choice, as we operate from the Eurozone. We are also ISO certified (27001:2013 & 9001:2015).
Flexibility to work from home
Less than two years back this item might not be on anyone’s list for success in business process outsourcing management, but is an indispensable item today. Yes, we are referring to the changes induced by the Covid-19 pandemic.
The sudden lockdowns and shelter in place restrictions calmed down in many parts of the world caused significant disruptions to business. The yeoman service rendered by the BPO industry as a whole needs a special mention. Thanks to their efforts, many businesses were up and running in very short time frames. While the threat has receded somewhat, the structures put in place have remained standing and alert to the need, whenever it may arise.
oWorkers was a leader in these efforts and became one of the first BPOs to equip its staff to work seamlessly from home or office, as dictated by the situation on any given day. Though more and more people are coming in to work now, the flexibility now rests with employees and they can choose to work from home, should they feel more comfortable doing so. While 24×7 delivery was always available with oWorkers, the ability of staff to operate from home makes working 24×7 even easier.
Putting in place an organization structure
Once the work starts, a process; yes, a process for a process, needs to be put in place so that it can continue endlessly. That is the assumption a business makes; an agreed arrangement will continue forever, unless something is changed, or expressly otherwise mentioned.
The basic process for this to happen is an organization structure, the sometimes linear and sometimes intersecting set of positions, with identified people manning those positions, and articulated responsibilities designed to ensure that the vendor’s responsibilities on the contract in question are fulfilled.
The organization structure of a BPO will usually consist of the following roles:
Frontline agent or advisor
The most critical role, this is the position that does most of the work while many other positions support it in various ways. The largest number of positions in an organization, often more than 70%, are advisor positions.
This is the first line manager or supervisor, who is expected to be the link between the advisors and the rest of the organization and ensure that the agents are monitored, supported and guided so that they achieve assigned goals.
New hires are raw and often need training. The trainers, themselves experts in the business, do the training and ensure newbies are ‘fit for purpose.’ They also do refresher training for advisors committing errors. Some companies where communication is a key part of the role, also have trainers for communication skills.
The Quality Analysts (QAs) keep tabs on the output produced by the delivery team and ensure that the output that eventually reaches the client is of good quality. The reporting line of this team is kept independent of the delivery team to ensure their work is not compromised. They also form an important link in keeping senior management informed.
This is where the performance buck stops. With the help of the various roles, the manager is expected to ensure that client requirements are met through the performance delivered by the team. Depending on the size, there could be multiple managerial levels.
These are the key roles in the delivery structure that makes up the business process outsourcing management team, the team that has some responsibility for the output on a client project. These roles are further supported by an organization team that does not have a direct client delivery role but exists to smoothen the delivery path. The usual constituents of the organizational support team are Finance, Human Resources, Workforce Planning, Information Technology and the Administration team.
With an organizational culture that promotes multi-cultural and multi-ethnic talent, oWorkers has developed multilingual capability and is able to support clients in over 22 languages.
Managing the external environment
It is a requirement for a business to manage its external environment, and a BPO is no different. There are many aspects to this.
The operation should be located in a place which supports such enterprises. Governments in many locations support setting up BPOs because of their job-creation credentials. Hence, BPO providers will find many places that welcome them.
Also, the social environment should be conducive to running their business. If they need to run a 24×7 operation, will the community be against it? Do women work is also an important question as it substantially increases the employable talent pool.
If there are infrastructural limitations, such as inadequate power supply, they may need to be overcome through private arrangements.
oWorkers embeds itself into local communities and works with them for mutual benefit. The results are there for all to see.