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Outsource magazine: thought-leadership and outsourcing strategy | November 1, 2014

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Visions of the Future: The Next Decade in BPO

Visions of the Future: The Next Decade in BPO
Outsource Magazine

This article originally appeared in Outsource magazine Issue #32 Summer 2013.


This is an extraordinary time for the BPO space, with huge leaps in business technology, process, and theory taking place against the backdrop of tumultuous economic conditions, the ongoing evolution of globalisation, and the social and mobile revolutions playing out across the world. But where will all this change take us? For our biggest-ever feature, we asked over 40 commentators from right across the space to give their responses to specific questions in order to glean at least some idea of the path ahead of us. Some of what emerged is relatively straightforward, some counter-intuitive, some provocative, some perhaps a little too radical for comfort. But together, our contributors’ thoughts combine to produce a compelling and at-times terrifying vision of the future – a future for which, however it comes, we all need to be ready…

For the main body of the article, with experts addressing one ‘umbrella’ question, see below. To read individual responses to several more focussed questions, which appeared as box-outs in the magazine article, click on the following links:

How are buy-side attitudes driving the evolution of the BPO space?
John Willmott, NelsonHall

What will be the future game-changers for F&A outsourcing?
Stan Lepeak and Ron Walker, KPMG

How will the geographic distribution of sourcing delivery evolve over the next decade?
Charles Green and Hansa Lyengar, Forrester Research

Why is Total Cost of Process key to the future of BPO?
Cathy Tornbohm, Gartner

How will BPO providers’ business models evolve over the next decade?
Saurabh Gupta and Eric Simonson, Everest Group

What are the future risks in global BPO and how can they be tackled now?
John Keppel, ISG

How will process automation impact the future of BPO?
Duncan Chapman, Source


What do you see as being the key trends, technologies, people or organisations that will define the BPO space over the next five to ten years?


MARK LEWIS

Partner, Head Commercial Practice, Berwin Leighton Paisner
There is a perfect storm gathering for “generic” BPO processes like F&A. Factors:
1. The state of US and European economies – currently and for the foreseeable future the biggest markets for such BPO, resulting in continuing cost pressures and the need for “industrialised” F&A.
2. Anti-offshoring political, executive (think US and even Canada visa pressure on Indian BPOs) and business sentiment leading to action.
3. Reduction in onshore versus offshore cost arbitrage caused by point 1.
4. Availability and accelerated adoption of public cloud platforms in the BPO space.
5. Robotics: they really could change the game. See what UK provider Blue Prism is up to. Result: generic BPO processes will be almost completely automated within five years. Other generic processes, e.g. research and analytics, will follow. Then for the turn of domain-specific processing, e.g. insurance policy administration. Within the decade, all will be effectively automated. Where does that leave the offshore and nearshore BPO industries? Unless they adopt robotics (see what Infosys has just done) and go up-market, they’re finished.


DEBORAH KOPS

Founder & Managing Principal, SourcingChange.com
BPO as we know it is dead. Long live something else. What is that something else? Well, some folks accuse me of being witchy, but if I had a crystal ball, this is what I might see in it:
•    Technology first, then people. This is a departure from the standard hire-the-provider-then-hope-that-they-bring- new-apps approach that’s the norm today. Think about a world where providers integrate enabling technologies rather than trying to do everything with humans.
•    Move back onshore. Context trumps cost – or, more baldly said: if it’s cheap but not cheerful, what’s it worth? I think you’ll see companies place more value on understanding culture and business.
•    Gentle decline of offshore providers. In my ball, their heyday is over. Trust Darwin and the dodo.


