[HROA Essentials] The growing army of internal BPO experts

On the eve of the 10th anniversary of www.bpo.com, the SBPOA talked with longtime BPO expert Deborah Kops. We discussed the past, present, and future of BPO and shared services. Below is an article extracted from our chat that focused on the growing numbers of BPO experts working within companies.

To see the full interview with Deborah Kops, click here.

The Good Client

Even though the BPO industry has not developed as quickly over the last ten years as some had thought it would, there is a discernable maturity in buyers of BPO services which is giving rise to what I call the 'good client'. For the most part, clients understand that they must have skin in the game, and that transferring 'my mess for less' without a hand on the throttle does not yield expected results.

Companies still outsource for basic reasons: to cut costs and to avoid investment. NelsonHall's most recent research bears this point out, "Over the past twelve months there has been less emphasis on transformation of customer-facing and industry-specific delivery capability and a greater emphasis on removing cost and improving the quality of information from support functions."*

Managing the outsourcing relationship

To most efficiently handle the outsourcing relationship, clients have now come to the conclusion that they need to have certain skill sets in house. As a result, there is a movement toward building a competency called global sourcing which is the ability to buy and manage services, opposed to the procurement of office supplies or travel.

For example, Proctor and Gamble decided to outsource not only to cut costs, but they knew that they could not take their back-office functions any further along in an innovation curve. The better option for P&G was to change focus and manage outsourcers' efforts/investments in back-office functions.

Rather than hire a large staff to drive, manage and implement innovation in back-office functions, companies are creating cross-functional teams to manage the relationship with an outsourcer, who is best-equipped and experienced to create innovation in back-office functions.

There is a growing understanding that changing business architecture is not for the faint of heart. It takes different skill sets. It is not a matter of calling up your friendly local outsourcer, committing a contract with them, and then walking away.

*NelsonHall's Global BPO Contract Activity and Developments: H1 2006