Multi-process HRSourcing

Focus on Results Before Costs

In a leaner economy, outsourcing’s value proposition is best found via a holistic calculus.
By Darryl Prater
As the global economy recovers in 2010, conservative customer spending and tight competitive markets have made the margin for operational error razor thin. Companies looking for outsourcing partners are changing performance expectations. Perhaps the most significant shift in expectations is that financial customers are finding the true cost of outsourcing is more effectively measured by the organizational outcome, instead of by dissecting the hard cost of each transaction. Keep in mind that outsourcing services measured by organizational outcome can make it easier to understand and manage the true value of outsourcing. The following are key points to consider when contemplating outsourcing.
Outsourcing is a Holistic Approach
Financial companies that outsource for customer care by the interaction or by the minute ignore both the greater performance potential of a skilled outsourcing partner and the contracting organization’s own progress toward its larger goals. By contrast, companies targeting, acquiring, and growing customer relations using a holistic approach—one that prioritizes and rewards specific outcomes—should more easily see the impact that outsourcing has on the bottom line.
In the social media age with its anywhere, anytime connectivity, cost alone can no longer be the end game. When news of a bad customer experience can travel in the time that it takes a blogger or tweeter to hit the “send” button, more businesses than ever before are focused on providing the total customer experience. Companies contracting for outcomes are exploring fresh ideas and seeking new answers to ensure the ongoing success of their businesses and the satisfaction of their “instant-on” customers.
Minimizing Risk, increasing Flexibility
The right outsourcing partner offers companies the ability to enhance their customers’ experiences by increasing flexibility and minimizing operational risks. Find a business process outsourcer (BPO) that is knowledgeable enough to reduce your overall business risk and is able to bring its competencies to bear on your specific business situation. Technology, variable staffing, and geographic diversity are some key factors that you should always consider.
Technology is a business enabler. Outsourcing collaborators don’t have to start from scratch. Look for the BPO’s ability to deliver technology-hosted solutions for applications including quality assurance monitoring, telephony, and analytics. These are key components for assuring lower costs, greater uptime, and improved customer satisfaction.
Outsourcing partners already have the technical savvy and infrastructure in place to manage large-scale deployments that can move calls wherever and whenever needed around the globe. Your business wouldn’t need to build a telephony infrastructure or bring in-house the skill sets necessary to oversee a complex global grid. A BPO’s ability to provide economies of scale offers more redundancy, more fail-over capabilities, and a more transparent global deployment of resources than your company might be able to do on its own by just connecting a few global centers. 
Many companies experience seasonal volume spikes. Seasonality makes it challenging to manage a workforce, because of peaks and dips in call volumes. It should be factored into all decisions, especially when contracting for outcome versus individual transactions. Outsourcing partners have developed hiring practices to handle short-term temporary peaks and are able to seamlessly recruit, hire, and train resources in minimal time. This BPO capability also mitigates the risks associated with additional infrastructure costs including facilities and telephony.
Businesses without seasonal spikes can still benefit from variable staffing. Product launches, product recalls, and other periodic events can drive additional volume. Regardless of the frequency of call spikes, an outsourcing partner that already has tools in place to screen and hire qualified candidates, and e-learning programs to train these individuals, might be a better option than trying to bring the recruiting and training process in house.
Geographical diversity is usually considered when looking for an outsourcing collaborator, but sometimes its importance is underestimated. Selecting an outsourcing partner with a dispersed workforce lessens the risks that can come from natural disasters, pandemic threats, and potential multiple local menaces. Geographical diversity also offers companies a blended model of labor rates across the globe, which can be a key factor in funding and planning.

Aligning Interests
Businesses make a significant investment of time and resources in creating and nurturing their customer experiences every day. If your business is going to trust these hard-earned customer relationships to a partner and contract for outcome, make sure it is a partner that is going to be there for the long term. Choosing a BPO that has years of experience, similar over-arching goals, and a strong financial base goes a long way to alleviate any fears of losing what has taken you so long to build.
Risks can be managed to the benefit of both your company and the outsourcing provider. Does your potential partner possess both the process capabilities and the strategic knowledge of your industry to help your business achieve the desired outcomes?  An accountable BPO will conduct regular joint planning sessions to identify and measure progress toward mutual business goals. Performance and progress are in part dependent on open, regular dialogue between your company and your outsourcing partner, whether or not any identified issues exist. The right outsourcing partner will not only share your customer experience goals, but it can also add value to a specific business function that you might not currently possess expertise in or that you don’t consider a core competency.
The speed and flexibility of outsourcing collaborators to ramp up and launch new offerings reduces the risk level of your business and is an investment in the future. Partners who can quickly deploy technology, hire staff, conduct training, and be production-ready in a shorter window will help grow revenues more quickly for your business. When contracting for an outsourcing company, don’t overlook benchmarking your internal business processes now and where you want to be afterwards in order to lay the groundwork for the best customer experience possible.
A Word about Security
The stakes are high for companies when it comes to security, and this must be factored into contracting for outcomes. Security is a challenge 24 hours a day, 356 days a year. Outsourcing partners offer physical security standards including badge in/out monitoring, virtual workforce tools, and restricted computer access. They can also earn industry-
appropriate certifications that demonstrate security compliance such as HIPAA Privacy Rule certification in the healthcare field or PCI certification for protecting customer account data. Talk with others and ask industry analysts. The right security is not only about economies of scale  but it’s also trust, built by long standing customer relationships.
A Measure of Success
Today’s decision-makers are responding to economic pressures on all fronts. They continually evaluate key business drivers, including customer opportunity, loyalty, and retention. Successful business leaders want outsourcing providers that can calculate the “true cost” of each transaction in an outcome-driven way. Real-time analytics is a means to transform customer interaction data into clear, actionable views of emerging issues, such as high call volumes, customer defection, product issues, and more. These insights can then be leveraged into actionable events that can be launched in a matter of weeks rather than months. These measurements can turn companies from
reaction-driven to actively managing customer behavior through the integration of interaction data with real-time analytics.
Analytic and proxy metrics help companies measure productivity and develop their customer profiles and segments, monitor transaction data, and leverage sales reports and Web site data. Analytic metrics, although extremely accurate, can sometimes delay productivity findings for a long time, because they are applied after the campaign or sales cycle is complete. On the other hand, proxy metrics assign an estimated dollar value to each outcome in the campaign or sales cycle, offering a much earlier comparison of results. Although proxy metrics are more arbitrary than analytic metrics, mid-course corrections can be made as needed for better accuracy. An outcome-driven BPO understands when and how to apply both analytic and proxy metrics to measure success.
Overcoming Hurdles
When considering outsourcing, many companies have difficulty understanding the true value and real cost of outsourcing. This is a major hurdle that must be overcome to enter into a successful partnership. Businesses have to believe the BPO can do the process more efficiently and effectively than they can do it themselves. A BPO must be able to demonstrate that it understands what running a company well means and how outsourcing can make a company run even better. This starts by having the BPO take a fresh look at your business processes in order to build an accurate picture of your organization’s desires, concerns, and issues in order to establish basis for the true value of outsourcing. If you do not understand your own in-house performance, you will not be able to understand the real value of outsourcing.
In 2010 and beyond, the right outsourcing partner should not only be able to demonstrate both process and strategic industry knowledge, but also be able to translate its knowledge into a holistic, measurable offering that is better than your company could do on its own.  Today’s most successful financial organizations want BPOs that bring true value by offering end-to-end solutions, not specific transactional functions. They are contracting for outcomes. It is the new bottom line. 

Darryl Prater is senior vice president of financial services at TeleTech.


Tags: Multi-process HR, Sourcing

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