Business Process Outsourcing Considerations with a Focus on the Customer Experience

Transcription

1 Educational Whitepaper Business Process Outsourcing Considerations with a Focus on the Customer Experience

2 Business Process Outsourcing Considerations with a Focus on the Customer Experience In the current competitive market partnerships have become a mainstay of product and service delivery, and that trend continues to gain importance. One component of these partnerships is the increased use of business process outsourcing (BPO) to supplement internal staffing, or to offload non-core functions to entities where the function is core. Properly managed, these relationships provide enhanced product and service delivery capabilities along with improved agility and speed-to-market, while ensuring operational excellence. BPO Partnership Benefits BPO Partnerships enable a CSP, MSP or even a Large Enterprise to: 1. Maintain focus on its core business of delivering quality products and services that specifically address market requirements 2. Become more flexible and nimble in the way it responds to market pressures, releasing and retiring products/services much more rapidly than can be achieved through internal staffing 3. Transfer the ongoing responsibility to the outsourced partner for the staffing, training, infrastructure, scaling and ongoing risk management around volatility While these benefits are considerable, handing a significant portion of the end-to-end customer experience over to an outsourced provider can prove to be less than beneficial if proper attention isn t paid to ensuring a good cultural fit, and establishing co-ownership of business objectives. In this context, the end customer could be internal or external depending on the functions being outsourced. In addition, the underlying technology of the outsourced provider needs to support a seamless integration to your existing operation without impact to the customers it serves. If not, the customer relationship could be at risk. In the past, the primary motivator of outsourcing was to reduce operating costs through an extensive ROI modeling effort. More recently, companies have realized that a relationship with a partner based on cost reduction alone does not necessarily lead to the desired business results, which, of course, is usually true with any purchase decision. Selection of the wrong outsource model or provider can negatively impact results. The BPO relationship has evolved into one that is more strategic in nature, based heavily on factors that directly relate to strategic objectives for areas such as quality, revenue growth, reaction expectations and, most importantly, customer experience. Similarly, the BPO provider that has the required core expertise can become aligned as a strategic partner, and will be focused solely on the requirements of the outsourced processes and the desired results. It can also deliver a significant value-add and exceed expectations. Other typical benefits might include further enhancements to the outsourced processes and an improved customer experience. Regarding Offshore Partners Companies that have utilized offshore business

3 Business Process Outsourcing Considerations with a Focus on the Customer Experience 3 process outsourcers have either on-shored those functions or are re-examining the benefits of maintaining those services offshore. Why? The cultural, linguistic and geographical differences have always resulted in an increased effort to manage the BPO relationship. In addition, there have been a couple of key trends that have made offshoring less attractive: When the need to focus on the customer experience is a key competitive differentiator in a hypercompetitive industry, the barriers mentioned above can be sufficient to have an adverse effect on the customer experience, resulting in increased customer dissatisfaction and churn Increased offshore labor costs have significantly marginalized an already declining cost benefit differential Selecting a Business Process Outsourcer Utilizing a domestic BPO provider is not necessarily a guarantee that the relationship will prove successful. So, what considerations should be taken into account when selecting a business process outsourcer? What key attributes are considered foundational to a successful BPO relationship? And how do these key attributes contribute to the enhancement of the end-to-end customer experience? First, it is Vertek s contention that the attributes required of the relationship and the partner should include the following: Adaptability The outsource provider must have the capability to meet the specific requirements of its client company, while still leveraging its unique core expertise, methodologies and efficiencies that will drive the increased value. The provider should be able to demonstrate its ability to ramp quickly and continue to respond rapidly to ongoing changes in requirements by being flexible and demonstrating adaptability. Partnership The governance of the BPO relationship should be based on the tenets of a strategic partnership as opposed to a vendor-client relationship. It has been proven that this business model provides a more robust environment for cooperation, a continuous enhancement of the relationship and the ability to swiftly respond to continuously changing market and business requirements. The client company will want to understand the vision and core values of its proposed partner. How well do these fit with the culture of the company? Trust is a significant aspect of the relationship, and that trust has to be based on a mutually beneficial partnership. Trust will also help to avoid the desire to point fingers and assign blame. In reality, issues will occur, and it is important that the partnership is such that issues are addressed swiftly, corrected and reflected upon so they are prevented from occurring again. Organizational alignment at key levels is critical in creating that true partnership. Alignment should occur at the following levels: Executive, Operations, IT, Finance and Service Delivery. This enables day-to-day direct contacts for dealing with items and questions as they come up, just as if both companies were one. This also establishes a solid escalation flow. Change Management The outsource provider should have solid change management capabilities that will be critical, not only in the program launch but also in maintaining a continuous and collaborative improvement initiative. These capabilities will be heavily utilized during the program launch as both parties adjust to the changes required by the new relationship. Effective change management will ensure that change agents in

