By Steve Rudderham and Michael Blankman
The main advantage of operating multiple BPO delivery center sites while utilizing various vendors is that it provides access to a global talent pool across geographies and suppliers to ensure an optimal mix of resources for each engagement. A multi-site arrangement not only affords the client continuity in the operation as their business grows, but also a greater level of agility to quickly adapt to changes in the market. In addition, it provides the added benefit of having multiple vendors competing with each other.
Vendor Management is Critical
A prerequisite for any BPO buyer considering multiple vendors and/or sites (MV&S) is a vendor-management program in place. Capgemini, one of the world’s leading BPO providers, recommends the following:
For the relationship to be successful the outsourcer must be involved; there is no room for absentee management.
Success will not be achieved by constantly invoking contract terms. There is still a widely held belief that the outsourcer’s primary management role is to get “blood from a stone.” This comes from fear, not leadership.
Don’t expect the vendor to continually improve the business process without an ongoing dialogue. An outsourcer absolutely expects to benefit from a vendor’s specific technical expertise and commitment as well as any best practices that the vendor may have implemented throughout their broader client base. The outsourcer will always have the intuitive edge and absolute business knowledge of their specific industry.
A clear set of Service Level Agreements (SLAs) and Key Performance Indicators (KPIs) must be in place. There should also be financial ramifications for missed targets. It is important that the SLAs are easily tracked; many programs go astray and are not enforced. Once in a penalty situation it is advisable to create a process where the vendor is able to earn credits against previously levied penalties.
A reasonable amount of dedicated account management with the vendor is a necessity. The outsourcer should have some personnel input and the vendor needs to have a dedicated, autonomous quality group. By utilizing MS&V, the outsourcer may be able to take advantage of a larger pool of resources as different vendors will have different recruiting experiences by region.
Liaison Team Maintains Links
The liaison team created by the outsourcer as the link between the heritage business and the vendor is a very integral role. This team is responsible for:
■ Involvement in daily management
■ Monitoring the SLAs on an ongoing basis
■ Overall management of the quality program and performing quality reviews (monitoring, mystery shopping, etc.)
■ Acting as the interface to the relationship managers and their clients
■ The most important role of the liaison team is the development and management of the ongoing training and curriculum programming. Without this discipline, it becomes very difficult to effectively utilize multiple vendors or easily move the program should the relationship with the vendor falter.
Multiple Sites and/or Multiple Vendors (MS&V)
Many of the aforementioned benefits can be achieved with a program that focuses solely on multiple sites. However, by integrating multiple vendors into the strategy, additional benefits can be realized including:
Geographic Diversity – From a business continuity standpoint, having multiple sites protects you from unforeseen disasters, large or small. It is important to note that although calls might be assigned to vendors by priority or complexity, if the training and curriculum has been developed correctly (including access to tools and information), all calls should be able to be answered regardless of location.
Labor Arbitrage vs. Premier Service – Although politically delicate, there are environments in which an outsourcer can segment their client base by complexity or sensitivity. In such cases, call volume can be split between a lower cost provider and premier provider. In this situation, an outsourcer might utilize a Latin American nearshore provider with a less expensive offshore provider or take advantage of different regions with cost differentials.
Talent Acquisition – By utilizing MS&V, the outsourcer may be able to take advantage of a larger pool of resources as different vendors will have different recruiting experiences by region.
Competitive Benchmarking/ Management – Perhaps one of the greatest benefits of MS&V to an outsourcer is the ability to competitively manage their partners. Assuming the training and quality measurements are comparable, the outsourcer can use the same baseline metrics for comparison. On a monthly basis these results should be discussed individually sharing overall performance results and quarterly performance reviewed with all vendors simultaneously. It is fair for the outsourcer to benefit from implementing non-proprietary best practices across the board and for vendors to improve comparative results. As a result, the vendor may be awarded additional volume, including a general provider (non-sensitive, less complex, etc.) receiving premier volume.
Steve Rudderham is Capgemini’s VP of Client Engagement, and spoke on the issue of vendor management at Nexus 2012.
Michael Blankman, a global outsourcing senior advisor, can be reached at: firstname.lastname@example.org.