2020 Will Redefine CX Outsourcing and Managed Services With Technology Advances and Economies of Scale
By Jeff Tropeano
As the impact of a differentiating Customer Experience (CX) continues to drive investment in delivering not only a great CX, but competitive CX, the trend towards outsourcing contact centers is continuing to rise, with no end in sight.

Organizations whose success is predicated upon ensuring customers are happy, loyal and willing to recommend products and services to others are learning that the art and science of customer service is becoming ever more complex, even as we strive to make customer experiences ever more simple and satisfying.

For decades, many have believed and acted upon a notion that money can be saved by making the customer do the work – by figuring out for themselves how to fix their issues through “self-service” for example.

Given the multi-faceted nature of CX today, with multiple channels available to reach for assistance, delivering a personalized conversation with customers has grown more difficult to do without the right software and analytics, and this new complexity is moving organizations to opt into outsourcing or “co-sourcing” CX.

Contact Center operations now are responsible for a growing range of critical functions, including traditional customer service, telemarketing, technical support, billing resolutions and even debt collection.

The empowerment of consumers across all industries, from mobile services to mobile devices, from consumer electronics and e-commerce, from healthcare insurance to financial services, has changed the definition of what it means to be competitive when it comes to delivering the BEST CX.

Across a variety of industry analyst firms, the size of the market may vary, but 100% of all those who forecast growth confirm that the move to Business Process Outsourcing (BPO) will continue to grow for years to come.

The U.S.-based BPO market hovers between $20-25 billion, with steady CAGR predicted based on consensus estimates.

The U.S. contact center BPO market has faced challenges from off-shore and near-shore competitors, and while this will continue to be the case, shifts in the U.S. economy and advances in technology and rising global labor rates starts to paint a rosy picture for on-shore offerings.

For example, advances in cloud-native technology allow agents to work remotely, placing additional downward pressure on real estate expenses associated with traditional brick-and-mortar contact centers.

While digitally-enabled consumers who will soon be replaced by digital natives (consumers who grew up with a silver smartphone in their hands, rather than just a silver spoon) demand multi-channel service options, products and services are becoming more complex, requiring high tech trained agents, and innovative automated services including “friendly” chatbots programmed with natural language processing to be able to conduct conversations that appeal emotionally.

There will always be a need for in-house contact centers, and this is a growth opportunity, not a threat to BPOs. Hybrid models make sense, when in-house operators tap into specific expertise to address multi-channel and highly technical requirements. Hybrid models also make sense during peak seasons, for example signing up for healthcare benefits in a one-month open enrollment period, or serving customers during the holiday season, which we’re in today. Augmentation to address volume has become its own business segment with some BPO providers focusing on “swing shift” offerings.

Regardless of the use case, as technology enables the diversification of communication channels between customers and corporations, multi-channel customer support options require higher-skilled agents capable of adapting to and fully addressing complex customer service demands.

Forrester research indicates that a whopping 95% of customers use more than one channel to communicate with companies, and the digital shift in consumer contact methods, as well as the availability of multi- channel delivery and service options will push companies to seek support from BPO service providers specialized in training higher-skilled agents.

These agents are versed in a variety of technological resources that help resolve customer support issues, enhance customer retention efforts, and drive sales optimization strategies through cross-selling and up-selling opportunities – and they are augmented by advanced software solutions, including automation and AI built into the processing of personalized information.

While these technological advances will continue to improve the delivery of business outcomes, costs related to implementing and maintaining these technologies without tapping into BPO capabilities will continue to grow. Overseas operations will find it increasingly difficult to catch up, given their models are based in investments in brick and mortar facilities and legacy telecom infrastructure, rather than in sophisticated software platforms including advantages made possible by AI and Natural Language Processing (NLP).

Technical debt is further exacerbated by the advantages of increasingly high-quality Voice over Internet Protocol (VoIP) technology, which has eliminated costs associated with pay-per-minute expenses.

In addition, mobile and cloud-based and cloud-native solutions allow more domestic BPO agents to work remotely, while also streamlining the new agent hiring and onboarding process.

Forrester research indicates 34% of U.S. corporations plan to invest in more remote agents, and the percentage of contact centers with remote employees has more than doubled over the last decade.

Organizations looking to compete based on the best CX are, through BPO and hybrid models, are able to gain access to state-of-the-art systems and committed, experienced team of professionals by outsourcing CX to a qualified firm that specializes in recruiting, training, and equipping agents to address the “great expectations” their customers have – for fast, free and friendly service.

Finally, the cost of outsourcing can be substantially lower than running an in-house contact center, and with hybrid models, organizations can experiment with a blend of in-house and outsourced solutions.

Ultimately, the changes in technologies and the inevitable economies of scale are poised to make BPOs more attractive than ever in the new year and new decade ahead.

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