Before exploring potential challenges, let’s discuss what BPO is. Business Process Outsourcing (BPO) involves companies delegating specific processes to a third-party firm. The main objectives are to reduce costs, free up employees’ time and resources, and enable companies to concentrate on their core business activities.
The BPO industry has become an integral part of the business landscape, offering enhanced efficiency, cost savings, and solutions that might not be available in-house. However, BPO presents unique challenges that are not typically encountered with an in-house team. Therefore, businesses looking to adopt this strategy must develop a different mindset to successfully outsource.
Here is an overview of common BPO challenges along with valuable solutions to overcome them:
Diverse Organizational Culture
Outsourcing provides companies with access to global talent but often involves the significant challenge of navigating cultural differences. Companies face two main cultural barriers when outsourcing: corporate and regional.
Corporate disparities emerge from the inherent differences between the partnering organizations, while regional disparities arise from the geographical separation between the client and the BPO service provider.
Solution: Understanding and adapting to each other’s organizational and regional cultures
The initial weeks of the partnership should focus on fostering collaboration and mutual understanding. During this phase, the third-party team will assimilate the client’s culture and ensure alignment in working styles and the overall work environment.
Ambiguous Data Security Protocols and Intellectual Property (IP) Management
One of the challenges in BPO is the risk to data privacy and intellectual property (IP). Collaborating with a BPO provider often necessitates sharing crucial company information, including essential processes and business assets. Additionally, you may need to share tools and resources.
A company’s foremost concern should be cybersecurity and safeguarding intellectual property, including business plans and trade secrets. Ensuring complete protection of IP and data is crucial, regardless of the company’s size. Inadequate data management can result in severe long-term consequences.
Cyberattacks are rising at a rate of 50% each year, with organizations worldwide experiencing an unprecedented average of 925 attacks per week. The average cost of a data breach has reached $4.24 million.
Signing legally binding contracts, such as an NDA, helps mitigate risks. Request that your provider sign an NDA at the start of the engagement. The risk of data breaches is reduced when the third-party provider adheres to strict data security protocols.
Another approach to avoid this issue is to partner with a trustworthy company. While the BPO industry offers numerous service providers, not all have strong data security measures. Look for features such as International Organization for Standardization (ISO) certification and stringent security standards when selecting a partner.
Frequent Employee Turnover
Employee attrition is a significant and persistent challenge in the BPO industry, with turnover rates averaging between 30% and 45%. This high turnover means BPO providers frequently need to replace departing agents.
Partnering with a BPO provider with high attrition rates can negatively impact customer satisfaction. New agents, unfamiliar with your company’s service procedures and brand voice, may handle client inquiries, leading to a decline in customer satisfaction.
Several factors influence turnover rates, such as company culture, job satisfaction, and opportunities for advancement. Agents might leave if they feel either underqualified or overqualified for their positions.
Additionally, some agents view contact center roles as temporary income sources while they search for other employment. Others may not consider contact center work a viable career path, finding the work environment unsatisfactory, the tasks repetitive, and the compensation inadequate. Furthermore, younger employees are more prone to frequent job changes compared to their older counterparts.
Solution: Developing more effective retention strategies
Employees will inevitably leave, but implementing robust retention strategies and fostering a positive work culture can help minimize attrition. Ensure that your service provider is doing the following:
- Recognizing and rewarding high-quality performance through incentives and rewards
- Enhancing engagement and morale with enjoyable activities and shared objectives
- Offering opportunities for career advancement and professional growth
- Familiarizing agents with various company verticals
- Improving training programs to upskill agents and strengthen their commitment to the company
Challenges in Measuring Productivity and Performance
Measuring performance and assessing productivity can be particularly challenging in BPO, especially when managing remote or offshore contractors across different time zones.
Originally, productivity was assessed by a straightforward ratio of output over time. However, this method doesn’t fully account for crucial factors like service quality or task complexity. To measure productivity effectively, it’s necessary to evaluate both the time spent and its efficiency. This involves choosing the right metrics and thoroughly assessing the performance of the entire team.
Solution: Implementing Project Management and Time-Tracking Tools
To tackle this issue, organizations can utilize project management and time-tracking tools. These resources are instrumental in boosting productivity and offer several benefits, including:
Real-time tracking of productive hours within designated timeframes.
Detailed monitoring of idle periods, including calculating idle-time percentages and sending notifications to agents.
Automated generation of productivity reports, providing actionable insights into how contractors utilize their time.
Recording attendance and punctuality.
Monitoring the applications and websites accessed by employees.
Additionally, some BPO pricing agreements may include time-tracking features. Carefully monitoring productivity helps identify agents with excessive work hours and promotes a healthier work-life balance.
When productivity levels fall short, team leaders and managers can investigate the underlying causes, provide additional training to team members who are struggling, or implement incentives to boost productivity.
Ineffective Team Communication and Management
Poor communication can occur even when both parties speak the same language, as misunderstandings or unintentional offenses can arise from a lack of cultural awareness. Differences in background, experience, education, and individual perceptions between teams can contribute to these communication issues.
Solution: Establishing ongoing interaction and maintaining open communication channels
Communication should be integrated into every part of the workflow. Utilize feedback loops, video calls, and various interaction methods.
Since in-person meetings aren’t possible with remote teams, building strong relationships through other channels is vital. Choosing video conferences over phone calls or messages can significantly improve connections with the third-party team.
It’s important to make sure all employees feel respected and included. Video calls, in particular, can foster camaraderie and reinforce team unity.
The Key Takeaway
Whether you’re considering outsourcing payment processing, customer service, or IT functions, it comes with its own set of challenges that can complicate the implementation of a business strategy. However, there are solutions available to address these issues and fully leverage the benefits of outsourcing.
Choosing a trustworthy BPO provider and thoroughly discussing potential challenges are essential steps. A reliable outsourcing partner should have positive client feedback, ample references that validate their expertise, and a dedicated team to support you throughout the process.
Searching for the ideal BPO provider? Contact us to assemble a dedicated team of experts and achieve outstanding results together.