Nearshoring: The ‘go-to’ Solution

The last few years have been pretty rough for the outsourcing industry as it suffered at an international level: economic, social and security changes are responsible and if that wasn’t enough, nearshoring is on the rise.

Delivery Preferences

The biggest challenge in outsourcing governance has shifted towards downstream risk mitigation by choosing the best delivery location. The outsourcing world became fully aware of potential safety risks offshoring brought upon themselves.

The cost savings gap between India and other popular locations such as Central Europe and Latin America decreased to less than ten percent. Central and Easter Europe are also viewed as a safer location site to host your BPO and ITO services.

The close proximity to the main facilities made it possible for a shift in delivery preferences towards nearshore and sameshore options alike.

Having contact centres nearshore and sameshore is the current trend and there are no signs of any changes in the upcoming years.

The Growing Trend

The shift in delivery opens up new possibilities for all the countries gathered under the so-called nearshore umbrella. The number of nearshore sites themselves has grown significantly.

Managers need to be aware, everyone is gunning for that nearshore multi-billion dollar pie – you’re bound to encounter some really “exotic” places thanks to advertisement and marketing. Proven nearshoring locations include Canada, Latin America, Central Europe and Poland.

The Nearshore Zone

But what defines a nearshore location? There are two rules mostly used in the outsourcing industry. The first one is that you don’t need to cross the ocean to get your nearshore site. The second one is quite similar, up to 5 hours of flight.

We believe that nearshoring locations should be aligned along a spectrum of potential outsourcing sites. On one end of that spectrum are locations such as China and India, on the other Poland and other Central European countries that specialise in BPO and ITO services.

Geolocation should never be the determining factor when looking for a potential nearshore location. Linguistic and cultural ties are also a key factor, even education similarities and directness of communication can be a deal-breaker.

Take the above factors into consideration before you choose a nearshore location or a partner since they tend to play a far more important role than they are given credit for.

BPO & The Cloud: A match Made in Heaven

It’s quite easy to notice the synergies between cloud computing and BPO.

Businesses around the globe acknowledge the benefits of cloud-based solutions and are aware of the competitive advantage those provide. Many enterprises are pushing for transitioning to a cloud-based environment.

This solution is mostly praised by small and mid-sized businesses as it provides a big cost reduction since there is no need to maintain complex in-house systems that require frequent upgrades and support.

This new level of flexibility a cloud-based environment provides is not only faster but more efficient with resource utilisation; your company will have even greater control over IT spending than ever before.

It’s no wonder that BPO and Cloud go so well together since both offer agility, scalability, reliability and cost reduction.

Traditionally, the BPO service provider maintains a large data centre infrastructure with all the technology to run the customer’s business processes. However, if the service provider has his infrastructure in the cloud, it can make it available at a much lower cost. That can even open the possibility of offering business processes from day one, thanks to utilising shared platforms, applications and sometimes whole infrastructures to transform their customers’ business processes.

Cloud’s advantages

The greatest benefit is the coming of the virtual shared service centre. The virtual centre support staffs remain in their offices but work together online in a standardised way.

 

Cost reduction

  • Hosting standard applications. No need to host these applications individually, since cloud BPO providers host them for their clients.
  • Offload capital expenses and move to an operational expense model
  • Control over expenses and operational costs, providers offer most of these services as a pay-per-use.
  • Utilization. Providers are able to achieve a higher utilisation by balancing differing timeliness and work peaks.
  • Reduced need for a disaster recovery plan. Cloud connectivity is a built-in disaster recovery measure.

Standardised

BPO providers have optimised their processes. They also have access to the latest platforms and newest technology. Clients can access these at a much lower cost than if they had to develop them in-house.

Free up internal resources

Since they no longer have to maintain the infrastructure.

Potential risks and challenges

Data protection seems to be the biggest concern since sensitive corporate information is being hosted and accessed over the Web. Service providers must be able to assure their clients about their security practices. (employee background security checks, segregation of employee functions and sufficient encryption.)

Also, compliance with government regulations is a key concern.

 

If BPO providers will be able to solve these issues Cloud will be here to stay for good and will be the most often picked solution amongst customers and providers alike.

 

Reducing Costs While Maintaining Efficiency & Versatility

When operating a multilingual contact centre, customer service costs can add up fast, and over a short period of time they will quickly add up to A LOT.

If you are looking to improve your business’s bottom line, or provide better customer service, you need to implement these methods to reduce customer service costs without sacrificing the support part, and still providing exceptional customer experience.

Equipment

Re-evaluate your equip­ment, it could be cost­ing you more money than you think.  For example, automat­ing your contact centre’s tele­phone sys­tem for the less used cus­tomer ser­vice func­tions could potentially save time and reduce cost on pay­roll and train­ing. Cloud-based technology can also centralise your whole contact centre into one consolidated customer service centre.

  • Phone Sys­tem: Find an appropriate calling system that will streamline the process. An automated attendant or system that reroutes calls to correct contact centre agents quickly can be a life saver, especially during customer service peaks
  • Soft­ware: Is your CRM software integrated with your calling and scheduling systems? If not, make it your top priority.
  • Stor­age: Most on-site systems can be moved to the cloud, especially if they take up valuable space and resources. Evaluate if doing so will help you save on utility costs.

Multi-Channel

Embracing the multi-channel approach, implementing it and then aligning all your communication channels is what all contact centres should aim to achieve in 2015.

It’s not only about the technology, it’s about the people. Your contact centre is as strong as its core employees – the front line grunts, contact centre agents.

Make sure that your teams can handle multiple communication channels, be it email, phone call, live web chat or social media. Assigning two people per campaign to each communication channel might seem a reasonable choice, but in the end, it might cost you more.

Remember about attrition and turnover rates, which despite the efforts of contact centre managers still plague the industry to this day. Train each representative, they need to provide exceptional customer service on each communication channel – versatility is essential.

Also in the case of returning customers, if the same agent handles the quarry throughout all communication channels, it adds a new depth of personalisation thus creating a compelling experience for the customer resulting in increased customer satisfaction.

Cutting customer service costs is not about blindly “swingin’ the ole axe”  and reducing budgets, it’s about making your business more efficient.

Upgrading software, as well as hardware, will lead to increase in employee efficiency while embracing the multi-channel approach and centralising all communication channels will lead to increase in customer satisfaction, both of which will in the long-term lead to better customer retention.

Evaluate budgets, look for ways to increase efficiency, and only then cut costs.