Over the last few years, the Business Process Outsourcing (BPO) industry has been treading the path towards maturity at unprecedented rates. This increased saturation in the BPO space has meant that potential customers are enjoying an abundance of BPO provider options to choose from. Stemming from this constriction, the critical challenge for emerging BPO companies at present, is to be able to differentiate themselves from within the crowd of burgeoning providers, in the eyes of the customer who is increasingly seeking more value from its BPO provider.

On the one hand, increased competition has enhanced savings opportunities for clients by driving down the real cost of outsourcing. On the flipside however, small-scale BPO organizations are having to develop substantial and specialized business intelligence for verticals that they operate in, with limited time and resources at their disposal. For established contractual arrangements, delivering according to agreed-upon service-level agreements and driving process efficiency is at the essence of this exercise. But specifically for such BPO organizations, it is also becoming the sole means to survival.

By default, emerging BPO providers have had the luxury to leverage already developed industry best practices. However, with the confluence of shrinking space and increased demands for incremental value, the hymns of best-practices are becoming outdated. What the customer now wants is not just to govern its outsourced functions through best-practices, but to also have the option to leverage the ability of its BPO provider to evolve such commoditized practices to enable accelerated growth. The importance of multi-vertical knowledge accumulation for BPO providers has thus never been of more significance.

Such advancements in the BPO industry has also had broader implications in terms of relationship management. For embryonic BPO providers, the challenge historically has been to sustain operations with simultaneous accommodation of strategic and directional guidance from the customer in how outsourced functions are designed and operated. However, in the current scenario, the customer is willing to trade-off stake in the client-provider power dynamics, provided their demands for additional value are met.

Industry trends reveal that in the process of strategizing for initial outsourcing, or during the process of contract renewals, customers are increasingly inclined towards outsourcing end-to-end processes, culminating in the driving out of silo-process outsourcing. The broadening of scope is thus transforming client-provider relationships into strategic-partnership models whereby complementary of service provision is rising to the fore as the decisive factor for customers. It is no wonder then, that the competency of a BPO provider is being evaluated on the depth of its industry-vertical expertise, and ultimately its capability for innovation within that space.

The maturing of the BPO industry has also meant that despite being a business caveat, the deficit of trust between customer and service provider, to an extent, has been curbed. However, it is crucial for BPO companies to realize at this stage, that while the increased level of governance agreements have countered customer perception of viewing outsourced functions as the ‘Achilles heel’ of their business, the trust deficit will perhaps now be shaped through customer focus on deriving value beyond the usual mantra of cost savings, and the service provider’s inability to provide.

Thus, for the customer, the equation in effect boils down to whether it’s BPO provider has the sufficient knowledge base to enable a leap towards sustainable long-term growth of the business. For the emerging BPO provider the question that materializes then, is whether it has the capability and resourcing to match customer expectations in order to stand-out, and in turn be able to forge long-term partnership.

Arthur Lawrence BPO Consulting Website:
http://www.arthurlawrence.net/outsourcing/finance-and-accounting/
Email: info@arthurlawrence.net
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Twitter: https://twitter.com/ALBPOConsulting
LinkedIn: https://www.linkedin.com/company/arthur-lawrence-bpo-consulting?trk=company_name

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