This blog article was written by Pankaj Kohli
The Business Process Outsourcing (BPO) industry has dramatically changed over the past 20 years. If you look back at the companies offering outsourced services at the turn of the millennium, the focus was almost entirely on cost. Offshore outsourcing was further promoted as a way to deliver services, at a much lower price than hiring people locally.
From Pioneers to Offshore Service Providers
Service companies have always promoted themselves as partners. The reality, however, was that clients were only looking for a way to deliver basic, non-core services at a lower cost. As service providers developed greater expertise, they progressed up the corporate value chain. Business commentators started talking about Knowledge Process Outsourcing (KPO) because instead of simple, low-value services, companies were now offering services that required highly skilled people making decisions on the client’s behalf.
Customer service outsourcing is a good example. There was a time when most brands did not want to outsource their customer service function to a customer experience specialist since the connection to the customer was seen as critical to their business. Why would you outsource customer engagement? Eventually, though, most brands found that BPO companies could service their customers better than they could internally since it’s their core expertise. As a result, outsourcing to customer experience experts became more common.
The Age of Operational Expertise
Over time, industries that sought BPO services & variety grew in number, and vendors graduated from being low-cost suppliers to strategic partners. With this level of business maturity, outsourcing companies took the initiative and carved out a unique business niche, offering specialized, high value services. With any growth and knowledge-oriented sector, these services expanded for better value and efficiency.
Innovation for Better Processes
The first decade of this millennium saw BPOs become knowledge centers, paving the way for data-driven insights that drive and propagate innovation. Transaction-based pricing, vertical-specific services, and extensive global capabilities all became core offerings and value differentiators. The introduction of analytics ensured delivery with better intelligence, insights and results.
Beyond Insight and into Future Collaboration
The current wave of change and innovation started approximately 5 years ago and it is focused on delivering value to the customer. This transformation requires a Technology, Analytics, and Process Excellence (T.A.P.™) approach.
Modern technology is helping service providers to automate not only rules-based activities, but also use artificial intelligence to mimic human problem-solving for more complex issues. Advanced analytics, on the other hand, allows us to use and mine more data than ever before. Such advancements combined with Lean Six Sigma and Design Thinking are the perfect ingredients to help businesses advance in this highly dynamic operating environment. The best part is that such transformation is not only possible in traditional brick-and-mortar settings, but also in a work-at-home (WAH) environment.
Some companies are already using this T.A.P.™ approach, but many have yet to explore what is now possible.
I have examples and case studies I can share if you would like more information on the possibilities. Get in touch with me via LinkedIn.
Photo by Daniele Levis Pelusi on Unsplash
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