Outsourcing is dead if not done properly, says industry report

The outsourcing sector needs to sharpen its act or face losing significant business, according to business leaders interviewed in the inaugural APAC and ANZ BPO Market Report by management consulting firm Enlighten.

According to the report’s findings, the sector is heading towards a “sink or swim” moment with a rapidly growing sense of dissatisfaction from BPO corporate customers towards their outsourcers. Leaders agreed that the outlook for the sector is one of tumultuous change and will remain challenging if it continues to ignore customer needs.

Tougher market conditions underpin the turbulent outlook, as BPOs face increasing pressure from new competitors,

disruptive technologies and digital automation. This is compounded by the rise in client expectations. Clients are clearly demanding more than cost-effective solutions from their providers – they want quality, efficiency and a greater customer experience for themselves, as well as for their own customers.

However, there are opportunities for innovative participants in the sector, with more than half of the survey respondents (58 per cent) expecting to spend more with their outsourcers in the short-term, citing cost-savings as the primary driver.

At the same time, however, close to half of the survey’s respondents (48 per cent) also warned that their longer-term investment decisions with outsourcers depend on the ability of BPOs to change quickly.

Brent Churchill, Managing Director, of Enlighten says, “Cost-effectiveness is no longer enough to guarantee the future of BPOs – not when there are newer high-tech and more innovative solutions readily available. Outsourcers will get left behind if they can’t find ways to deliver a great customer experience. It’s a customer-driven market and BPOs can no longer simply do what they have always done in the past”

He further says, “It is imperative that the industry step up and make strategic changes beyond short-term tactical measures. BPOs must reinvent themselves in order to swim and not sink. They must introduce more visibility and transparency in their operations, so they are more efficient, customer-focused and can deliver exceptional results.

Outsourcers who aren’t operating properly will struggle. The BPO sector at large needs to learn from this report and change the way it’s servicing its customers.”

The report further found that BPOs lack innovation and are resistant to change. Of the survey’s respondents, 48 per cent are concerned about the lack of visibility and transparency of results and poor quality control by outsourcers. This combined with a lack of process automation has led to outsourcers and clients butting heads. The report also found several other obstacles that BPOs face including the threat from new technology, regulations and compliance sensitivities, and a lack of the right talent creating a massive challenge for the industry.

The report concludes that although some outsourcers are actively redesigning their operating models and management systems, there are still too many who aren’t listening or addressing customers’ changing needs.

The report urges BPOs to take more strategic and proactive action to address their customer’s growing complaints. The future of the sector now rests on how the outsourcers respond over the next 12 months.

The APAC and ANZ BPO Market Report was conducted in conjunction with Shared Services Outsourcing Network. It draws on in-depth interviews and surveys held between June and September 2018 with 200 executives from a broad range of private and publicly listed companies

View the full report HERE

 

Request further information - Article