Nearshore Americas

BPO Customers Want Vendors Who are Flexible and Diversified

The wrecking ball pandemic that drove even the strongest outsourcing markets to suffer drastic drops in business provision has reconfigured the needs and requirements of every player along the industry’s value chain. 

At the start of that chain, is the industry’s source of demand: the buyers. These multinational organizations have also experienced the brute force of Covid-19, and it has rearranged their requirements too. 

Nearshore Americas talked with three decision-makers in major organizations, tasked with equipping their businesses with appropriate customer service provision in the new reality. They told us that while the fundamentals of the vendor partner relationship remain intact, the focus of what buyers want has changed. Here’s what we found out.

Burst Capacity

John Billings, senior director of global workforce and vendor management at Hilton

For John Billings, senior director of global workforce and vendor management at Hilton, the most pronounced change during the past two years has been the uncertainty that the pandemic brought to the market.

Globally, the tourism industry was brought to a standstill. Airlines went bankrupt, borders closed and the industry contracted. The chaos meant that customer service agents at call centers were vital in relaying information to Hilton customers. As vaccines allowed for borders to open, Hilton business grew, and additional agents were required often on short notice. 

The major change is around managing through uncertainty and retaining the utmost flexibility in operation, because the last few years has proven there are many elements out of our control,” Billings explained.

“Initially the concern was the drop in demand. Now, it’s more likely the pace of recovery. If this happens more quickly than we’re forecasting – and the forecasting is difficult to do right now – I will need a diverse network that can give me 500 agents in a week rather than relying on one single provider. We need partners that can provide that burst capacity to meet peak demands with little notice,” he added.

Geographical Diversification and Pricing Focuses Renewed

Norman Acevedo, associate director vendor management, LATAM global strategy at UnitedHealth Group

It’s critical for buyers to continually revise staffing and requirements because the situation we are in now means the curve that workforce management used to travel through is not the same,” explained Norman Acevedo, associate director vendor management, LATAM global strategy at UnitedHealth Group.

Call centers and BPOs can provide additional business continuity capabilities to their clients if they’re well-positioned across the globe. During the pandemic, the world’s major call center market almost ground to a halt, while India was also hit by a devastating wave of infections. Companies whose vendor partners had the bulk of their customer service operations with third-parties in either location suffered. Companies have learned.

Geographical diversification is a huge win for vendor partners when a new RFI or RFP is given. If a provider has presence in onshore, offshore and Nearshore, then this offers the diversification we need. Multi-site and multi-country operations add a lot of value because we don’t know what could happen in the future; we don’t know how long Covid-19 will continue to be a problem or if new variants emerge.”

The pandemic’s tailwind has generated global economic issues that have added to buyers’ concerns. The so-called Great Resignation in the US, hesitancy of returning to the office and the additional attrition that is bringing, as well as macro economic threats are all present.

“The effect of the global pandemic has brought changes to pricing. In the US companies are experiencing a lot of attrition and that impacts onshore operations. Companies have to deal with those costs, and BPOs have increased wages. In Latin America, inflation is hitting countries too. These all mean adjustments in contract pricing, which is a cost for us. So we are really looking for competitive pricing now,” said Acevedo.

Application of Technology, Training and Culture

Martha Cristina Martínez, senior vender manager at Chime

“Flexibility was something we talked about before Covid-19. But now, it’s taken on a different meaning and magnitude,” offered Martha Cristina Martínez, senior vender manager at US challenger bank Chime.

Chime, like many fintech and neobank companies, achieved strong growth during the pandemic as consumers looked for alternative banking options that provided enhanced digital functionality without the need to visit branches. But the addition of new customers meant strengthening its customer service capabilities, and adding to the 3,000 customer support agents the company had in place heading into the pandemic. Partnering with vendors who can guarantee longitude in agent tenure through its cohesive remote working approach and use of technologies stand out during this period of high attrition, Martínez explained.

“In negotiations, vendors tend to offer you the world,” she said. “But as we’re in a recovery scenario, we’re now looking at response times: How long would it take to get the entire operation working from home again? If we had to go back to the office tomorrow, how would that work? And what sort of tools does the company have to manage its workforce remotely?”

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While technologies have become a far greater part of contact center operations, not all vendors have kept up with the pace of change.

“The best providers are those that have stayed ahead of the pack by implementing better technology solutions for remote work and to retain agents throughout the work from home period and now as offices return,” she said.

“But many people don’t want to return to the office. So how is the company dealing with that? Does it have the right conditions for its people? What does its hybrid approach look like? It’s a cliche, but vendor partners need to think outside the box against what the BPO world was a few years ago,” Martínez concluded.

Peter Appleby

Peter is former Managing Editor of Nearshore Americas. Hailing from Liverpool, UK, he is now based in Mexico City. He has several years’ experience covering the business and energy markets in Mexico and the greater Latin American region. If you’d like to share any tips or story ideas, please reach out to him here.

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