BPO – Reports of its death are greatly exaggerated

If you listen to many commentators the Business Process Outsourcing (BPO) industry is being hunted down by modern day four horsemen of the apocalypse – RPA, AI, Cloud and Digital. There is no doubt that it is a sector facing severe disruption but it’s too early to be administering the last rights, perhaps there is even cause for optimism. The choice and accessibility of transformation levers in operations has never been greater. This is according to Jon Clark, Proposition Development, ActiveOps, a leader in Digital Operations Management.

Jon Clark stated: “There will always be a desire by some organisations to use third parties to execute the renovation and operation of their business services. However, the rise of accessible technology like RPA, chat bots, etc. makes it easy to reduce the manual effort in processing transactions. Overlay this with changes in customer behaviour driving increased self-service or digital inputs (through apps), then the need for agents reduces.

“The lacklustre response by some BPO providers to these trends has intensified the pressure to automate and drive efficiency. But there are things BPO providers could do to take advantage of, rather than be disintermediated by the disruption.”

“In the right context there can be a substantial difference in the benefits delivered by a BPO provider compared to in-house. These are sufficiently compelling to ensure the industry will survive the current disruptions, that being said, there is no question that the current norm is no longer sustainable and the BPO needs to evolve to ensure survival,” continued Jon.

How to evolve your BPO model:

• Establish automation centres of excellence with reusable libraries to accelerate change, reduce implementation costs and create a place to develop best practices. The centres of excellence should use data driven approaches for targeting automation. Building automation software should be avoided in favour of commercial ‘off the shelf’ products. Clients need reversibility; they won’t outsource to a vendor if they are not confident that the service can be brought back in-house or moved to another vendor.
• Replace obsolete operations management methods and tools that cannot cope with the blended robot-machine environment. Modern tools will also enable the sharing of operational resources across client accounts with the confidence that service levels for each will be maintained.
• Be bold in risks that will be managed and be confident
 to exploit the investments and experience embedded in your BPO business. Data driven contract verification and due diligence processes can help identify and manage the risks.
• Dust off some of the deals of the late ‘90s in a return to output-based contracts or develop an outcome contracting approach. De-coupling the link between revenue and FTE will ensure the BPO provider has the ongoing incentive to drive automation and efficiency.
• Finally, do not forget what you already know. That BPO, for example, is a practitioner-based industry, so operations leaders and transformation leaders need to be front and centre of the sales and client on-boarding process.

“Since BPO is simply the contracting of delivery responsibility for a specific business process to a third-party service provider, if these companies are not going to do the work then it must mean it will be done in-house. Pretty straight forward. Many organisations deliver their own business process and have access to the same technology and resources from the market. However, this is exactly why the BPO genie will never go back in the bottle,” concluded Jon.