Working with a BPO in a Digital World


Working with a BPO in a Digital World

The use of Business Process Outsourcing (BPO) providers by contact centers has skyrocketed, both due to a frenzied labor market and the explosion of digital channels.

With an increasing number of organizations turning to staffing augmentation—or increasing the volume of interactions they leverage a BPO for—to meet escalating customer expectations, understanding how to work effectively with an outsourcer has become mission-critical.

The COVID-19 pandemic has fueled much of this growth in the use of BPOs. While the Great Resignation has had little effect on attrition rates in the contact center—they’ve held steady at around 42% annually—it has greatly complicated efforts to replace all of those agents who leave an organization.

There’s simply too much competition and greater choice for people who can work remotely for a wider variety of organizations.

At the same time, the pandemic accelerated customer adoption of digital channels, forcing contact centers to change their workforce management (WFM) processes significantly as a result.

The nature of digital channels—simultaneous, non-contiguous, and often delayed—has significant implications for how contact centers manage not only their own teams but also, increasingly, their BPO customer service partners.

Just a quarter century ago, BPO services were typically restricted to telephone contact centers. But outsourcing has dramatically expanded in recent years to encompass a wider variety of tasks—and the accompanying employee skillsets.

Working with a BPO can pose a challenge … because you must consider not only your own resources but those of your BPO partner.

Along the way, the nature of the partnerships between outsourcers and contact centers has changed. It has moved from a “black box relationship”—where the BPOs simply provided labor (often using overseas employees) with little to no transparency and limited communication—to a true partnership.

Where the BPO is treated as an extension of the contact center team, sharing data and systems, including WFM solutions.

Working with a BPO can pose a challenge when it comes to WFM because you must consider not only your own resources but those of your BPO partner.

You must ensure that you can not only provide an accurate requirement based on contractual agreements but also react when the BPO provider is unable to meet the required demand. And, if you’re like many contact centers, you need to be able to do that with multiple BPO partners simultaneously.

Here’s what you need to know about working with a BPO in an increasingly digital world.

How to Define Your Outsourcing Strategy

Ask yourself: Which interactions will you outsource?

How will you decide which customers or interactions the BPO will handle?

Some contact centers sort by channel. However, a larger proportion sort by degree of difficulty of the interaction, having bots take care of the easiest customer issues, using outsourcers for slightly more complex needs, and reserving complex inquiries and the highest-volume customers for their own agents to handle.

Consider, for example, a customer seeking to change their address who gets bogged down in the IVR system; this is a really easy interaction for a BPO agent with access to the company’s system to handle.

If your company has international operations, your strategy gets a bit more complex. This is an area in which a BPO can offer a lot of value, for example by supporting Polish, Mandarin, or any of the languages spoken in India. With large BPOs employing upwards of 100,000 agents, there is a wider variety of skillsets to pull from.

Ask yourself: How will you create BPO demand?

Working with a BPO often requires contact centers to provide a “requirement” to them, either in the form of calls and average handle time (AHT) or productive hours.

These requirements can be calculated using a fixed portion of your total contacts (e.g., 30% of your volume handled by your BPO) or derived from intervals in which you do not have enough internal staffing to meet client demand.

In either case, it is normally the responsibility of your internal resource planning team to provide the BPO with requirements on a regular basis.

But the process of determining these requirements can be complex, and it can’t always be done from within your WFM solution due to system limitations. This is not only time-consuming but also causes the forecasting process to become segmented from the internal methods that utilize WFM.

There are a few common ways to create BPO demand.

