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The best business process outsourcing (BPO) partnerships do not appear by magic. Success in an outsourcing relationship requires parties to be on the same page. The third-party BPO provider and the client must work together to ensure clear communications and achieve the goals as planned.
Similarly, a mutual understanding of expectations prevents confusion, ensuring smooth and efficient business operations.
This article is for you if you want strategies to build a successful relationship with your third-party BPO provider. We discuss tips for managing outsourcing partnerships.
How to Build a Successful Partnership with a Third-Party BPO Company
So what is BPO? This strategy involves offloading non-core functions such as customer service, data entry, and payment processing to a third-party BPO company to minimize overhead costs and leverage cost-effective scaling.
Small and large businesses could use help from time to time. Hence, the BPO industry has become a multibillion-dollar sector. It was valued at $282.46 billion in 2022 and will continue to grow to $586.92 billion by 2030, showing a 9.6% compound annual growth rate (CAGR) during the period.
But why is it important to build a successful partnership with your third-party BPO provider? A good outsourcing relationship helps improve performance and client satisfaction. Clients can fully leverage the benefits of outsourcing when they establish open communication and work amiably with the BPO vendor.
Here are some ways clients can successfully manage partnerships with their third-party BPO provider:
Defining Expectations and Clarifying Objectives
Knowing what you want and communicating it to your outsourcing partner are crucial. Before choosing a provider, outline what you want from the partnership.
Clear objectives and expectations help you outline the responsibilities of the third-party BPO vendor. You can then share it with the provider before finalizing the contract. Doing so allows the third-party team to set the right targets and design corresponding strategies.
Here are the common objectives of outsourcing clients:
- To minimize labor costs. Fifty-seven percent of businesses outsource to reduce costs. Outsourcing, especially offshore BPO, saves money by optimizing your processes without requiring investments in personnel or infrastructure.
- To focus on core business functions. Outsourcing lets companies offload services, such as inbound and outbound call center operations, to enable them to focus on their core business.
- To augment staffing. Third-party BPO allows for scalable staffing. Clients can scale the team size up or down depending on their needs.
- To improve the customer support experience. A reputable BPO partner that offers customer service, tech support, and other front-office functions ensures end customers always have a positive experience.
Working with the Right Outsourcing Partner
The right BPO firm is not just a service provider; it acts as an extension of your company. It not only gains access to your confidential data but also helps you run your business. Hence, you must choose your partner wisely.
When choosing a vendor, consider the firm’s industry experience and ability to handle various clients. Also, ensure it has a robust transition protocol in case of adjustments in the partnership.
Drafting an Airtight Contract
Outsourcing contracts protect both clients and BPO providers from any unfavorable situation that might occur during the partnership. It also serves as the official document that outlines what each party can expect from the engagement.
It should cover every possible aspect of the outsourcing partnership and anticipate future situations. Therefore, all stakeholders must perform multiple consultations, meetings, and research before finalizing the contract.
Here is a guide to drafting a successful outsourcing contract with your service provider:
- Define the scope of the outsourced function, service levels, formally agreed-upon business targets, work schedules, and required deliverables from all parties.
- Seek advice from legal practitioners. Review local tax laws, investment-related policies, and other regulations that might affect your company.
- Make sure to treat all parties fairly. Look for a win-win situation when drafting the contract. The best deals have an equal amount of compromise and flexibility.
- Agree on benefits, rewards, and penalties if the provider fails to meet the agreed service levels.
- Plan an exit plan to more easily cope with changes.
Establishing Key Performance Indicators (KPIs)
Measuring outsourced work is vital if you want to track performance. One way to do this is by setting KPIs that gauge whether the third-party BPO provider meets your expectations.
That said, different KPIs apply depending on the outsourced work. The key is identifying which metrics apply to the function you want to outsource. If you are outsourcing a call center, for example, here are some KPIs you can use:
- First contact resolution (FCR)
- Average handle time (AHT)
- Call quality
- Customer satisfaction (CSAT)
- Net promoter score (NPS)
- Customer effort score (CES)
- Call abandonment
- First response time (FRT)
Understanding and Preparing for Risks
Working with third-party BPO firms comes with risks since you must give them access to your data, but this need not be a deal-breaker. Allocate time to learn about significant BPO challenges and prepare for them. This way, you know how to minimize the impact should you encounter any issues.
Common outsourcing problems include:
- Disconnection from end customers since you are no longer at the front line of their requests
- Security breaches as a result of giving your provider access to your information
- Hidden costs and pricing changes due to market fluctuations, workload increases, and equipment upgrades
Building Camaraderie Between Teams
Working from different locations, dealing with cultural differences, and overcoming language barriers put BPO partnerships at risk of miscommunication. Ensuring open communication helps mitigate this. So, establish a communication channel where internal and external teams can collaborate.
You can also share corporate culture and find common ground in your values and work methodologies. This lets you anticipate each other’s concerns and strategize to streamline workflow.
Providing Regular Feedback
Feedback is crucial for growth. Providing feedback includes commending the third-party staff for a job well done or addressing areas for improvement. Regular feedback helps fortify your partnership with the third-party BPO.
Commenting on the third-party team’s performance lets members know if they are doing well or need to adjust strategies to better serve you. It also helps them understand which part of the service is most important to them.
The Bottom Line
A positive outsourcing relationship leads to good outcomes for the BPO firm and the client. It improves the third-party team’s morale, enhancing turnaround times. It also makes outsourced operations enjoyable to manage and paves the way to success.
Constant communication, regular feedback, a mutually beneficial agreement, and cultural compatibility are the foundations of a successful and long-lasting BPO relationship.
If you are searching for a reliable BPO firm, look no further than Unity Communications. We can help you create and manage an external team that serves as an extension of your company. Let’s connect to discuss our services!