JAMES MULLOCK

Partner & Head of Technology, Osborne Clarke
Two trends jump out at me. First is the noticeable increase in public-sector offshoring across Europe. If process and technological advances are going to continue to be taken advantage of by debt-saddled public bodies, the obvious question is how will suppliers structure their operations to help their customers deal with the political hot potato questions that attach to offshoring? I think we can expect to see more alliances and joint ventures between traditional onshore public sector suppliers and offshore brands.
The second trend has a regulatory theme. European lawmakers are about to make data management rules tougher and harder for customers and their suppliers to comply with. But there is one exception to that trend which could provide a welcome long-term relief. It seems highly likely that the routes to enable overseas data transfers will be considerably widened with the introduction of Processor Binding Corporate Rules. I think we’ll see a lot of outsourcing suppliers rolling out BCR projects and applications to make at least one aspect of data compliance easier for them and their customers. It’s unlikely to be an easy application process but the long-term practical and PR benefits will make it well worth considering.


KEVIN BOTTOMS

VP Business Development, TELUS International
Culture: it will become increasingly important for companies to build true partnerships with providers that can sustain their culture and brand regardless of location. Companies will use outsourcing to gain a cultural and competitive edge.
Cloud services: the adoption of cloud services will continue as the technology becomes more mainstream, mature and cost-effective. This includes call centres and BPOs moving their services to the cloud from CRM systems to entire telephony platforms.
Big data: expect to see the sophistication of metrics and the use of unstructured data to provide better business intelligence in real-time. A whole new set of tools to capitalise on this data will emerge.
IT gets more ‘customer-centric’: companies will focus more on experience metrics (such as customer satisfaction) over efficiency metrics (like average handle time).
Preferred channels: expect a rise in the number of customer questions via online chat, social media and mobile applications.


HOWARD SPODE

Managing Partner, BPOpronet
There is no doubt that the outsourcing market will continue to grow and evolve over the next five to ten years – I believe we will see further emergence of elements such as: outcome-based pricing, the development of the public sector market, more sophisticated analytics, truly global delivery models and a change in the role of advisors (lots of money for old rope at the moment). However, our experience is at the coal-face of shaping, implementing and operating outsourcing arrangements so I prefer to focus on one segment that we have been heavily involved in recently: HR outsourcing.
Here I believe there will be continued growth, particularly into new territories, but that more and more of the activity will be “transformational” as opposed to “lift and shift”. By “transformational” I mean that the transfer of service delivery responsibility to a third party (i.e. outsourcing) will more and more be accompanied by the introduction of new processes and technologies (usually standardised across business units and/or geographies) and true change in the “client-retained” activities (Business Partners (BP) and Centres of Expertise (CoE)). Recently, as part of outsourcing initiatives, we have helped introduce the processes of a Swiss company into its German subsidiary and we are now helping introduce newly-designed global processes into a company’s Italian, Dutch and Belgian operations, as the first step in a global strategy. Such an approach generates greater benefits than simple lift and shift (e.g. truly standardised ways of working and access to data) but throws up additional challenges – for example, systematically identifying and responding to the “gaps” between the new processes/technologies and the current ones and a much greater focus on achieving real change in the retained functions (so that the end result isn’t just “Personnel Managers” with new titles).


SIMON TENNANT
and VASSILIS SERAFEIMIDIS
Shared Services & Outsourcing, PA Consulting Group
The world is changing and no aspect more so than business process outsourcing. An increase in demand is expected for different, focussed, better, more innovative and higher-end services from the BPO provider community – this is driving inexorable change. Clients will be more selective and demanding about what services they receive from their providers with particular demand for industry-specific solutions, outsourced provision of higher-end value-add in addition to transactional work, more “big data” analytics support and specific demands from clients for providers based in locations close to their own captive bases in important customer markets.
Consequently, providers will:
•    Invest in developing high-end skill base.
•    Introduce more platform-based BPO solutions – where the service provider offers both the service as well as the software platform.
•    Continue their journey up the value chain and expand newer services such as legal process outsourcing and increasingly niche areas like actuarial services.
•    Increase “all-in” bundled deals, where multiple functions are bundled together.
•    Deploy social media tools to provide strategic analysis and feedback on customers, products, brands, etc.
•    Spread their geographic footprint to include their customers’ emerging markets.


