Beyond BPO and into knowledge process outsourcing

Beyond BPO and into knowledge process outsourcing:-

Martin Kochman explains why the role of Business Process Outsourcing is changing. He believes it is going up the value chain and argues that firms can access talent unavailable in their domestic market.

Organisations have been outsourcing and offshoring business processes for many years now, to take advantage of the lower cost of labour in developing countries such as India or China. Many of these Business Process Outsourcing (BPO) contracts have focused on large scale transaction processing, frequently in 'non-core' processes such as accounting or human resources, or in areas of perceived lower value or complexity.

Low-value, 'lift and drop' contracts have run into some severe and well-publicised problems. In the UK, most of us have either had, or heard about, a bad experience with an offshore customer service agent usually suffering from inadequate language skills or a lack of knowledge. On the other side of the fence, the offshore call centre agents themselves often face daunting overnight shifts (to field daytime calls from the other side of the world) and a job offering limited professional challenges to skilled graduates. Under these circumstances it's not surprising that offshore staff attrition rates per year can routinely be over 50% and that serious questions around customer satisfaction and operational stability have become common.

As these problems have hindered the development of offshore call centres and even prompted some organisations like LloydsTSB to use their onshore call centres as a selling point, other factors have led BPO providers to offer more complex, knowledge-based services that sit far closer to the core business. These higher-value processes, while still offering reduced cost, also take advantage of the wider availability of qualified talent in developing countries, exploit the benefits of operating in different time zones and allow added flexibility for ad-hoc or short-term projects.

Moving up the value chain

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