Points of View
More Business Process Outsourcing (BPO) Research
Front-office service providers must leverage smart investments to weather the COVID-19 storm
When we wrote about the legacy contact center’s demise, it was with an optimistic view that in the long term, smart companies work with their partners strategically and develop smart CX strategies, rid themselves of broken processes, and optimize digital usage. In the shorter-term scramble, most companies are throwing people at the problem (from home) to try to keep their heads above water to handle customer inquiries. But when the dust settles, companies will enter cost-cutting mode and re-evaluate both their services spending and their engagement models, creating challenges for providers. Our first round of COVID-19 business impact survey data suggests that spending on front-office services will be hardest hit, and that service providers and clients expectations are not aligned (Exhibit 1).
Exhibit 1: Enterprises and service provider expectations are not aligned
Source: HFS Research, Business Impact of COVID 19, 2020
Front-office BPM services will be hit hardest
Our survey data suggests that service providers are overly optimistic about the demand for business and industry growth. The pandemic will hit the whole services industry, particularly smaller providers and businesses that are not in good financial position. But, there is a silver lining here for well-prepared service providers; they are already picking up business from clients who couldn’t send their internal staff to work from home and from competitors that were caught unprepared. Other parts of the front office are seeing localized spikes in demand, such as marketing services for cash-rich brands that want to get ahead of messaging their audience. While we’ll likely see the overall industry shrink, the strength of the providers that have previous investments in work-at-home (WAH) solutions and digital tools and platforms, as well as those that have achieved solid financial positioning, will be poised for growth.
Service providers have stepped up to the plate to stabilize their customers’ business
Over the last few weeks, savvy contact center services providers have done some pretty amazing things transitioning their people to working from home and setting up digital services offerings. From a scale perspective, Teleperformance, with its already robust global WAH offering pre-pandemic, had the most impressive shift of staff to work from home, with over 120,000 employees making the shift in 52 countries and still moving many more. SYKES has leveraged its best practices and expertise from its acquisition of pure-play WAH shop Alpine Access and Talent Sprout, a training, development, and tech platform built for WFH. Sitel’s similar investment in Learning Tribes for talent and training, Concentrix’s investment in SOLV and messaging platforms, and itelBPO’s acquisition of US-based WAH pure-play Granada also place these firms at an advantage. HGS was quick to come out with a COVID kit for customers looking to pivot live calls and chats to digital channels through features like HGS’ DigiBOTS and IVR callback features. And TELUS International is unveiling a quick-deploy WAH platform for clients that have been caught off guard and don’t have the tech expertise to make the changes on their own.
Working from home is not the same as “work at home”
Service providers that made previous investments in a “work at home” (WAH) model are far more prepared to survive and thrive now. But the design of a WAH model is much different from that of a brick-and-mortar contact center; each model typically recruits a different talent profile and skillset and implements different management and training styles. This tremendous shift in sending “regular” contact center employees to suddenly work “from” home does not mean an optimized WAH model. Right now, it’s just about stabilizing the business and getting work done. Some service providers are already scaling up their WAH recruiting and hiring to manage volume fluctuation and augment the work they’ve shifted home. Service providers across the board report record-low attrition rates as folks embrace stability and employment as we brace for a recession. In the long run, as things return to “normal,” keeping those folks who are new to working from home happy and productive will be a challenge.
The Bottom Line: Longevity for front-office BPM service providers requires a lot of advanced investment.
Providers that have not made these important investments in work-from-home and digital expertise are those that will be most impacted by cost-cutting measures and investment decreases in the coming months. Work-from-home delivery is quickly becoming a viable option by those that were dead-set against it. While now, the focus is on work from home, we’ll soon see a spike in digital associates being deployed to deal with wild call fluctuations in the future. Both of these elements will feature as must-have pieces of business continuity plans moving forward. Even as companies start to move some staff back into physical buildings, having had this experience of leveraging WAH and digital solutions as part of the response will make the industry more capable of responding in the future, whether to more waves of COVID-19 or other disruptions to business as usual.