DEREK PARLOUR

Commercial Director, National Rail Enquiries
The BPO industry is likely to be moved by two trends over the next few years. One is in the approach to outsourcing, with multi-sourcing becoming more prevalent, and the other is in technology where previously specialist services are now becoming commodity based. The latter is especially noticeable in the current trend to cloud hosting.
Both of these trends increase the flexibility for the client and give them greater ability to pick small suppliers to deliver parts of the service rather than going to one big BPO organisation to deliver a complete service.
Large BPO organisations will have to adapt to working with smaller specialised organisations and will have to become more specialised in certain areas as these two developments could lead to the decline of the large single-source operation.
Equally clients will need to adapt their approach to make sure they gain the maximum benefit from these developments. As always, having the right skill set will be key on both sides.


COREY BESWA

VP – Solution Design, Ubiquity Global Services
I’ve seen the BPO industry become relatively commoditised over the past decade, leading to less differentiation amongst the big box service providers. Looking towards the next decade, I think the winners will be providers that are able to provide authentic differentiation with a focus on the following elements:
•    Operational Excellence: While often cited as a core competency of nearly every provider, I’ve seen that this element is frequently lacking and ultimately fundamental to creating great customer experiences.
•    Business Alignment: I believe providers need to ensure their business goals are authentically aligned with their customers, moving to operate as extensions of their clients.
•    Technology Innovation: moving beyond adoption of “off the shelf” elements, I think it’s essential that customised solutions are developed for verticals and individual clients to facilitate better operations and ultimately an enhanced customer experience.
•    Industry Expertise: as organisational boundaries are blurred, I think true industry expertise is becoming essential to creating lasting partnerships.


BHARAT VAGADIA

Owner, Op2i Ltd, Governance Director
Some predictions are:
1. More focus on automation and less on pure outsourcing.
2. Many vendors have invested significant sums in developing software platforms aligned to their BPO service offering to offer those converged services and automation we all talk about, but not many are getting traction. We are likely to see much more innovation and movement in this area: some vendors will sell their software platforms to others; some vendors will offer the software for free; others will provide BPO for free and charge for the software.
3. The client community will start demanding “real” outcome-based contracts.
4. The inertia from the existing large players for commercial innovation will mean new competitors are likely to come into the market with more risk tolerance and offer the commercial innovation sought from the market.
5. China will buy a few heavyweight BPO names and start making real headway.
6. The rise of “agile” outsourcing contracts.


JILL STABLER

Senior Manager, Alsbridge
Is the cloud finally casting its shadow over BPO? It has after all been looming for quite some time now, but only a few SaaS offerings have impacted BPO to date – think NGA’s EuHReka. But true cloud appears to be securing its grip at last, as evidenced by newly emerging industry rumblings of multi-country HR BPO offerings focussed, for now at least, on former PeopleSoft founders’ product Workday.
But the million-dollar question still stands: can and will the FTSE “you have to have ERP if you’re in it” 100 ever make the switch? So many of these organisations often seem wedded to ERP by colossal investment sunk into bespoke implementations – will they make a u-turn?
If the pace at which Workday – generally accepted to be the forerunner, though not the only runner – is gaining credibility is an effective barometer, then arguably yes. A growing selection of high-profile organisations have selected it as their HR Information System (HRIS), eschewing usual suspects SAP and PeopleSoft in the process. And with Workday’s functional footprint expansion into finance underway, cloud BPO looks close to enjoying the rainy day it has been waiting for.


DANIEL SASAKI

Regional Managing Director, London, Lloyds Development Capital
BPO will be radically re-defined over the next five to ten years. Instead of its historic role as a cost-cutting tool, it will increasingly be viewed as a means of delivering higher-quality services and capabilities. At the heart of this transformation is technology. Offerings such as increasingly sophisticated cloud computing, business analytics, social media platforms and process automation software will help to deliver far more sophisticated products and services.
In parallel with this re-definition of purpose, will be a re-ordering of source. Higher-value onshore, as opposed to traditional low-cost offshore outsourcing, will gain ground. More developed country cities will follow the recent entry of Toronto into the Tholons Emerging Global Outsourcing Cities list, along with an increasing number of the emerging market mega-cities that adapt quickest to the new reality. The ability to master BPO’s transformation for maximum advantage will be among the characteristics that define the successful corporates of tomorrow.


