Threats and risks to the BPO contact centre outsourcing industry in Australia

Business process outsourcing (BPO) essentially involves the contracting of the operations and responsibilities of a specific business process to a third-party service provider.

There are many reasons why an organisation outsources. Outsourcing provides a whole range of benefits including; helping increase a company’s flexibility, business process speed and efficiency are enhanced, employees may invest more time in core business strategies, control capital costs, reduce labour costs, start new projects quickly and reducing risk.

In addition, organisations look to outsourcers to provide process efficiencies and economies of scale, as well as continued investment in the latest technology, which can be more effectively cost-justified when spread across multiple organisations.

The types of BPO cover both front office, namely customer-related services, and back office which includes things like finance and accounting. The industries in Australia that have embraced outsourcing and third-party relationships are those from banking and finance, insurance, telecommunications and energy.

Most services provided by BPO vendors are offered on a fee-for-service basis with a variable cost structure. In Australia in many cases there is little that differentiates the BPO providers other than size. They often provide similar services, have similar geographic footprints, many have near or offshore capability, leverage similar technologies, and have comparable quality improvement approaches. However new technology provides fresh opportunities for increased quality, reliability, scalability and cost control, thus enabling BPO providers to increasingly compete on an outcome-based model rather than competing on cost alone. The opportunity here is to differentiate with a new offering, for example it may be the introduction of an additional marketing channel through the enablement of innovative technology.

In some cases, outsourcing involves the transfer of employees from the company to the outsourcing company or vice versa. It’s worth noting that a large part of the 2000’s, the major factor to work with a BPO was all about cost efficiency and reduction.

With the average length of a BPO contract being approximately 5 years; it’s important to continually monitor the sentiment of the relationship and to be constantly working the sales pipeline nurturing further business opportunities.

The future of the Australian Call Centre Outsourcing industry continues to show signs of growth with the potential to build a sustainable long-term business operation looking brighter than ever.

That said it is still important to remain aware and vigilant of the threats and risks to the BPO industry. There is no disputing that running contact centre operations in Australia is more expensive than any other destination. And organisations that utilise the services of BPO’s understand the risks to their business; data privacy breaches, underestimated running costs and overdependence on service providers.

Domestically some of the threats and risks for BPO’s include the following;

  • Technology has enabled a lower barrier to enter as a supplier, increasing competition
  • Lower cost of technology enabling organisations to access the latest contact centre technology in-house without the need to invest significant dollars as in the past
  • Online channels, marketing automation, digital transformation, content management, with the single greatest unifier has been marketing automation software linked with CRM systems
  • Employment costs and other associated labour costs
  • Competition; more global corporations are making a footprint into the market
  • Government regulation and consumer laws
  • Cloud technologies allowing organisations to think about “work from home” resource model
  • Consumer self-service customer engagement models & applications (sophisticated IVR’s) allowing consumers to help themselves on their terms

The contact centre space is becoming more exciting as new trends and technologies continue to emerge and where the traditional contact centre will need to rapidly evolve to become an omni-channel contact centre.

Artificial intelligence (AI) techniques for sales and marketing efforts to enable customers to successfully make purchasing decisions on their own time and using their own methodologies via an organisation’s website and online marketing is happening now and will be more so in the future.

The demand for high-level skills will increase due to the opportunities and challenges challenge of AI. As AI replaces process-driven jobs, BPO companies should shift their focus from traditional call centre services to higher value industries such as big data analytics, information management and applications development.

In respect to the inclusion of AI into the contact centre, AI and robotics are gradually replacing the more basic and low level tasks in businesses across a large number of industries. The prediction is that it’s only a matter of time before computers become intelligent enough to conduct telephone conversations with customers in the same manner as currently with a human contact centre agent.

At the end of the day we must not forget that we are all selling to human beings. Voice will always be here to stay, but customers will demand more; and remember the good old telephone is still the best channel to use for complaints.

To remain relevant, companies should keep up by assigning specialists or intensively training agents so that they may able to help clients on the spot with quality and precision. And there aren’t any channels or sources of information quite as powerful or credible as that delivered by knowledgeable, professionally trained human beings.

Running a call centre in Australia is cost intensive. Pricing models are being centred on performance, achievement of SLA’s, indicating movement away from the traditional fixed price model. BPO vendors are realising that the traditional sources of cost advantages, human capital, real estate and infrastructure costs, may no longer be sustainable. Vendors will need to initiate significant cost control and reduction initiatives, such as efficient utilisation of capacity, accurate cost planning techniques and technology on costs to meet future challenges.


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