The contact center space is under a lot of pressure right now. As things stand, the status quo doesn’t look sustainable.
Business Process Outsourcers (BPOs) play a big role in the contact center space, with 58% of contact center leaders reporting that they outsource at least some of their service capacity to BPOs, according to Deloitte Digital’s recent Global Contact Center Survey. However, the same piece of research also found that that number is expected to rise to 64% in the next two years, suggesting that BPOs are set to play a growing role in how many brands will choose to support their customers in the future. But, more importantly, it also suggests that BPOs are likely to play a central role in helping brands tackle some of the current contact center challenges.
To understand how outsourcers are helping brands meet the current challenges facing many contact centres today and how they think the contact center will evolve in future, I recently spoke to Cathrine Jooste, President of the Business Process Outsourcing Division, and John Samuel, EVP and CTO, at CGS, a global provider of applications, enterprise learning, customer experience and outsourcing services, on my podcast.
Jooste and Samuel agreed with Deloitte’s findings and said that their own market intelligence also suggested that the demand for outsourcing is set to grow in the coming years. However, they noted that in the midst of that growth, they also expect to see a significant degree of consolidation in the BPO space in the coming few years.
Three trends
This consolidation, Jooste believes, will be driven by three major trends, and together, they will drive a fundamental reshaping of the BPO industry. The first trend is the emergence of demand for next-generation services from outsourcers in areas like generative AI, robotic process automation, process modelling, data science and cyber security. The second trend is the geographic and linguistic diversity needed by global and fast-growing brands, and the third trend is the rising demand for the outsourcing of increasingly complex services.
This is already happening within CGS’s own portfolio. To illustrate, Jooste and Samuel cite one market-leading technology client that specialises in security services and rely on CGS to handle their sales, professional services, technical support, all levels of their customer service, plus all of their back office functions. This allows their client to focus on their core proposition: security offerings.
However, the client also expects CGS to deliver value through innovation. That has meant that CGS have had to disrupt their own business a few times, where they’ve been able to implement automation or make process efficiency improvements that have helped reduce customer support volume. That has had financial implications for CGS, but to make this work, they are focused on playing the long game, reliant on the idea that if their client’s brand keeps growing and they keep helping it be successful, then they will be along for the ride.
CGS are not alone in this regard. New and fast-growing players like Horatio CX are increasingly seeing the same demands from their customers and are offering much of the same flexibility.
These trends are likely to prove challenging for a significant number of different players in the BPO space. For many of the smaller players, while they might have the entrepreneurial appetite to take on this change, they may not have the breadth of capabilities required nor the financial resources needed to invest in or accommodate this shift. Moreover, it’s not going to be all plain sailing for some of the larger players either, particularly those who haven’t invested in next-generation capabilities or have been resting on their laurels in recent years, enjoying healthy profits and growth.
What these trends are doing, however, is leading to a new and emerging commercial model, one that is not just about volumes and seats but about the value that the outsourcer is delivering and creating. To succeed, outsourcers will need to take more of a partnership approach rather than one that is purely commercial and contractual in nature and one that is aligned around strategic values and common goals rather than one that is governed purely by financial metrics.
For brands that are looking to identify and choose a partner to capitalise on these trends, Jooste suggests that “It all comes down to core values. When you select a partner, it’s much like entering into a marriage. There’s going to be bumps along the way. So, make sure your values are aligned, as that will help you navigate the challenges ahead.” Samuel builds on this and says that brands should look to “Partner with companies that are like you, respect you and can improve your brand. But, also make sure they can innovate with you. Don’t just hire a company that’s just going to follow some strict guidelines contained within a scope of work (SOW). Ask: Can they innovate? Can they move you forward? Can they actually be a great partner for you and for your brand?”
That’s great advice.
But, here’s the big lingering question: Will the move to a different type of outsourced relationship help address some of the major challenges that contact centers are facing?
Time will tell.
However, I do know I’d rather face the challenges ahead with a partner rather than just an ordinary service provider who might hesitate when it comes to doing the right or better thing particularly if it comes at a cost to them.