TONY UCEDAVELEZ

Managing Partner, VerSprite, LLC
Tomorrow’s shared service centres will centralise their core abilities, however, will also disjoin others; namely that of information security. Recruitment today is active in terms of obtaining greater access for insiders to global MNCs. Tomorrow’s shared service model thereby places a lot of responsibility on the office manager or site manager in operationalising security for the parent organisation. As a result, the local office managers will serve as the key Subject Matter Expert (SME) in order to truly apply security to HR, finance, and accounting shared service models. This trend will begin as traditional security measures lose stride to the gaining grounds of organised hacker and crime groups that seek to infiltrate organisations at the ‘edge’ versus the core of traditional business models. It’s important to learn how these trends will take shape and how to best prepare for them.


JOANNA SWASH

Sales & Marketing Director, Moneypenny
For me it’s all about improving customer service and business efficiency while reducing cost, and freeing up space and management resource. How often is it the ‘A’ team making the sale and the ‘B’ team delivering the goods? The suppliers that will survive are those who live up to expectations, absolutely nail outstanding service and build strong and honest relationships of trust with their clients. In a crowded business environment it will be increasingly crucial to develop the point of differentiation for your business, helping you stand above the competition and shouting out to your prospects “here’s why this is for you”.  Going forward nothing else will do!


PAUL SINGER

Principal, Pace Harmon
I expect to see customers and providers move away from the “lift-and-shift” model of today to a transformative BPO model where best-process and SaaS technologies will virtualise work to the point that customers will not care where it is performed; they will only care about the relevant outcomes. And as BPO growth becomes reliant on SaaS technologies, the distinction between BPO and ITO will disappear, as IT infrastructure becomes part of the business process delivery engine, and not a separate activity to manage. BPO providers of the future will look like modern-day clothing manufacturers, constantly scouring the world for the best delivery location for a given function. And buyers will see better service at much lower costs.


MATTHIAS MIERISCH

Chairman and CEO, arvato UK & Ireland
Maturity in the outsourcing market is set to create some distinct new growth areas. At the top end of the market, business process outsourcing (BPO) will play a bigger role in clients’ strategic decision-making, as suppliers develop more sophisticated solutions and embrace innovations in business process management (BPM) technology. As a result, clients will invite suppliers to move up the value chain beyond delivering purely transactional services, entrusting them to handle more complex and judgement-based functions – like financial planning and risk management in F&A BPO for example.
In terms of new opportunities, we anticipate that the biggest growth areas will be found in the mid-market. Demand is already growing here, particularly for HR, IT and F&A BPO, as businesses look to become more competitive by bringing in expertise which has been proven to work for larger firms.
The challenge for suppliers will be gaining trust in a new market, adapting existing solutions and of course ensuring they are affordable.


MARCEL HORST

MD, ExcelSource
A key trend will be the emergence and growth of the BPO cloud. This in turn leads to greater technology advancement, different people skills and increased virtual organisations. So far advances in technology have enabled flexible cloud computing services. Combining this with the continued growth of Software-as-a-Service for most business applications, the logical outcome will be that a BPO cloud will start to emerge – initially as an altocumulus of disparate high-growth BPO providers that are able to use Agile organisational deployment techniques to respond very quickly to supply and demand changes. Later these will come together in a cumulonimbus BPO through increased openness of communication from big data standards and further Web 2.0 advancement. The outcome over this ten-year journey is that customers of the ‘Big BPO Cloud’ will be able to flex BPO services near instantaneously without the need of a two-year transition project.


