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The business case for BPO: Integrating outsourcing into your business plan

Understanding internal business capabilities goes hand in hand with outsourcing.

The business case for BPO: Integrating outsourcing into your business plan

Both globally and nationally, business process outsourcing (BPO) continues to grow. While some disruptive headwinds in the industry – such as intensified competition from new digital players – are complicating the marketplace, the business case for an operationally excellent BPO strategy remains strong.

Companies attracted to the proposition of cost-efficiencies deep-dive into the sector in the hope of rapidly reducing overheads and associated expenditure with little effort. However, what often gets overlooked is the external impact on the customer.

In today’s competitive business landscape, customers must remain front and centre of every business decision, and integrating outsourcing into operations is a key area to consider for enhanced customer experience.

As a result, it becomes important, if not necessary, to first assess your company’s internal capabilities and performance to address where outsourcing could enhance customer engagement levels.

Internal business capabilities and limitations

For businesses to deliver value, leaders must know the complete inner workings of the organisation. Every department needs to be given a healthy dose of scrutiny from a delivery point of view. This helps managers and leaders to understand the unique value proposition every aspect of the business offers. Without a solid understanding of one’s business capabilities, performance levels and performance limitations, the advantages of outsourcing can be severely reduced.

Businesses can maximise the benefits of outsourcing, such as reduced call-handling time and a streamlined customer service experience, by first ensuring the right tools are in place for immediate and accurate reporting of key performance metrics. This will assist business leaders gain crucial visibility into the internal capabilities of its team and, in the process, empower managers to make well-informed decisions about the possible integration of outsourcing.

Delivering benefits to customers

Customer satisfaction is crucial to sustaining a successful business in today’s hyper-digital times. BPO can provide a strong value-add proposition for businesses, but a customer-centric case for outsourcing must remain front of mind. When implemented correctly, BPO can enhance customer relationships as well as maximise employee engagement by enabling employees to focus less on menial tasks.

Adopting a customer-centric mindset is critical when assessing the business case for outsourcing. Put yourself in the customer’s shoes and ask what level or service would I require in order to give this organisation my repeat business? For what services do I expect human interaction and what level of automation do I require?

At present, artificial intelligence is starting to creep into the BPO at a rapid rate, placing increased market pressure on traditional BPO service companies that are slow to adapt to new technology. Further in the future, the advanced development of AI has the potential to directly compete with BPO. Combined, AI and BPO have the power to bring rapid efficiencies to a business via the delivery of high-level services that can enhance customer satisfaction and customer loyalty.

Assessing the business case of outsourcing now should incorporate a lens on AI, due to its transformational nature. However, the ability for integrated outsourcing and AI to empower your business and enhance customer satisfaction will, for the most part, be determined by pre-existing business capabilities. This requires having solid visibility of current engagement and customer service levels which will in turn help you drill down to spot any bottlenecks and identify the specific areas where outsourcing could be implemented.

Outsourcing considerations are important for businesses of all shapes and sizes and will crop up at different times of the business cycle. Financial metrics aside, the decision to outsource needs to have a strong business case attached to it that goes beyond simple cost savings. Questions such as whether to stay local or head offshore, whether to determine costs in heads or units, and deciphering what functions of the business are ripe for outsourcing, all need to be weighed up when making outsourcing decisions.

Outsourcing can empower both customers and the organisation, but operational excellence will only be enhanced when companies and management already have a solid understanding of business engagement visibility metrics. This pre-understanding of performance metrics, gained via data visibility, can then help leaders better pinpoint areas ripe for reassessment and possible outsourcing.

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