BPO Adaptability: Boardroom Buzzword or Competitive Advantage?

As competition within the business process outsourcing (BPO) industry mounts, organizations have increased options when selecting an appropriate provider for your contact center. This enables them to look beyond traditional factors to determine how successful a potential relationship will be. One of the most important elements these companies should consider is a BPO provider’s ability to adapt to the changing business cycle on both a micro and macro level.

But the term “adaptability” has achieved buzzword status, often infused into corporate messaging to signify some level of competitive differentiation. In the BPO industry, providers preach their ability to adapt as a way to more effectively meet the needs of customers. Many providers, however, only offer services that pedantically follow the rigid guidelines of what the outsourcing provider considers to be the blueprint for a successful relationship.

The reality is, every outsourcing engagement is different, and the unique intricacies of the individual business must be considered when establishing a strategy. What’s more, because every industry is unpredictable, this strategy must be flexible so the provider can adjust accordingly.

A provider’s ability to adapt with a business as it experiences ebbs and flows can determine the success – or failure – of an outsourcing relationship. When entering an outsourcing engagement, it is critical for companies to understand how a provider can – and should– adapt to meet their needs. Perhaps the most significant areas in which a provider should demonstrate adaptability are with contracts, infrastructure, and operations.

Contract adaptability

Drafting a contract is perhaps the most challenging aspect of an outsourcing engagement. Many negotiations reach an impasse because of the provider’s inability to adapt to the client’s desired terms. Successful providers realize that no two contracts are identical and by cultivating various creative elements, provider and client can reach agreeable terms.

For example, while it is easier for a provider to set consistent payment schedules, it does not make sound business sense because all business cycles experience inconsistent peaks and valleys. Providers ideally will have a deep and diversified client base that allows for flexible payment terms.

Another technique that providers can integrate into a contract is known as a “build, operate, transfer” clause. Many companies are often concerned about buyer’s remorse; fearful that the results will not justify the tremendous amount of resources required to launch an outsourcing program. By including a “build, operate, transfer” section of the contract, a provider can address these concerns.

This type of clause involves a “try before you buy” option. The provider will proceed in normal fashion, implementing the infrastructure and staff at the designated contact center location. After a specified amount of time, the client evaluates the success of the engagement and has a customized clause for opting out of the contract. For example, if the original deal is for three years of service, the provider could grant the client the ability to purchase the contact center after two years if the service is unsatisfactory. The client can then seamlessly transfer the existing center inhouse, a process far simpler than constructing its own facility.

Similarly, it should be noted that many organizations that are considering an outsourcing engagement already have inhouse contact center infrastructure in place. To ease concerns about the tremendous investment already made in these facilities, providers can contractually agree to take ownership of an existing contact center. This will help facilitate an easier transition of operations.

By exhibiting a willingness and ability to adapt to changing business landscapes, providers can work with companies to meet their individual needs and establish a contract that will serve as the cornerstone for a successful relationship.

Infrastructure adaptability

The inconsistencies in the business cycle that should be considered when drafting a contract also impact infrastructure. Providers must demonstrate the ability to adapt their staffing and infrastructure capabilities to scale up or down depending on a customer’s needs at any given time, including at the commencement of the relationship.

It is common for companies to seek an outsourcing relationship in anticipation of a single event. For example, a consumer technology company may be launching a new product that will result in a large-scale need for customer service and technical support. This requires the provider to quickly ramp up its staff and infrastructure. In this case, companies should insist that providers agree to penalties for a failure to meet implementation terms. By doing so, the client can ensure that its provider is fully capable of handling the immediate requirements.

Customer service, technical support, and other business processes are also affected by various seasonal peaks and promotional periods. Providers must adapt rapidly, implementing drastic infrastructure changes in a short period of time. Perhaps the quintessential example of this is during the holiday season.

Many retail businesses, for example, experience a sharp spike in sales during the holidays, and they rely on providers for the customer support associated with this boom. Providers must be able to swiftly increase both its staffing and physical infrastructure to successfully meet these retailers’ needs.

Generally, a provider’s biggest challenge in this scenario is ensuring that it reaches the necessary staffing commitment. There are many ways a provider can attract workers during the holidays, including increased wages for working on specified days and offering creative bonuses for associates who achieve attendance goals. It is critical, however, to ensure that the provider also has effective programs in place for quickly but thoroughly training newly hired customer service associates.

By evaluating a provider’s adaptability, companies can take advantage of the seasonal swells in its sales cycle while ensuring that the back-end infrastructure is in place to facilitate this surge.

Operational adaptability

While some providers effectively adapt their infrastructure during various times of the year, they sometimes fail to adapt their day-to-day operations when necessary. Contact center associates and managers have firsthand knowledge of consumer behavior, and can offer valuable insight to their clients. Many providers, however, focus squarely on meeting established performance goals instead of the larger trends to which they are privy. By adapting to consumer behavior and executing revised strategies, providers can positively impact their clients’ bottom lines.

Some providers, for example, have divisions solely dedicated to customer “saves.” These associates work with dissatisfied consumers in an attempt to keep their business. By aggregating information from calls to this department, providers can present clients with creative plans for retaining customers or even winning back lost business from consumers who may have previously defected. Providers can also use this information to help their clients proactively improve various services, from customer care to technical support to non-contact center operations.

In addition to providing insight into clients’ businesses, providers must also adapt to other trends that emerge from day-to-day operations. One trend that typically develops during an outsourcing relationship is evolving performance metrics.

Generally, all initial outsourcing contracts are drawn up with similar metrics. Over the course of the relationship, trends will emerge and clients will determine which metrics most positively impact their individual businesses. It is critical that providers adapt to these evolving performance indicators and make any necessary changes required to meet them. To ensure continuity, providers should be expected to align reporting and quality assurance processes with the same structure used by their clients.

For example, some companies may ask for a penalty to be assessed if contractual key performance indicators (KPIs) are not met. At this point, it becomes critical that the provider work with its client to determine how it will measure various metrics in order to more accurately reflect performance. Experienced providers will be able to factor in various elements to adapt their reporting structure so that the client’s most important KPIs are considered.

Evaluating contract, infrastructure and operational adaptability will reveal a great deal about how a given provider will be able to align with the organization’s individualized goals and positively impact the bottom line. A provider should offer strategies for developing a successful engagement, but ultimately, the provider should adapt to meet the specific needs of its clients. If an organization selects a provider that is committed to – and is capable of – meeting and exceeding business objectives, the resulting improvements to customer service processes and ultimately customer satisfaction and retention will have a tremendous impact on the company’s overall success.

Julie Casteel is chief global sales and marketing officer at ClientLogic, a Nashville, TN-based business process outsourcer.