THOMAS REUNER

Principal Analyst, Ovum
Ovum expects an increasing maturation that will see BPO move into the mainstream of sourcing strategies. From a provider view the focus will be on acquiring and leveraging IP as well as building out highly verticalised offerings. From a buying perspective new ways of bundling as well the emergence of the notion of a service catalogue will change engagement models.
Fundamentally we expect acceleration in process automation resulting from different angles such as robotics, semantic approaches to BPM as well as cloud services reaching a level of maturity. This is not to say that we are on a way to a process Nirvana. New technologies will provide new complexities. But also providers will break up complex processes and try to sell sub-processes most notably in the context of business-process-as-a-service (BPaaS). On the negative side we expect many tier-two providers not being able to transform beyond labour arbitrage leading to even more consolidation.


HOWARD FLINT

MD, Omni RMS
As BPO is by definition process- and admin-heavy, providers will look to find efficiencies when servicing these growing client bases and technology will once again provide most of the answers.
A decade from now, I envision all but the most niche of outsourcing tasks being online and entirely automated. There will be a trend away from ‘business-to-business’ relationships towards ‘person-to-person’ ones, as outsourcing companies look to juggle the impersonality of increased automation with the strengthening of client and user relationships.
This will lead to “automated personalisation”, where a combination of more sophisticated big data analysis, increased use of social media and enhanced cloud computing will allow BPOs to accurately and quickly meet, and even anticipate, individual habits.  BPO will reach a level where the interaction required by a provider is minimal, allowing for full integration and a blurring of the line between outsourced and in-house service.


JAMES WALLIS

Managing Director, Plus One Services
In the field of general insurance outsourcing there is an increasing trend to move to outsourced arrangements for policy sales and servicing for differing reasons.
There are two main growth areas: the larger corporates who are looking for speed to market for distribution opportunities without being hampered by internal system challenges and project workstacks; and smaller insurance businesses who don’t have the appropriate infrastructure, operational capability or scale to service their business efficiently which limits their ability to innovate.
BPO organisations that flourish will be those that are agile, flexible, and who are able to consistently add value to their clients’ proposition. With the increasing power of social media and the importance of maintaining and building the right reputation of the brand, the focus will move from outsourcing with the primary aim of reducing costs to doing so in a way which delivers efficiency whilst enhancing service delivery.


JEANETTE RAMSDEN

Owner, The Curve Group
BPO will continue to grow from strength to strength. Outsourcing your non-core activity will be seen as “it’s what all companies do” especially as no one finds it in the least bit strange that organisations outsource their catering and cleaning.
An area to watch is the public sector. The pressure to reduce costs and make redundancies and the large BPO organisations being reticence to work in this space, I feel there will be less activity.
The main word is “digital” and what that might offer. Organisations are starting to analyse social media much more to understand what their customers feel about their products and services. We see a lot of this work being outsourced – both the analytics around it which could be used to target and/or segment customer groups but also the actual 24/7 monitoring of what’s being written about a company.


MAREK SUJECKI

Senior Manager for IT Advisory Services, Ernst & Young
The outsourcing market is constantly evolving. Two particular areas that will command greater attention over the coming years, however,  include Analytics/KPO and also Governance/Outsourcing Integration.
Companies are gradually waking up to big data and the analytical value that they bring. whether it’s industry segment support, market positioning or ways that a company can adapt its business strategy through analytical leverage, outsourcing will act as a key enabler through research and analytics outsourcing. However, companies that invest in innovation to gain competitive advantage are unlikely to want service providers sharing these improvements with their competitors. Hence, IP will become more important and in/outsource hybrid models might persist.
Governance and Outsourcing Integration will also become more important. As multisourcing becomes the norm, the way outsourcing is governed and integrated will become more crucial to organisations in their efforts  to maximise its benefits. Multisourcing adds governance complexity, and there will be more attention paid in this area to “get it right” to truly leverage services end-to-end. This is especially true with organisations into second- or third-generation contracts.


