Is the traditional high-volume BPO model dead?

Since the start of the Covid-19 pandemic I have been arguing that the widespread move by the Business Process Outsourcing (BPO) industry to move most of their contact centre agents into home working (WFH) will fundamentally change the industry – there is no going back to how things were in 2019.

To add fuel to this fire I wrote a book focusing on Gig CX and another on the new security requirements for companies that are embracing WFH. I think that contact centres, and BPO as we know it, have to face up to the changing expectations of both their corporate customers – who want more agility and resilience – and the end customers making the calls – who just want better service.

Davies Consulting Group Director Mike Havard certainly agrees. He just published a white paper titled ‘Did 2020 Kill The BPO Industry As We Knew It?’ Mike argues that the crisis shone a spotlight on the opportunities for automation, innovation, and more virtual work – areas that the more traditional BPO players had largely avoided because their bread and butter business – more people in contact centres – was doing very nicely.

Mike recalls the transition to WFH back in March 2020 and suggests that some of the more forward-thinking BPOs were already using cloud-based virtual systems and were experienced with WFH protocols. They needed to get a lot of equipment out to agents at home, but they largely managed to deliver. Many others with a more traditional infrastructure focused only on the contact centre struggled – in some cases it took weeks of chaos before they could start managing services for clients again.

Mike described the surprising next step experienced by many BPOs: “Meanwhile, there was an unexpected development on the home front: remote working was proving a real success. Many advisors were really enjoying their new working environment; others were finding benefits in avoiding the commute. Perhaps most unexpectedly of all, from many managers’ perspective, performance was holding up or in some cases, even showing improvements.”

WFH suddenly started to look like a long-term value proposition. A way to increase inclusivity and diversity by hiring many people who would never work in a contact centre – because of the commuting or the hours – and also to increase flexibility and the potential pool of labour. If you are hiring people to be based at home then you don’t need to worry about hiring only those near to your office.

Some of the BPOs that had embraced WFH before the pandemic, such as the long-time WFH-focused Sensée, found that they were being asked to advise companies from their own industry and completely unrelated businesses. The paper says: “Sensée, longstanding in its commitment to the welfare of its home-based staff, was consulted by a number of organisations, asking for advice on issues from day-to-day team communication to recruitment, training and managing performance.”

75% of BPOs with home-based agents report much lower attrition. There have clearly been problems with some agents forced to work at home by the pandemic. In some cases they have no private space to setup a working environment at home, or they are in a shared home, or they just don’t want to work from home and experience negative feelings such as isolation. These results are dramatically different when people are hired specifically because they want to stay at home, rather than working in a contact centre.

The paper reports that most managers have no expectation of a rapid return to the office: “The 2021 Contact Centre People Engagement Survey, conducted by the UK’s South West Contact Centre Forum and Call North West found that just 4% of directors/managers expected a full return to the office in 2022.”

But the change in this industry is not just because of the move to WFH. There are many more factors that are shaping the BPO ‘new normal’, including:

  • Customer expectations: customers want to find help faster and with less friction. They would often rather use Google or Alexa than calling a customer helpline.
  • Automation: automated help is getting far better and the millions of home assistants show that people are much more comfortable asking a computer for help – Siri, Home, Echo, and Cortana are all getting far more useful.
  • Property: as leases expire on all those enormous contact centres will the BPO companies let them go? Will they create more strategic smaller city centre contact centres instead? Maybe the rapidly-emptying shopping malls could be an opportunity?
  • Flexibility: with more workers based at home there is an opportunity to offer shorter shifts and more flexible hours, even to move towards paying for each interaction, rather than for time.
  • Risk: a BPO should now be an integral part of a risk reduction strategy, offering a guaranteed way to stay connected to customers even if a similar health crisis happens in the next few years. Business Continuity Planning has to be rebooted.

All this is changing the role of the agent. BPOs need experts, not people on phones helping customers change a password. A customer reaching an agent now has probably asked Google, Alexa, and a chatbot for help – they have all the basic information and they now need expert advice. It will be hard to find subject matter experts at minimum wage anywhere.

Mike’s paper summarises this wave of change: “It is the coming together of these factors that lead us to the view that the ‘traditional’ BPO, built to provide a low-cost, high-volume service, is increasingly outdated. It might not be dead yet, but its days are numbered – and the sector is certainly in need of a re-set.”

Davies Consulting and Mike are right. There is an opportunity here for the BPOs that were already embracing different employee and client strategies. It is time for the entire BPO industry to stop talking about how they can manage the cost of interacting with customers and to start focusing on the value that great customer experience creates – smart BPOs will position their services as a partner with this goal in mind.

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