  • Calls and AHT. One of the more traditional methods of planning for a BPO is to use a forecast and AHT model, and this is normally associated with contracts that are paid on an interaction basis and combined with service-level agreement (SLA) targets.
  • In this method, the in-house planning team provides the interaction forecast, and the BPO determines how many people it needs to answer those calls within the SLA.
  • You can do this using a static percentage or a dynamic allocation, which leverages work rules and a WFM solution that can understand when internal and BPO employees are available, enabling it to allocate contacts accordingly.
  • Productive hours. The productive hours model is one of the most common ways to work with a BPO because it gives the contact center greater control over required resources.
  • With this method, the in-house planning team still needs to generate a forecasted demand and AHT to generate a staffing requirement for the BPO.
  • This process utilizes both contact types and management units to derive the BPO productive hours staffing requirements. It also allows workforce managers to calculate true staffing requirements for multi-skilled environments.
  • Because there are efficiency gains when employees are multi-skilled, this method can help reduce the overall spend on BPO, as it factors any multi-skill efficiency into the BPO requirements, reducing the number of productive hours needed.
  • Schedules. You can also give BPO partners the schedules you want them to supply in any given week. This is slightly different from the typical forecast or productive hours model, but it gives your in-house planning team full control over the schedules you would like the BPO to cover.
  • To get a holistic view of your entire operation (including your BPO), you must be able to represent the “supply” of your BPO in conjunction with your internal resources.
  • In many cases, however, organizations struggle to see how this supply overlays with their existing resources. You can then leverage a WFM system to analyze in-house schedules against the entire demand and build new schedules in addition to those that have been created to fill any gaps.
  • It is important to fully understand the contractual agreements with BPO partners; this will determine which of these methods is the best fit for your organization. Consider looking for a WFM solution able to accommodate multiple methods for BPO planning, for the greatest flexibility possible.

Ask yourself: How will you measure BPO performance?

If you’re working with a BPO, the overall performance of your contact center is tightly tied to that of your BPO. So, it’s important that your teams have real-time visibility into how the BPO is performing against the “lock” forecast or productive hours target.

Among the common ways to enable visibility:

  • Connect the BPO’s ACD system to your internal WFM solution. This enables you to monitor BPO adherence and track the performance of the BPO against expected levels.
  • Have the BPO use your in-house ACD, which can automatically feed BPO data into your WFM solution.
  • Use a data feed. If neither of the above methods are possible, your team can use a data feed to regularly upload historical performance data. This can give the in-house team the same level of visibility into contact volume, AHT, and productive hours.

Each of these methods enables you to see how the BPO is performing against forecasted demand, AHT, and SLA and make adjustments or changes to resources as needed. This adds an additional layer of visibility, aiding proactive decision-making and allowing your operations teams to better manage productive hours delivery in real time.

Ask yourself: Are you and your BPO digitally savvy? Is your WFM solution?

Last but not least, you need to consider how digital has changed your contact center operations.

While digital channels offer a wealth of opportunity for sales, service, and support organizations to better meet the needs of their customers, they also make WFM infinitely more complex. As the number of channels increase, so too do the skill set requirements and customer expectations that accompany them.

The old ways…no longer suffice when dealing with digital channels…

In addition, the demands of contact switching due to interruptions and simultaneous interactions on digital channels add to employees’ cognitive loads or individual employees’ abilities to juggle contacts and responsibilities.

There are a variety of strategies to manage cognitive load—for example, leveraging tools with algorithms that ensure that “low” cognitive loads do not take precedent over “high” loads. They dynamically define load per type of contact and automatically adjusts employee capacity as needed—and each will affect your staffing requirements.

The old ways of collecting data, calculating staffing needs, and generating schedules—then doing it all again as conditions change—no longer suffice when dealing with digital channels, where customer interactions are no longer sequential or contiguous in nature.

A digital-ready WFM solution delivers significant benefits; in fact, a recent report by Aberdeen found that firms with digital-savvy WFM programs achieve 3.6x greater year-over-year (YoY) growth in agent productivity (15% versus 4.2%) and 3.0x greater YoY increase in agent utilization rates.

Look for WFM solutions that are created specifically for digital interactions; capabilities such as choosing service goals by channel, priority selection or threshold discernment to absorb interruptability can deliver both the accuracy and the flexibility today’s contact center requires.

Enabling a True BPO Partnership

Your customers expect more, and a BPO can help you deliver on those expectations. Whether you’re looking to scale up, move into a new territory or simply free your agents to focus on higher-value tasks, a BPO can help you meet forecasted demand.

By ensuring that you and your BPO partner have the tools needed to not only generate accurate staffing requirements, whether using fixed contractual targets or overflow based on in-house schedules, but also deliver insight into the impact of BPO support on your KPIs as well as visibility into the BPO’s performance, you can enable truly proactive decision-making and set your contact center up for success.

Paul Jarman

Paul Jarman is CEO of NICE CXone (formerly known as NICE inContact). He is responsible for driving the innovation, growth, and customer success of the CXone cloud contact center business, helping global enterprise, midmarket, and government organizations deliver exceptional experiences that build relationships that last with their customers.