R “RAY” WANG

Principal Analyst & CEO, Constellation Research
The future of BPO will go from data crunching, to information processing, to insight delivery, to finally automating decisions.  What has changed is the business model.  If you look at three axis: complexity of work, level of differentiation, and degree of control, BPO is moving up the stack.  Big data allows BPO outfits to move from complex algorithms to decision-making.  In level of differentiation, industry specialisation is allowing a shift from CoE to innovation centres.  The real question is how much degree of control will the client seek.  More and more, clients are buying outcomes which are the business models.
This will happen inside industrial plants to legal to healthcare.


KAMAKSHYA PRASAD PRUSTI

Business Improvement Specialist & Sourcing Advisor
The predicted shortfall of 18 million high-skilled workers in advance countries by 2020 is a message in a bottle for the manufacturing world. This industry hasn’t quite exploited the benefit of offshore outsourcing as far as peripheral functions of product development goes. On the top of that, systemic risks such as protectionist immigration laws etc. could complicate matters further. Thus, manufacturers will have to optimise their talent at hand, differentiate what is core to product development/what is non-core, which is a complex process/which is not; therefore zeroing in on activities that lend themselves to offshore delivery. As an example, nearly 30 per cent of efforts in automotive body engineering are low-complexity and thus offshorable while OEMs have not achieved that level of offshore penetration in their design efforts so far. As a revival of manufacturing results in a war for talent, efforts to ship off activities as EngBPO bundles will herald the next wave of BPO in manufacturing.


MIKE ATWOOD

Managing Partner, Atwood & Associates
BPO is the logical extension of work specialisation that was made possible by the internet. As such its future is bright for those firms that recognise this fundamental truth. In order to capitalise on this a firm needs to bring an offering to market that has a world-class process, output-based pricing, and the most effective use of technology with labour strategically located to minimise its cost, while also minimising any disruptions.
The biggest, most available market is the revenue lifecycle in US hospitals. Hospitals do a terrible job of getting paid for their services and the firm that can fix this will be golden. CSC, ACS (now Xerox), Capgemini have practices. Every other provider wants to have a practice. The first firm willing to take the risk and provide this as an all-inclusive service (technology, labour, everything) will be in for exponential growth.


RICKY MORTON

Director, 12 Pillars
One key trend in BPO and ITO is the move from complicated systems of delivery to complex. As we adopt more varied service delivery approaches – cloud managed service, in-house – with components provided by multiple partners using different technologies in different timezones and with diverse cultures, the old familiar control mechanisms become less effective, in some scenarios verging on obsolete.
As the people, process and technology boundaries between service provider organisations and with customers blur, we can no longer rely on the same level of predictable interaction our current complicated systems have delivered. Our new complex systems behave in very different ways, so require new management mechanisms and strategies. Emergent relationships, adaptive behaviours and less predictable outcomes demand strong leadership, intelligent clienting, flexible approaches and evolving responses to the service integration and management challenge.
These will include:
•    ensuring the client organisation retains strong leadership that provides direction and accepts accountability;
•    building capacity in the retained service integration and management function with experienced staff, mature processes, relevant control mechanisms and information discovery capability;
•    expanding the focus in contracts on partnering, cooperative behaviours, and cross-provider operational level agreements;
•    creating shared risk and reward mechanisms that stretch across multiple providers and incentivise appropriately.
•    With change and complexity the new norm, cooperation and collaboration  – among providers as well as between provider and customer – become critical to the delivery of a smooth customer experience. A great deal hinges on the right people making the right decisions based on the right information at the right time.


CHRIS NICCOLS

Outsourcing Guide
The sequester will drive government outsourcing, especially in smaller municipalities. Top projects: sanitation, police services, jails, and  educational services.
Weather change and annual super-storms will drive the need for outsourced disaster recovery for coastal cities, until the coastlines are rebuilt with storm-resistant technologies (10-20 years).
The adoption of “IBM-Watson”-style natural language learning systems will drive a new wave of automated call centres, information and support services. In five to ten years this capability will evolve into a new “decision support” industry.
Cybercrime has become cyber war. Internal corporate IT departments are designed to protect their premises and the firewalls that surround them. Defending corporations from cyber war means stepping outside of the corporation and chasing the bad guys around the world. IT and other corporate service have no mandate for this, and need a 21st-century outsourced security service to provide this defence.


