The Magnificent 7 for local BPO's...

Last year we saw a spectacular fail of one of the local Australian BPO’s. There was, and is, a lot of discussion as to what happened. Some say bad management whilst others point to poorly negotiated contracts. Those of us watching the collapse from the outside can’t really say for sure and whilst there may still be pending official investigations we’ll leave that to the powers that be. The interesting point for me is whether this has any bearing or indeed indication of the health of the Australian BPO industry. 

Having an industry partner go down in flames, leaving employees and the tax office out of pocket, is certainly an embarrassment not just for the executives directly concerned but also for all of us as part of the greater Australian BPO family. There is no doubt that it sends a negative message both locally and globally about how things are run down under. As in most regions across most verticals there are good players and some that don't operate that well. I definitely think there are a number of good BPO players here in the Australian market that focus on the solution over simply filling agent seats but how do you know how to pick the better operators? The following elements, the magnificent 7, should be considered a minimum set of requirements to succeed:- 

1. BPO expertise; sounds obvious and I wish it were. I was reminded a few weeks ago when I met the new GM of a local BPO who exclaimed that you don’t need to know nor understand BPO to sell it. Absolutely wrong! You not only need to understand the ‘here and now of BPO’, you also need to have a pretty strong idea on what tomorrow will look like in terms of the potential components of a future BPO solution (bearing in mind some technology that will be common place in a few years might not even exist yet). A lack of knowledge will result in mis-selling that will convert short term revenue into long term pain.
2. Organisational expertise; change and transformational management are key elements to survival in a rapidly changing BPO world. We need to ensure that we make tangible investments in these areas both internally and from a client facing perspective. The BPO industry is in a genuine state of revolution currently with so many variables it's difficult to keep up. Those who can’t manage the change will probably be left behind.
3. Industry vertical expertise; BPO is about solutions not about agent numbers. In order to understand what solution is required you need to understand your client and the environment they live and breathe in. That means feeling their pain by taking on their issues. In order to successfully put yourself in the client shoes you need to fully understand the vertical in which they play.
4. Technology management; deciding on what IT vendor to engage and how you manage that vendor’s technology is critical to BPO operational stability. This is not as easy at it used to be and is only getting more difficult as technology innovation rapidly increases. The example of a local CM BPO choosing a telephony vendor that had just entered chapter 11 (bankruptcy protection) is a good one. Such a technology platform is obviously critical to any CM BPO business and yet engaging a vendor that has limited resources to support you might easily result in a less than stable environment. A lack of operational stability could certainly led to a loss of clients and even more importantly a loss of reputation. The premise of 'No one ever gets fired for buying IBM’ still rings true. Successful brands are successful for a reason, stray outside of the Gartner box at your own risk.
5. PMO expertise; signing the deal is just the start of the relationship, you need to onboard the client, stabilise the operation, build in your continuous improvement framework, etc. etc.. PMO needs to be viewed as a necessity rather than a ‘nice to have’ because if we get something like agent on-boarding wrong, the next thing you’ll be managing is the termination clause.
6. Innovation capability; one of the biggest issues I see with the current local BPO landscape is identifying 'points of difference'. I was told in a meeting recently that a local BPO’s recruitment methodology was a ‘point of difference’. They seemed surprised when I told them that the competition operated the same methodology. BPO is not rocket science and even with the top tier global players it's very hard to find any points of difference, so why should local players be any different. The only way to stand out from the crowd is to innovate. For example having a ‘global operating model’ is great but it isn’t enough unless you continually tune it to keep up with newly available processes and technology.
7. Digital (non-voice) capability;  over the last six months more than half of all BPO deals were non-voice. The tide towards web self-serve, chat and other digital channels is well and truly upon us. Local BPO organisations not only need to adopt digital we need to embrace it with open arms. This means addressing the soon to be obsolete voice infrastructure and investing in digital platforms that can bridge the 'today' into at least the 'tomorrow'.

The list above is by no means exhaustive but the ‘magnificent 7’ could certainly ride in and save the day for a local BPO in trouble. Those who ignore may soon be ignored...