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Better and Leaner BPO in the 21st Century Requires a Holistic Approach

by Richard Jeffery, Chief Executive at AOMi

In the aftermath of the recession, BPO providers managing key processes such as customer service or technical support, have had to focus relentlessly on improving service levels, often on a lower budget.

As increasing numbers of businesses look to outsource many of their processes, such as sales, marketing and revenue generation, within tighter margins, there is an inevitable push for greater streamlining among providers. This all too frequently means that technology or process improvement is put under the microscope, without achieving the end-to-end view that reveals other fertile areas for optimisation.

A scan of the wider horizon reveals that major BPO providers are not only able to match these gains, but also to exceed them by boosting their capacity management capability.

Fundamentally this is about being able to target resources in a more efficient way after examining workload holistically right across an organisation. This approach means the volume of work is more fully understood and far more efficiently forecast.

Very frequently, outsourced operations such as customer service for example, are held back from pursuing this path to efficiency gains because they lack the ability to measure their own performance at a granular level. They are unable to build a detailed picture of how much time is spent on back office tasks and cannot precisely predict when demand will peak.

Back office operations become frozen into compartments with little or no flexibility of resource management because the organisation’s goggles are misted and nobody can see the entire process from one end to the other. The complex construction of SLAs can also be a significant factor that leads to this organisational rigidity.

However, experience of many projects in this sector shows that there is often a hidden 20% of capacity waiting to be extracted from most BPO operations that have not adopted leading practices in back-office capacity management. 

Since efficiency savings are now the battleground for obtaining new business – and keeping it – organisations are increasingly looking to secure the same visibility, productivity and performance for their back office operations as for their front-line functions, such as contact centres.

This kind of positive change comes through the blending of back office workforce optimisation software with work and capacity management and training. When combined with the necessary visibility, this produces a significant shift in attitudes that leads to real improvements.

This holistic method was adopted by the Multi-Client division at Capita, a leading UK provider of business process management and integrated professional support service solutions.  The new approach to demand and capacity management within the back office enabled the firm to enact radical improvements in the way it plans, controls and delivers services.

A number of factors were behind the requirement for change, including new contractual terms obliging the division to deliver the same quality of service at the same cost, while shortening service levels from five to three days. Effectively, the same number of people had to deliver an enhanced service.

The challenge was to meet an ambitious deadline for the controlled transition to operational practices that would enable the division to work with more demanding service levels. In response, Capita prioritised the development of the current operations management approach and the need for “a shared solution across accounts”.

The organisation made doubly sure that operations performance management software was installed and fully functioning, along with training and the adoption of suitable methodologies. As a result, Capita is now able to plan, control and deliver its services with greater confidence and exploit opportunities as they arise. Regulatory risk, for example, has been mitigated by cross-training staff in critical specialisms and thoroughly preparing staff about to work with new clients.

“It’s a mistake to think this was all about throwing more staff at the problem in order to achieve the required service levels and avoid fines,” said Capita Multi-Client MD Mark Randall. “Nor was it about reducing quality. What we have done is get a better understanding of team and individual performance. We have thereby driven –and continue to drive – performance improvements.”

Following this successful transition, productivity has ramped up the speed of service delivery, with work delivered in three rather than five days. It has also overhauled individual performance management and reduced overtime by 50%.

Now that we are in an age of heightened expectations about what enterprises can derive from outsourced contracts, the truth is that professional support firms can no longer perform conjuring tricks when faced with the need to reduce costs, maintain the quality of their services and increase the speed of delivery. The quick move to a system or process solution can certainly be helpful. However, as providers such as Capita are able to show, impressive progress is also being achieved through intelligent, people-focused approaches to capacity management.

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For more information, please visit the AOMi website.

Twitter: @AOMintl
Linkedin: Active Operations Management International (AOMi)

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