4 Business Process Outsourcing Considerations with a Focus on the Customer Experience 4 both organizations are provided the structure and support required to maintain continuous improvement. Both organizations will adjust to the changing requirements of the market and to changes in their joint business objectives. The complexities involved in the launch of a BPO initiative require a well-conceived and well-executed project plan. Solid project management capabilities are also an important requirement of the BPO partner. Analytics Analytic capabilities have become a key requirement for any business seeking to maintain a competitive edge, and a BPO provider should be no different The provider must be able to demonstrate how that capability can be applied to the outsourced business processes to monitor performance against business objectives and develop solutions that support continuous improvement of the processes. Data analytics on both sides of the relationship will ensure that the business intelligence and facts are always front and center and never a mystery. Business Objectives The key performance indicators (KPIs) used to measure the success of the program, both strategically and tactically, should closely relate to the business objectives of the relationship. The objectives of both companies must be understood from the start and considered when structuring the relationship. This ensures the sustainability of both parties, shared accountability and an alignment that allows both to be successful. Domain Embarking on a new outsource program should not require educating the outsource provider s employees and management on the technologies, business functions or market. The outsource partner should be able to demonstrate in-depth domain knowledge through a history of similar arrangements with similar deliverables. Additionally, the outsource partner s employees should have the requisite skills, education and experience required for the deliverables. The partner should be able to demonstrate that its employees will be fully engaged, and capable of ensuring that the baseline customer experience is either maintained or elevated. In those cases where the BPO relationship involves customer facing processes, the partner s employees will be representing the company. In this role, they must be able to relate to the customer in a way that demonstrates the company s commitment to enhanced customer experience. The Customer Experience So, how do these attributes contribute to the management of, and provide enhancement potential for, the customer experience? To begin with, the outsource provider s management and employees must be fully integrated into the client company s organization. This helps ensure that the employees are fully engaged and consider themselves virtual employees of the company. Within the guidelines set by the relationship, these employees should be empowered to match (and ideally exceed) the level of support the customer has come to expect from the client company. The client company should consider including customer experience KPIs in the contractual metrics that are foundational to the BPO relationship. Systems that manage voice of the customer data, such as CSAT and Net Promoter Score (NPS), provide an excellent structure and methodology to ensure that any customer feedback relating to the transactions specifically handled by the outsource provider s employees are shared with the BPO management both positive and negative. This provides management with the tools required to effectively oversee employee development, ensure employee engagement through employee recognition and

5 Business Process Outsourcing Considerations with a Focus on the Customer Experience 5 develop or recommend system or process enhancements which better support the customer experience. One caveat: the end-to-end customer experience referred to in the title of this paper obviously includes much more than the capabilities of the BPO partner. Carving out one segment of the overall customer experience for outsourcing to a business partner can be problematic. Much depends on what portion of the customer journey has being handed over to the partner. As with any customer-facing processes, those that involve a BPO provider must support a seamless transition both from the client company to the BPO partner and vice versa. The development of customer journey maps, created from the perspective of, and as the result of soliciting input from, the customers of the client company can be a valuable tool in ensuring a seamless interaction with the customer. Specific touch-points with the customer, such as interaction, web inquiry, web chat, telephony contact via IVR and/or human interaction in a call center, all need to be properly mapped for each type of journey to ensure there are no gaps or touch-point redundancies that will lead to the customer having a negative experience. party, company, partner, or all of them contact the customer to request or provide the same information repeatedly, must be avoided at all costs in order to deliver a seamless customer experience. BPO partners have understandably gained in popularity in the current competitive market, and have become an important element in timely product and service delivery. It is important to note that an experienced BPO partner has considerable value beyond simply supplementing internal staffing by off-loading non-core functions. Starting on Day One, a partner with proven BPO experience will provide value and create greater efficiencies than would be typically possible using internal resources. Done correctly, the client company/partner relationship will improve agility and speed-to-market, and ultimately have a significant positive impact on the customer experience. The company should have a systematic method of collecting customer feedback at the transaction level. If the supporting systems are also being outsourced, tight integration between the systems of the two partners will be required to ensure that both the client company and BPO employees have access to all of the same information. It is also critical that a customer being handed off from one organization to the other does not experience a process gap where the left hand does not know what the right hand is doing. That situation would result in a displeased customer. Additionally, redundant touch-points where the customer is required to provide the same information for the same purposes multiple times, or where the third

6 Mountain View Drive, Suite 300, Colchester, VT, For more educational whitepapers, visit our Value Center at