Quality Still a Key Driver in BPO Selection

The topic of offshore outsourcing or business process outsourcing (BPO) gets a lot of attention when we start to experience an economic slowdown. While U.S. companies are searching for ways to trim fat, outsourcers are stepping up marketing initiatives to tout their money-saving solutions that can accommodate budget-stressed companies.

While outsourcing itself is a concept built on saving money, increased competition in the global BPO market has made the option even more attractive for those U.S. companies seeking lower cost alternatives to doing business. A new report from industry research firm IDC (News - Alert) reveals that this phenomenon is set to continue into the near future.

According to IDC, the competition for BPO is no longer concentrated in one or two hotspots. Instead, the industry is becoming increasingly competitive with strong players emerging throughout the world. In the firm’s latest report, 36 outsourcing players spread around the world were profiled and all are competing on a global level.

Datamonitor has also examined this trend in BPO. In a new report, Business Trends: Knowing Your Contact Center Outsourcing Customer, respondents were asked to choose from a list of countries those they would or would not consider outsourcing to in order to better assess what companies are looking for when seeking to outsource.

Those popular spots listed in Datamonitor’s report included: Chile, Hungary, Mexico, Panama, Poland, and South Africa. While many locations gain in popularity simply due to their proximity to major Western locations, many closer-to-home locations can be pricey, yet delivery quality.

While both reports examine the current strength of India as a primary BPO location, both acknowledge that the country may be losing its leading edge. According to the IDC report, some Indian BPO’s are raising prices due to the inflation of the rupee. Other outsourcers in other locations may take advantage of this change to undercut price, but companies should be leery of such tactics as they may get what they pay for — cheap.

Another phenomenon in the contact center industry is that of homeshoring. This rapidly growing complement to offshore and nearshore contact centers is emerging not only in North America, but around the world.

While there is significant opportunity in this area of the market, it is still very new and the majority of companies are not using work-at-home-agents. In fact, data shows that only 40 percent of North American respondents have even considered such a strategy.

At the end of the day, regardless of the location and even price, quality is still the key differentiator for companies seeking BPO providers. For those that skimp on quality, the ramifications will be swift and obvious as customers flee to better serving companies. Such a price to pay negates any savings the company was hoping to achieve. As competition continues to intensify throughout the world, quality will drive success.