JOE DOYLE

Marketing Director, Sitel UK
Economic uncertainty will continue to play a major influence on organisations and their use of BPO as a means of driving down costs. The interesting point for these organisations will be in finding the balance of meeting reduced budgetary expenditure while still hitting C-Sat, retention or sales goals. The best BPOs will therefore further increase their value-add to clients, improving the quality and agility of business processes and utilising technology to drive customer experience. For the most successful enterprises, outsourcing will not only be about offshoring to one low-cost location, but about blending onshore, home-based, offshore and nearshore capabilities, supported by a proven global operations model.
Outsourced call centres will sell more than ever before. Many businesses will transform core support processes to optimise them for creating revenue. Each positive contact resolution will be linked to a value-add offering for additional services, warranties, refills, peripherals and enhancements.


SIMON HILTON

Operations Director, IESA
We believe that the major trend to define the BPO space over the next five to ten years is the move to cloud-based system provision. Whilst some companies are already using the cloud, for many more the cloud is little understood and somewhat feared. With the widespread and accepted use of mobile technology, information needs to be accessible anywhere at any time and the cloud provides this; system interaction is now a seamless process rather than a planned event. Cloud-based systems are developing to provide better security than current on-premise systems and the increased use of ‘lightweight’ user platforms with live data and information dashboards can free a user’s time for core, rather than support, activity.


MIKE MORRISON

Senior Vice President – Commercial BPO, Xerox Services
The only accurate prediction about the future is that it’ll be unpredictable. Ten years ago there was no social media, smartphone or cloud computing to consider. Predicting BPO’s future will be the same but we’ll try…
BPO’s future will have services that are more common, consistent, scalable, and quicker to implement due to standardisation and cloud-computing. Analytics will drive every process and decision and improve their ability to predict future trends. The crowd will grow exponentially bigger with crowdsourcing. Buyers will increasingly outsource more internal, strategic and higher-value services. Contracts will shift from transaction-based to outcomes-based. Innovation will become the major differentiator in BPO provider selection. More mid-sized companies will begin to adopt BPO. Economic and PR factors will continue the growth of nearshore and onshore locations at the expense of offshore. Vertical and horizontal silos will further blend. And lastly, multichannel customer communication will be the norm, not a differentiator.


HANS VAN ECK-CASTEELS

On-Demand Procurement/Sourcing, Procurion
The procurement function must re-invent itself or it will not survive. Anything that’s not strategic is being put on the discussion block for outsourcing and offshoring. I even see companies segmenting strategic procurement and determine what needs to be retained and co-located with the lines of business, and what work can be centralised in lower-cost locations.
A possible outcome of the emerging procurement vision is that the functional ‘procurement’ label fades from the corporate dictionary – and outsourcing explodes. I hope that the process becomes more thoughtful in the coming decade.
I notice that procurement outsourcing providers are investing in more training for their procurement professionals than Fortune 500 companies – the very customers they want to land. I expect to see even more procurement outsourcing, including the outsourcing of roles that we consider strategic today. Will we ever get to the point where a procurement department staffed with 200 people in 2020 will be reduced to one person whose job it is to manage a procurement outsourcing provider? That’s a stretch for the next few years, but it is the general direction we’re headed. But, regardless of whether procurement is kept in-house or outsourced, the bar has been raised for the skills and training needed by procurement professionals. The procurement professionals in non-BPO companies today may be seeking work in BPOs in the future. And, if they fail to raise their skill levels, they may find themselves being unqualified to join a BPO!


