Manage BPO Performance Before It Costs You

By Mark Cioni

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Organizations using BPO (business process outsourcing) often focus on traditional measures of success, such as reduced costs per customer contact or lower overhead. Certainly, these are valid metrics and part of a strong business case.

Where I’ve often seen BPO go a bit off the rails is in areas such as customer service outcomes, whose main stakeholders probably couldn’t care less about an organization’s cost structure. Indeed, the PC industry is rife with strong players who significantly eroded customer trust and loyalty with customer contact and field service failures arising in part from efforts to drive down costs.

The notion of performance management is used by world-class organizations to raise the bar for success; by focusing on outcomes that span functional areas, processes and information.

Whether your organization has active BPO initiatives or is in the process of assessing what to outsource to whom, thinking seriously about how to manage performance both within the BPO scope and across the larger value chains in the organization is critical.

Toward proactive, agile execution

First, for our purposes, a working definition of performance management: It is the set of processes, information, technology and organization components, crossing traditional functional and operational boundaries that enable organizations to see opportunities, make decisions and execute tactically in a proactive, agile manner.

Now that’s a mouthful and for this column I’m going to focus at a high level on processes and information. However, the premise that BPO must manage elements in both a process-centric and process-interdependent fashion to understand its true impact is important, and I believe will start to differentiate the value that BPO providers can bring to the table. Let’s take a closer look at two elements of performance management, those being process and information:

Process: A key focus area for performance management in BPO with characteristics that include:

  • Dynamic business process management capability that encompasses iterative modeling, design, instrumentation and monitoring;
  • Recognition and identification of adverse conditions and trends; and
  • Data capture that includes KPIs but that can also drive predictive, value-driven measures.
  • Customer contact centers integrating with field service are prime examples in BPO. The ability to gather and use traditional indicators such as average call time, resolution by service tier, and abandonment rates are still important but provide only part of the performance management picture.

    Being able to “peer under the covers” and understand, for instance, whether customers are actively using new online self-service touch points, or if this part of the process is sub-optimal due to system latency or out-of-date information, has become just as important to a modern multi-channel contact center.

    Even more important are measures that focus on customer outcomes versus the contact center’s view of success. If the contact center resolves a customer’s problem by shipping a new part, but the part never gets to the customer or is itself defective, the contact center may have hit its KPIs but the organization didn’t produce the desired customer outcome.

    Next Page: A key enabler of performance managementBack to Page 1

    There’s a good chance that the customer will either “talk or walk” and this represents a significant opportunity to retain that customer and the relationship, and proactively leverage this information for performance improvement.

    Information: A key enabler of performance management in BPO with characteristics that include:

  • Capability to detect changing conditions and respond in an agile manner;
  • Availability and accessibility in a “business time” frame of reference;
  • Collaboration that drives better decisions more quickly;
  • Shifts the focus from “rear view mirror” to proactive control; and
  • Provides the foundation for achieving sustainable performance improvements.
  • Let’s look again at the previous contact center example, assume a customer got the wrong part as their first outcome after their initial contact, and that the customer talks instead of walking. Ideally, at a high level, a performance management approach would help to drive customer satisfaction, performance improvement and customer loyalty.

    One way this might happen is the organization can “sense and respond” to the customer’s next contact, which is probably a less than happy conversation, in an expedient manner by having enough information in “business time” (meaning the customer doesn’t need to visit five different departments over the next 30 minutes) to confirm and admit the mistake.

    Next, the customer service representative on point might need to collaborate with inventory and Shipping to ensure that the right part is picked, packed and shipped next day, outside of their normal processes. At this point, we would hope to have a satisfied customer due to performance management, but it’s not nearly the end of this story.

    What matters to the customer

    The organization may have fixed one instance of this problem (“rear view mirror” focus) but suppose it’s been happening at an unacceptably high rate relative to customer contacts?

    An organization with a performance management approach might use process instrumentation in the contact center, field service and other areas to determine what happened (data) and use process monitoring to determine why (information).

    Then, perhaps via collaboration across multiple functional areas and process modeling, the organization could enact changes to minimize the chances of recurrence (proactive control).

    Finally, a follow-up contact to the customer that explains what went wrong, how the organization has responded, and perhaps some incentives for repeat business would aim to secure customer loyalty. In my personal view, given my unfortunate experience with too many of these types of problems, I’d remain a loyal customer if I just understood what was broken and how it got fixed.

    Today, all of us have heard enough of the “flat worlds” and “global business ecosystems” we need to navigate. It doesn’t matter what shape it has or what we call it, outstanding performance is crucial to BPO success, and not just in the areas of cost control but in those that matter most to your customers.

    So ask your current or prospective BPO provider how together you will both use performance management to achieve business objectives … the answer may surprise you.

    Mark Cioni is president of MV Cioni Associates. He has been helping global businesses to improve their decisions, operations and performance for more than 25 years and can be reached at mark@mvcioni.com.