Business process outsourcing companies, otherwise known as BPOs, feature prominently in the operational blueprint of nearly every major organisation. But where do you find the right BPO partner for your business?
Since there are tens of thousands of bpo companies around the world, one of the first places to start in finding your perfect match BPO is location – that is, define which countries (or even cities) are best suited to meet your needs…on-shore in Australia, near-shore in New Zealand or offshore in the Philippines, Fiji, South Africa or India? Consider the following to help narrow the field.
In most outsourcing business cases, cost is a key part of the equation. But it’s not just about whether wages are cheaper in a particular country. There are also infrastructure and communication costs, as well as travel and the “hidden cost” of all the time and resource it takes to manage a vendor in a location with a different culture (if you are considering offshore). Then there’s exchange rate volatility, which can move the price up by double digit percentages in one year if pricing with the BPO is not set in your currency. Often forgotten is the cost of speed to competency – for example, in your home country it may take just one month for agents to get fully up to speed, but in another market you may need to factor in a three-month ramp-up time. Attrition is a cost that is not well understood –if there is low unemployment and a labour shortage, you may find that staff don’t stay long and will readily hop for a pay-rise to the BPO around the corner. The cost of finding, hiring and training replacement staff is significant, as is the cost to the business of constantly having inexperienced agents manage customer inquiries. In general, attrition tends to be higher in large cities than regional centres.
Business and customer goals
Put simply, what are the drivers for your business process outsourcing? To improve the customer experience? A cost reduction mandate from the CFO? Or is it a response to the lack of availability of technical skills in Australia? Or maybe because you need a geographically disparate location in a second site for business continuity purposes? The answer to these questions provide valuable input into which countries you should consider.
Accent is probably the most emotive and subjective factor in determining optimal location, when the outsourcing is call centre activity. Business process outsourcing in New Zealand, Fiji and South Africa will point to “neutral accent” as a competitive advantage over countries such as India, or even the American accent of the Philippines. The reality is that a large proportion of Australian contact centre workers are born overseas, so foreign accents at home are common as well! Request sample accent .wav files.
Type of work (customer service, accounting, collections…)
Individual countries or cities tend to develop core competencies which align with the culture and available workforce. There’s no shortage of business outsourcing companies in India that would put up their hand for funeral insurance lead generation or solar energy appointment setting, but you might only find one business process outsourcing company in Fiji willing to take on this type of work. With technical support and collections as exceptions, India’s core strengths are in “non-voice” processes such as accounting and HR, as well as web chat interactions with customers. Fiji, with its incredibly warm and friendly culture, is considered ideal for customer service. In South Africa, the city of Durban has established itself as a “centre of excellence” for sales and retention, while the Philippines retains the crown as the most popular BPO destination for Australian (and American) companies overall.
In the back office, South Africa and Sri Lanka are hotspots for accounting outsourcing, reflecting the high per capita pool of accounting graduates in those countries.
Think about the size, availability and calibre of the workforce in the potential target destination. Telesales is an example of an activity that generally does not do well in small population centres (sub 100,000 communities) in Australia and New Zealand, as the workforce does not have enough depth of gung-ho sales talent. The same could be said of technical support. On the other hand, customer service and engagement does well in regional environments, and this is reinforced with subsidies from Government keen to create jobs in high unemployment areas.
As more and more routine process work gets automated, the work that is getting outsourced is becoming more complex, requiring deeper skills and knowledge in the BPOs’ workforce. BPO industry associations in the Philippines and South Africa are actively seeking to move their countries up the value chain through upskilling and training programs.
Reliable voice, data and Internet connectivity are instrumental in outsourcing, as is a secure environment.
Countries which have a well-developed BPO industry tend to have excellent infrastructure, however, in any country there are business processes outsourcing vendors that compromise on infrastructure to reduce cost.
Hours of operation
There is a generally accepted view that if everything else is equal, it is more desirable to outsource in a time zone where the staff are not having to work through the night. This was the thinking behind the follow-the-sun strategy implemented by iiNet and many others.
While most offshore vendors offer 24×7 service, if all you require is service during Australian business hours, you might find that New Zealand is a better option than South Africa purely because of the time zone difference.
In an increasingly unstable, nationalistic world, political climate has become more of an issue when considering outsourcing. While the BPO industry is still growing in the Philippines, some of President Duterte’s statements have raised concern amongst buyers of outsourcing services, and militants in the South of the country have also caused jitters.
The frequency of natural disasters in different parts of the world also needs to be assessed, together with the infrastructure to withstand them. Noteworthy was the experience of the largest business bpo company in Fiji, whose staff continued to take calls throughout the most powerful cyclone ever to hit the Asia-Pacific – the centre was purpose-built to withstand extreme weather events, and the staff felt safer at work than at home.
Direct flight access is highly desirable, as outsourcing requires regular travel to the offices of the business process outsourcing company you have chosen to work with. And the shorter the flight, the more appealing. So while Poland might be a great choice for a UK company, the 4-hour flight to Suva or 3-hour flight to Auckland would make much more sense for companies in Sydney, for example.
if you’re moving work offshore, you may want to consider if the vendor is committed enough to the Australian market that they have a representative on the ground here. It may mean a few less late night calls, and make it easier for you to knock on a door when there’s a major issue.