Business Process Outsourcing (BPO) has been a well-used and successful business model across many sectors, including financial services. But to ensure success when undertaking the procurement of BPO services, it’s critical to take into account a series of key factors throughout the procurement process.
Business process outsourcing isn’t just a case of “out of sight, out of mind”. So, while the benefits of BPO are numerous, care must be taken to select the right supplier for your project and for your company. Below, we present a checklist of some of the main things to consider when going through the procurement process for your new BPO provider.
BPO Procurement Checklist
Check your processes
Outsourcing your current processes is likely to offer you a heap of benefits, especially when it comes to cost. However, it’s important to take an audit of any processes you’re looking to outsource. The best business process outsourcing companies will work with you on Business Process Management (BPM) to make sure that you’re not outsourcing bad processes and will actually fix bad processes as part of the transition. Bad processes won’t deliver on customer satisfaction, efficiencies and accuracy.
You should take the outsourcing process as an opportunity to undertake due diligence on your processes, so that you can get the best out of the upcoming change programme, and take advantage of a BPO provider’s better technology and processes.
Deep Domain Experience and Expertise
Don’t ever underestimate the value that deep domain experience can provide, especially in a highly regulated sector such as financial services. An acute understanding of customer needs, regulatory requirements, as well as industry trends is vital to be able to provide a good service with solid governance and compliance.
Every sector has a unique environment (both macro and micro) as well as its own set of unique challenges and rules. In the financial services sector itself these factors are changing rapidly, so it’s essential that your suppliers can keep up, and successfully adapt.
Customer Centred Thinking & Design
Reducing cost to service can often be the primary driver behind organisation’s outsourcing. Whilst this is the primary driver, the approach to migrating, transitioning and setting up servicers needs to put end-users/customers at the centre. Without happy customers, organisations have no business.
Working with a BPO provider with experience in delivering customer-centric solutions, and that can support organisations in customer retention strategies, will assist you in meeting the operational efficiency benefits desired. They will also enable your organisation to excel in growing its brand, and creating a loyal customer base.
Prepare to Innovate
When going through the procurement for a BPO provider, you should be looking at their approach to innovation. Good business process outsourcing providers offer excellent value when they’re bringing ideas to their clients, and are always looking for ways to improve the service. Simply taking a process or series of processes, or a set of products, and carrying on in BAU mode isn’t going to deliver on your longer-term goals.
As the macro and microenvironments evolve, and market demands develop, your BPO provider should have an ingrained culture of innovation and continuous improvement. Without this, your services won’t be agile and adaptable to changing customer needs.
Culture and values alignment
As with any supplier, a shared understanding of what matters and an alignment of culture is a good foundation for success. With BPO this is even more critical, because a BPO provider is an extension of your operations, representing your organisation in the marketplace, and directly delivering services to your customers.
Getting a good understanding of your prospective provider’s culture and values during the procurement process, and getting to know the key parties involved, will support your due diligence. Visit their sites (Covid restrictions permitting), talk to their front-line teams and check out their social media.
Without a solid alignment of culture and values, you’re at risk of not delivering on customer promises, of experiencing clashes and miscommunication, and of a failure of the whole programme.
As with anything in life, there is a risk to BPO. However, a capable BPO provider should actually serve to minimise risk through their services. What is key for the procurement of BPO is an understanding of risk appetite, and the presence of robust risk management protocols. Throughout the procurement process, and especially in a heavily regulated industry, your provider should demonstrate a solid risk management framework, supported by qualified and experienced personnel.
You should be looking for a provider who takes a proactive approach to understanding the regulatory environment, and who uses that understanding to help you to manage that risk.
One of the main benefits of BPO is the ability to react quickly to changing environments. We’ve seen how important flexibility is in 2020 during the Covid-19 pandemic, and how businesses have needed to adapt quickly to changing customer needs. Financial services and other sectors have had to adapt to some huge changes, and with little notice.
BPO providers should be able to scale up services in response to such factors. This is especially true if the changes needed fall out of scope of your own company’s capabilities. Bringing in expertise from outside your business gives you the opportunity to stay ahead of the game and deliver a good service to customers, even under difficult circumstances.
Successful BPO Procurement: What it Looks Like
The benefits of BPO are clear, and with a keen focus on the above points, a successful BPO partnership is likely. A partnership aligned on values and culture, with good solid processes as a foundation is a good start.
The next step is to monitor and review regularly, working with your provider on opportunities for continuous improvement. As always, a BPO partnership needs to be nurtured, and should evolve over time to ensure success now and in the future.
Could Target Be Your Perfect BPO Partner?
As an experienced provider of outsourced lending and investment processes, we can help drive your business forward. Discover more about our BPO services and contact us today.