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  • Writer's pictureTSD Global

How To Cut Labor Costs with Business Process Outsourcing

As people and companies become more connected in the digital age, companies are looking beyond simply focusing on the cost of labor in using business process outsourcing (BPO) services.

Of course, cost is still a top priority. According to the Deloitte 2016 Global Outsourcing Survey, the top two reasons for using BPO were cost cutting (59%) and focusing on the organization’s core business (57%).

But companies are looking for more than traditional labor-cost cutting. Leading organizations look to their BPO partners to drive transformational change and improve business results. In the same survey, more than 50% of participants found that third-party advisors added value during strategic assessment, business case development, RFP/vendor selection, and negotiation and contracting.

In addition to labor cost reduction, primary drivers to outsource to BPO include enabling core business functions and solving capacity issues.

The low-cost labor equation has changed how companies approach the value of outsourcing. No longer is the formula as simple as issuing an RFP (the process used by 95% of companies) and selecting the lowest price. Now companies are looking to partner with service providers that have evolved their models and methods to better meet changing business and financial objectives.

In all types of industries, relentless disruption has forced organizations to seek out new solutions to remain relevant in the marketplace and build customer loyalty. To do so, innovation and customer experience management have become the key drivers for businesses seeking to gain competitive advantage. The top 3 corporate functions that are currently outsourced are IT (72%); Legal (63%); and Real Estate & Facilities Management (60%), according to the Deloitte Outsourcing Survey.

The top function that respondents said they would increase the use of outsourcing is finance. Currently, 42% outsource some portion of their finance operations, and 36% said they would increase the use of outsourcing there in the future.

The KPMG Deal Tracker reports that clients preferred mid-tenure ideals for IT and other relationships, as 75 percent of the deals signed in 2016 were for one to five years long.

The demand for call center outsourcing continues to grow as companies respond to digital-first consumers who expect to be able to contact the company through any channel at any time. They prize speed of information more than human interaction. While this type of consumer is becoming more common, the older demographic would rather engage with a person than rely on technology for anything more than a simple transaction. Effectively managing service delivery given the unpredictable nature of customers and their ever-changing perception of service has become even more challenging.

The outsourced call center provider not only must ensure the right number of resources are staffed for expected demand, but also deploy the resources with the skills and technology to improve first contact resolution rates and fulfill consumer expectations. The shift to multi-channel contact has led businesses to rethink the delivery of the customer experience far beyond what they could deliver via an in-house contact center. Today’s call center agent must be able to answers the phone and support customers through digital channels.

BPO partners in the call-center space invest in the technology and training to deliver customer service via the multi-channel experience. But a successful BPO-call center engagement requires more than the latest chat apps and social media monitoring. For today’s consumers, the ability to actively listen to the customer and demonstrate empathy is even more critical regardless of the contact channel involved. An outsourced call center understands the differentiators in delivering exceptional service.


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