future of business process outsourcing
What does the future of business process outsourcing look like?
“I look to the future because that’s where I’m going to spend the rest of my life.”
This quote is attributed to George Burns.
The American comedian. There could, perhaps, not be a better fitting quote for a business.
Set up on the promise of what they can achieve, in the future that is going to unravel from that moment onwards, while they keep an account of the past, businesses must necessarily keep looking at the future every moment of their existence.
Each moment presents a risk, as well as opportunity.
What has happened has happened.
They can only do it differently in the future, not in the past, not in the present either.
While business schools may teach it as the ‘Sunk Cost’ principle, every businessperson worth his/ her salt knows this intuitively.
The future is all that really matters.
The need to stand on tiptoe and peer out over the horizon into the future is a requirement for every business.
They need to make an effort at understanding and even foretelling the future, as that is often the difference between success and failure.
If Kodak had understood the future better and could better foretell the march of digital technology, they may not have been a part of history today.
Facebook understood the oncoming age and created a platform that rode the internet backbone and launched the social media revolution.
With a laser focus on its chosen area of work, data based BPO services, oWorkers has stepped directly into the future of the BPO industry.
Eight years old oWorkers is already recognized as a leader in its chosen space, and counted amongst the top three BPOs, bar none, in the world.
What about the future of business process outsourcing?
As an industry, it has continued to evolve and stay relevant over the past many decades.
It provided support when businesses wanted to outsource processes away from expensive real estate in downtown customer centers when volumes started rising.
It provided support when communication and air connectivity enabled taking business processes further into the country.
It provided support both in the form of inhouse providers as well as third party providers.
It provided support when the industry looked overseas for support.
It provided support when the range of services grew beyond the basic and created solutions for specialized and complex services such as HR, Legal and Knowledge Process Outsourcing.
It has taken to post-digital evolutions like a duck to water.
Many of the business processes that create a large volume of work for providers were not even a distant dream when BPO services started going over the expanding internet and telecommunications to far flung providers.
While oWorkers may have made educated and knowledgeable projections of the future, their work is not finished.
There is always a future up ahead that we need to keep looking into and planning for.
They are preparing for the future by putting the building blocks of a successful BPO in place, such as access to manpower.
With their position in the local centers as preferred employers, oWorkers attracts a steady stream of talent.
It not only saves them advertising budgets for inviting people, it also provides a ready pool of talent for all projects.
So, what does the future of business process outsourcing look like, for the industry as well as its participants like oWorkers?
The future in numbers
Since BPO is not a homogeneous industry, numbers can vary from one perspective to another and from one consultant to another.
However, whichever way you look, the industry has notched up impressive growth numbers if we look at historical trends and, even more importantly, is expected to continue to show strong growth numbers well into the future.
Most analysts seem to agree that the market size translates to hundreds of billions of dollars globally.
Also, its growth rate, or CAGR (compounded annual growth rate) estimates range from 5% to 8.5%.
A Gartner study published in August 2019 forecasts the BPO industry to grow at a CAGR of 3.5% till 2023 over its then size of $154 billion, with digital services, robotic process automation and artificial intelligence being the key drivers.
A Fact.MR report published in March 2020 projects an impressive 7.5% CAGR growth rate.
They expect customer complaint redressal solutions to be one of the drivers of the growth.
A Brand Essence Research publication in June 2021, pegged the value at $187.91 billion and expected it to grow to $314.81 billion, at a CAGR of 7.65%.
According to the publication, low-cost talent pools in emerging economies coupled with retail and e-commerce would be the engines of growth.
Global Industry Analysts Inc. published a report in August 2021 where they projected the industry to grow to a size of $215.9 billion in 2016 from $161.9 billion in 2020.
This growth translated to a CAGR of 5.2%. Grand View Research Inc., in a report published in April 2021, has projected an 8.5% CAGR till 2028 which would make the size of the industry $435.89 billion.
The drivers of growth, according to this research, would be the increased preference of new-age organizations to outsource non-core functions, as well as the need to drive costs down to remain competitive.
Technology is the great multiplier.
It creates scale.
Hence, ensuring technological currency is a key enabler that oWorkers achieves through its partnership with technology providers.
These technologies are available to them even for the use of client projects.
What should we expect in the future of business process outsourcing?
OK, so most analysts and consultants predict strong growth for the industry.
That is good news. But what does that growth look like?
Is HRO going to be the star of tomorrow’s BPO?
Or will it be KPO? Will growth be driven by cost saving?
Or will human resource availability be the determinant?
Let us be honest.
The few of us who were associated with the industry when globalization and strong growth took off, could hardly have foreseen that social media moderation and data annotation for building AI models would be among the stars of today.