RAMESHWAR SAHU

Manager – Business Development, IT Cube
The BPO space will experience more skill-based outsourcing with industry focus and experienced partners from similar industry, there will be more focus on Quality Assurance through third-party QA agency development. A higher percentage of BPO business is likely to move onto cloud-based technologies than in-house solutions. Finally BPO companies have to work towards developing new talents through training and development, otherwise we will soon experience a lack of leadership: most large companies have stopped investing in developing talent for cost=saving reasons and are now buying talent, but the question is for how long can you buy talent if there is nobody developing it?


ANDY SCOTT

European Sales Director, Chesapeake System Solutions
Process automation and near-sourcing will be the death-knell of labour arbitrage and doubt-sourcing. Increased visibility, control and cultural harmonisation will immunise against a plague that will wipe out the “me-too” population, sneezing their final “YESsssssssss” as they disappear into the abyss.
A new generation of educated smart-sourcers will offer solutions that add value to their corporate clients. Public sector organisations will outsource non-productive activities, and focus on service delivery. Financial Services will no longer survive the catastrophic mistakes of over-reward and relaxed regulation.
Value shall triumph over Cost; Team Spirit over SLA. Standards will mean something more than being the same. Pride, Passion and Personality will replace Perfectly Profitable Pawns.
Germany, China and Brazil will have the biggest knobs on the global control panel. The USA will accidentally shoot itself. Great Britain will become a playground for the rich and a dumping ground for the poor if it does not embrace outsourcing.


SRIDHAR DHULIPALA

Director-Solutions & Co-Founder, Bizosys Technologies
Big data technologies will be the single most significant factor to dictate the future of BPO. Call centres will have a greater opportunity to engage users even better, providing better quality of service, faster turnarounds, reduced number of calls, and so on. Customer analytics spanning structured internal data and unstructured data from social feeds, etc. especially when done in near-real-time, will improve customer satisfaction. Similarly, KPOs will demonstrate faster response times. Even top managements, data-driven company boards will rely on “independent BPO BSO services” for governance and strategy BPO services provided by management consultants.
Technology impact apart, a better customer experience via vastly improved, reliable data analytics-driven conversations is likely to lead to better trust and, at some level, assuage and alter privacy perceptions. Improved quality of service will likely outweigh privacy concerns. Driven by technology, BPO will be broader, more proactive, and less reactive.


JERRY DURANT

Chairman Emeritus, IIOM
I would like to think that certain things would last forever and over time transform themselves to fulfill the needs of business. Unfortunately I haven’t seen that much change in the BPO sector except to the extent of new services being provided. It remains stuck in the rut of buyers buying and providers supplying whether it be non-voice or voice-based services. Automation advancements are grossly under-used in favor of using low-cost labour.  The push for digitisation will further erode non-voice services. In turn voice-based BPO will diminish as improvements in quality and customer care give way to the massive need for inbound support. Likewise, outbound calling in pursuit of sales will give way to ever-increasing use of online and mobile procurement. The BPO industry has not embraced a need to change or look beyond. Such matters as process optimisation, service engineering and automated support solutions are some of the things that are simply not making their way to the strategic drawing-boards of BPO leaders.


To read individual responses to several more focussed questions, which appeared as box-outs in the magazine article, click on the following links:

How are buy-side attitudes driving the evolution of the BPO space?
John Willmott, NelsonHall

What will be the future game-changers for F&A outsourcing?
Stan Lepeak and Ron Walker, KPMG

How will the geographic distribution of sourcing delivery evolve over the next decade?
Charles Green and Hansa Lyengar, Forrester Research

Why is Total Cost of Process key to the future of BPO?
Cathy Tornbohm, Gartner

How will BPO providers’ business models evolve over the next decade?
Saurabh Gupta and Eric Simonson, Everest Group

What are the future risks in global BPO and how can they be tackled now?
John Keppel, ISG

How will process automation impact the future of BPO?
Duncan Chapman, Source


Want to share your own thoughts on what lies ahead? Please email the editor at jamie.liddell@outsourcemagazine.co.uk 

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