The rapid evolution of AI, the economy and the post COVID-19 workforce changes have led an outsourcing boom over the past several years. Though outsourcing is far from a new concept, the services and capacities of outsourcing providers and the industries they serve are evolving rapidly. Today, over 68% of large U.S. companies utilize outsourcing to scale their CX teams and maintain their bottom line. But are traditional BPOs the only outsourcing option? Let’s dive into some considerations before making that choice.
Business Process Outsourcing (BPO) is a widely-used outsourcing solution for growing businesses and enterprise-level companies looking to scale operations efficiently. Whether the need is for long-term, seasonal, or project-based teams, BPO provide flexibility that is often desired for scaling business quickly. However, traditional BPO services may not be the best fit for every business, and it’s important to explore other options. If your business is considering outsourcing services, here’s some guiding pros & cons to help make informed decisions and discover unique alternatives that could be the perfect solution for your specific needs.
How Do BPOs Function?
BPOs are third-party companies that take on outsourced functions — like CX (customer experience)— so companies, managers and teams can focus on other core functions. BPOs can be a useful model for both startups and enterprise-level companies: Small teams must prioritize internal resources and might not have the necessary workforce to perform all operations; enterprise companies may have bigger fish to fry and benefit from more efficiently outsourcing front or back-office work. Most companies choose to outsource CX when the benefits and partnership of a third-party provider outweigh existing internal resourcces or strategies.
Outsourcing Pros and Cons
As you consider outsourcing essential CX functions, it’s helpful to know the pros and cons!
Outsourcing Pro #1: Speed to Proficiency
Outsourcing CX can free up internal resources, allowing valuable employees to redirect time spent on certain business functions — such as customer success teams or customer support teams — to more variable tasks or projects. Outsourcing also provides access to a broader talent pool of experienced professionals, helping you innovate and stay competitive without accruing the additional costs of hiring internal employees.
Outsourcing Pro #2: Access to Untapped Talent
A perk of outsourcing is often access to talent groups that an organization has not previously had access to or the ability to connect with at scale. For example, companies that bring military spouses on board recognize their unique skill sets and the positive impact they can have within the organization. Those that are unaware of this candidate pool, or continue to overlook it, could potentially be losing out on an opportunity to bring a distinctive demographic of educated, innovative, and motivated professionals onto their teams. Finding an outsourcing partner who specializes in impact driven CX solutions can open up instant access to remarkable talent.
Outsourcing Pro #3: More Flexibility
Sourcing and vetting candidates, especially customer experience agents and teams at scale, can be incredibly time-consuming, especially for teams that only require additional support in a seasonal or otherwise temporary capacity. By eliminating the need to recruit and hire directly for certain teams, companies can scale quickly and effectively. CX talent solutions like Instant Teams, often categorized as a boutique BPO, offer advantages like teams with local and global market knowledge, cultural affluence, alignment to federal compliance structures, unique lived experiences that naturally create empathy in customer interactions, and more.
Outsourcing Con #1: Remote Culture Challenges
Culture continues to one of the biggest buzzwords in the remote work boom forced by COVID – “how do we maintain our company culture when our team members aren’t in the building?” Companies cite communication, tracking remote work productivity and lack of team cohesion as key challenges in managing a remote workforce. These challenges can be exacerbated when entire CX teams are outsourced and employed by a BPO without your brand at the helm of the solution. The right outsourcing partner with the right processes and teams can easily become your company’s strongest ambassadors.
Outsourcing Con #2: Unexpected Costs
Large BPOs can have complex contracts with extensive fine print. Those who choose to partner with offshore BPO services often fail to conduct thorough due diligence, experience poor management, high turnover and service charges or hikes can kill the intended cost savings. On top of tangible costs, loss of quality control and customer dissatisfaction with your chosen BPO can lead to loss of brand affinity and growth opportunities. The right outsourced solution partner makes all the difference!
Outsourcing Con #3: Security & Compliance Concerns
Trusting a third party with proprietary information poses an obvious risk: your chances of experiencing breaches or data theft are much higher if your chosen BPO does not have strict security protocols or extensive experience with protected data. And when outsourcing to a BPO that employs offshore workers, security can be a nonstarter — especially for companies in the cyber, fintech, insurtech or medtech spaces. Working with onshore outsourcing solutions with US based, CX talent can make all the difference when needing to scale quickly but limited to partners who can meet US federal compliance needs! Check out how this military spouse CX team serves a cybersecurity firm with 24/7 support.
Outsourcing Con #4: Lack of Dedicated Support
With many traditional BPOs, CX agents might be working on several accounts, increasing the chance that they might lack cohesion or be less than committed to your organization’s success. This can also result in challenges communicating with the BPO – an issue that can be even worse for small and mid-sized enterprises, as their BPO might naturally spend more time with higher-paying enterprise accounts. This type of account sharing can also exacerbate the remote culture issue mentioned above. Be sure to inquire on the scope of work a BPO’s agents are committed to in the day to day.
If outsourcing CX would be helpful to your company, it’s important to partner with the right provider. Any outsourcing takes significant front-end work, including training and communication as the work shifts from in-house to the new outsourced partner. If you aren’t confident that a large, traditional BPO is an ideal fit for your company, boutique BPOs, or even a targeted CX job board can offer specialized, third-party help with slightly different approaches.
The Instant Teams Approach to Outsource Solutions
We could sit and talk about outsourcing all day long! It’s what we do best and it’s what we do here at Instant Teams all day long. Our Customer Experience Marketplace empowers your organization to stay ahead and build social impact in your day to day.
- Culture and engagement are embedded into the outsourced team
- Remote team members are all either located in the U.S. or authorized to work in the U.S. (some companies even use a talent pool of military spouses, veterans, caregivers, and survivors to reduce the risk of offshoring). The global location of military connected workers can provide coverage while mitigating security concerns.
- Team members are only on one account at a time for fully dedicated support!
- 2024’s average attrition rate is below 7%.
Before choosing an outsourcing provider, make sure to weigh the pros and cons to land the right outsourcing partnership. It could make all the difference for business results, social impact, and brand affinity! To learn more about Instant Teams and the CX outsourcing solutions available, contact us here.
