A new BPO landscape
When you are travelling, sometimes subtle shifts in the landscape creep up on you, while at other times a new feature on the horizon signals unequivocally that you have reached a new territory. I was thinking about that this week on my way back from Manchester from excellent meetings with our new BPO Users Strategy Group and with Industry Council.
The latest development in the BPO landscape ranks in the new territory category: IBM announced last week that it had sold its global customer care BPO business to Synnex for $505 million, a deal billed as the largest global customer care services transaction in outsourcing history.
It involves a strategic partnership between Synnex subsidiary Concentrix and IBM which will build Concentrix into a global top 10 player with 45,000 staff and more than 50 delivery centers. The strategy is to create a powerful partnership to deliver high-value customer interactions for clients worldwide.
The IBM-Concentrix deal is the latest example of high profile merger and acquisition activity that has radically redrawn the BPO map in the last two years, creating a market characterised by fewer, larger and more powerful players.
The logic driving these deals involves economies of scale and extended global reach but also the union of strengths and core competencies to create comprehensive skill sets and technology toolkits which can deliver innovation and expertise to organisations. Consequently BPO players are responsible for an increasingly large proportion of UK customer contact and service operations, including the public and private sectors.
For years, the BPO share of contact centre activity appeared to have reached a plateau but this is no longer the case as the UK is undergoing the biggest wave of outsourcing since the 1980s. It is now the world’s second largest outsourcing market and there is no current indication of the growth trend being reversed.
The drivers include a need to run leaner more cost-effective operations. However, increasingly organisations are seeking a partner that can also add value and knowhow, particularly in areas such as omni-channel contact, social media, software solutions and IT hosting services.
An ability to engage confidently on a wide spectrum of issues is becoming a pre-requisite for senior customer contact executives. Also, there is a keen awareness that the ramifications of getting things wrong can be severe - outsourcing now tops employment issues as the number one litigation issue.
We set up our new BPO Users Strategy Group to meet a need for a network that would allow people brokering or managing BPO contracts to share experiences and learn from each other in a supportive environment. The inaugural meeting included representatives from a diverse group of organisations, some with more than a decade’s experience in successfully managing BPO relationships, while others are on the brink of a new tender or considering outsourcing solutions for the first time.
We had an excellent presentation from National Savings & Investments (NS&I) which gave us a fascinating behind-the-scenes understanding of the critical stages of their BPO tender process which took three years from pre-planning to the successful conclusion of a landmark seven year outsourcing deal with Atos in May.
NS&I was focused on maintaining operational excellence not just throughout the process but beyond it and demonstrated its commitment to ensuring the best outcome for customers via a commitment to CCA Global Standard©.
Global Standard© accreditation is increasingly recognised at the highest levels of the financial services sector as an important continuous improvement and performance benchmarking tool. It is now written into Treasury guidelines and it is also increasingly recognised as a valuable means of ensuring consistency when entering into a new business partnership.
We also had a lively ‘Ask the Expert’ session with BBC Audience Services which has a long-term outsourcing partnership with Capita. The BBC shone a light on important ‘people aspects’ of outsourcing, providing an interesting perspective on how to deal with staff concerns about transferring to a new employer and maintaining staff engagement during periods of transition.
A dominant theme at the meeting was the importance of continually working on the relationship and developing a mutual understanding of key issues when you have an outsourcing partner in order to deliver the best outcome for staff, customers and stakeholders.
We’ll be sharing the learnings from the first meeting with members of the group shortly and we’d be delighted to welcome more new members on board. There is an opportunity to shape the agenda to meet your needs, whether you want us to run a ‘Dragon’s Den’ session with BPO suppliers or to stage an ‘Ask the Expert’ session with someone from your sector.
To find out about how to get involved or to register for updates on the group please contact Ashley Reid