However, analysts must be analysts, and make efforts to peer into the crystal ball and hazard ‘informed’ guesses about what the future might look like for the industry.
What do they say?
Automation
Though the industry professes to do for clients what automation has not been able to, analysts see greater automation in the future of business process outsourcing.
In fact, whether it is BPO or any other industry, the effort to automate is an ongoing one.
The reason is simple.
Companies have been trying to automate since time immemorial.
Even before the digital age started automation was an ongoing effort, even though it would have looked different.
In many cases, what could not be automated was outsourced.
It cannot be that the outsourcers have stopped trying to automate the processes that have been outsourced.
Highly unlikely.
They are probably continuing their efforts at it.
Now, an additional entity, in the form of a provider, is perhaps also trying to introduce automation in the hope of getting greater traction in sales and greater margins on the income statement.
It could be a double-edged sword for providers. Once a technology solution has been introduced, the outsourcer might also be in a position to deploy it.
oWorkers operates out of super secure facilities & protocols for your data security with ISO certifications (27001:2013 & 9001:2015).
It is also GDPR compliant.
New business requirements will emerge
Just like social media moderation and AI data annotation could not be foreseen before they arrived, quite possibly the business processes driving demand in future may be yet to be discovered or yet be attached to a business that is making waves.
As confidence levels in BPO services has gone up, the range of services has expanded beyond the standardized and tightly-managed processes where deviations were unacceptable, to processes less well defined where some personality of the doer is acceptable.
There is no reason why creative services like designing and writing cannot be the next frontier of BPO.
Preferring to operate with employees, and not freelancers and contractors as some of its competitors seem to prefer, oWorkers retains the flexibility to train and deploy staff based on need as well as in response to emerging trends.
Omnichannel customer service
What today is practiced by a few large corporations with deep pockets and technology investments, will become commonplace.
Multi-skilled resources will be able to handle customer interactions, regardless of the channel they emanate from.
New technologies will emerge to support this multi-channel interaction.
Though automation will chip away at the edifice of customer queries, real people to speak to and exchange messages with are not going away anytime soon.
It is possible that access to them gets limited by the principal company.
People will be key
People are not going anywhere.
They are the driving force of the industry.
With increasing complexity of jobs, they will need to keep upgrading to handle a wider variety of issues or more complex ones, or both.
There will also be greater reliance placed on frontline staff members who are interacting with customers or doing transactions.
The relevance of this model has already been tested during the outbreak of Covid-19 when BPO staff members were forced to start working from home, almost overnight, and lost the access to the support of supervisors and others that they were used to. In most cases they came out with flying colors.
With Covid-19 related uncertainty continuing and work from home becoming a part of the equation, expect frontline staff to play a more important role in the future of business process outsourcing.
Staff, both present and past, rate the company well on external platforms such as Glassdoor, with 4.6 out of 5 being the average.
Geographical expansion will continue
As capacities in existing provider geographies get maxed out, expect the rise of newer geographies.
With the internet and telecommunications being what they are, instead of the few (outsourcing locations like the US, UK, Europe, etc.) to few (provider locations like India, Philippines, etc.) mapping, expect a many to many mapping.
With the emphasis gradually shifting to the nature of the service, it is possible that geographical specializations, or centers of excellence, will emerge.
Egypt could be the Finance and Accounting hub of the world while Madagascar becomes the hub for Legal Process Outsourcing.
Already operating 24×7 for clients, oWorkers is geared to meeting processing requirements in 22 languages.
Startups will drive growth
Legacy companies had to make a shift from inhouse processing to outsourced processing.
Any change requires hurdles to be overcome, hence the adoption was slow.
New age startups are adopting BPOs from the get go.
They do not have to go through a round of transitioning from self to a vendor, and all the attendant pains.
With the boom in startups, and unicorns being minted every other week, if not day, a significant amount of business from startups is visible in the future of business process outsourcing.
For startups it is a win-win situation.
They do not need to build the fixed costs that come with the creation of an inhouse delivery structure.
They anyway have small budgets and would rather spend them on business.
They are happy to outsource what can be outsourced.
oWorkers brings value in the form of an unmatched price point that results from efficiencies running through its operations.
Many clients, especially from the US and Western Europe, calculate savings to the tune of 80% when compared to their pre-outsourcing days.
The choice given by oWorkers to clients, of choosing between a dollar per unit of output or dollar per unit of input price is appreciated by most clients.
The case for oWorkers
oWorkers is well established as a value creator for its clients.
It is also an opportunity creator for the communities where it locates its delivery centers and provides a portal for people from disadvantaged communities to enter the global digital economy.
In the future of business process outsourcing, your work could enable a few more to get that opportunity.
