By Michael Blankman and Steve Rudderham
One of the most intriguing and interesting outsourcing arrangements is the ability to operate multiple delivery center sites while utilizing various vendors. The advantage of such a program is that it provides access to a global talent pool across geographies and suppliers to ensure an optimal mix of resources for each engagement. A multi-site arrangement not only affords the client continuity in the operation as their business grows, but also a greater level of agility to quickly adapt to changes in the market. Additionally, it has the added benefit of having multiple vendors ‘competing’ with each other.
A prerequisite for any outsourcer considering MV&S is a vendor-management program in place. Capgemini, one of the world’s leading BPO providers, recommends the following:
For the relationship to be successful the outsourcer must be involved; there is no room for absentee management.
Success will not be achieved by constantly invoking contract terms. There is still a widely held belief that the outsourcer’s primary management role is to get “blood from a stone.” This comes from fear, not leadership.
Don’t expect the vendor to continually improve the business process without an ongoing dialogue. An outsourcer absolutely expects to benefit from a vendor’s specific technical expertise and commitment as well as any best practices that the vendor may have implemented throughout their broader client base. The outsourcer will always have the intuitive edge and absolute business knowledge of their specific industry.
A clear set of Service Level Agreements (SLAs) and Key Performance Indicators (KPIs) must be in place. There should also be financial ramifications for missed targets. It is important that the SLAs are easily tracked; many programs go astray and are not enforced. Once in a penalty situation it is advisable to create a process where the vendor is able to earn credits against previously levied penalties.
A reasonable amount of dedicated account management with the vendor is a necessity. The outsourcer should have some personnel input and the vendor needs to have a dedicated, autonomous quality group.
With the rapid growth of outsourcing into Latin America, we have begun to see quality assets being stretched thin in some countries. By utilizing MS&V, the outsourcer may be able to take advantage of a larger pool of resources as different vendors will have different recruiting experiences by region.
The liaison team created by the outsourcer as the link between the heritage business and the vendor is a very integral role. This team is responsible for:
- Involvement in daily management
- Monitoring the SLAs on an ongoing basis
- Overall management of the quality program and performing quality reviews (monitoring, mystery shopping, etc.)
- Acting as the interface to the relationship managers and their clients
- The most important role of the liaison team is the development and management of the ongoing training and curriculum programming. Without this discipline, it becomes very difficult to effectively utilize multiple vendors or easily move the program should the relationship with the vendor falter.
Multiple Sites and/or Multiple Vendors (MS&V)
Many of the aforementioned benefits can be achieved with a program that focuses solely on multiple sites. However, by integrating multiple vendors into the strategy, additional benefits can be realized including:
Geographic Diversity – From a business continuity standpoint, having multiple sites protects you from unforeseen disasters, large or small. It is important to note that although calls might be assigned to vendors by priority or complexity, if the training and curriculum has been developed correctly (including access to tools and information), all calls should be able to be answered regardless of location.
Labor Arbitrage versus Premier Service – Although politically delicate, there are environments in which an outsourcer can segment their client base by complexity or sensitivity. In such cases, call volume can be split between a lower cost provider and premier provider. In this situation, an outsourcer might utilize a Latin American nearshore provider with a less expensive offshore provider or take advantage of different regions (i.e. Brazil and Costa Rica) with cost differentials.
Talent Acquisition – With the rapid growth of outsourcing into Latin America, we have begun to see quality assets being stretched thin in some countries. By utilizing MS&V, the outsourcer may be able to take advantage of a larger pool of resources as different vendors will have different recruiting experiences by region.
Competitive Benchmarking/ Management – Perhaps one of the greatest benefits of MS&V to an outsourcer is the ability to competitively manage their partners. Assuming the training and quality measurements are comparable, the outsourcer can use the same baseline metrics for comparison. On a monthly basis these results should be discussed individually sharing overall performance results and quarterly performance reviewed with all vendors simultaneously. It is fair for the outsourcer to benefit from implementing non-proprietary best practices across the board and for vendors to improve comparative results. As a result, the vendor may be awarded additional volume, including a general provider (non-sensitive, less complex, etc.) receiving premier volume.
At the end of the day, performance should drive call volume. Furthermore, it is possible that different metrics may be in place for average speeds of answer, abandonment rates, talk time, etc. depending on the call profile in place among each vendor. This will have to be taken into account during review.
Redundancy – Multiple locations and multiple vendors also allow for a level of redundancy to be created, often without adding additional cost to the outsourcer. For example, multiple sites will add capacity if scale is needed to meet daily volume spikes or seasonal fluctuations. Redundancy in systems will probably not be available, as both outsourcers are not likely to share the same topologies. Redundancy in account management is beneficial as well. The broader access an outsourcer has to information and ideas the better. Vendor account management can become a de facto member of the team.
Curb Appeal – It is not unusual for call centers to handle a significant amount of client visits. The visits allow the outsourcer’s clients to have “hands on” familiarity with the vendor, and if there is true transparency a vendor’s location and management can be leveraged to help win business. Multiple sites add to the probability of having attractive locations, while still taking advantage of labor arbitrage. There are many examples of domestic US businesses taking advantage of vendor sites, especially those with nearshore (certain onshore locations as well) operations for client meetings or user conferences. Utilizing a vendor location is often a better alternative to choosing a glitzy neutral location.
The right nearshore location in Latin America is a vital part of any vendor profile. Latin America fills the need for access to high numbers of superior bi-lingual talent. The same time zone is a major benefit to combat the fatigue and stress to all parties involved in the program by eliminating unnecessarily long work days. The ease of travel is greatly enhanced for everyone and the cultural affinity and ease of assimilation cannot be underestimated.
There is a tendency for companies post-outsourcing to remove themselves from the business/industry they are no longer managing. This is especially true in the call center industry. It is important to stay involved in associations and networking. It is the only way to truly stay current on trends and developments including potential providers.
All relationships inevitably have a shelf life and will eventually need to be reviewed and adapted where appropriate. Only by continuing to be vigilant and robustly involved in the industry will the outsourcer maintain an edge.
Steve Rudderham is Capgemini’s VP of Client Engagement, and spoke on the issue of vendor management at Nexus 2012.
Michael Blankman, a global outsourcing senior advisor, can be reached at: [email protected]