Manage BPO Performance Before It Costs You

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 management