Artisanal vs. Industrial BPOs - Size Matters
Before we dive in, it’s worth touching on scale as it relates to your outsourcing vendor. The question of scale matters significantly in the business process outsourcing game.
The best of the small back-office providers deliver a more personalized outsourcing experience, in contrast to larger providers. The manager stamps her personality on your program launch and operations. The launch team makes decisions customized to client specifics. Large BPOs are more industrial.
Both approaches have their merits.
We think of the former as artisanal outsourcing. This meshes well with businesses and entrepreneurs who offer the same sense of craft to their products or services. At Lambent, we strive to deliver in the following way:
- personal connection between the client and the team
- deliberate process decisions at every juncture
- holistic approach to people and process and technology
Programs Win or Lose on Launch
To us, it’s a tenet of BPO dogma that a poorly deployed program will suffer from poor performance until you put the thing out of its misery. As with so many enterprises, the remedy for poor deployment is simple in essence and hard in execution.
Below we’ve mapped out the steps for deployment. This is a round-up of our ideal launch, complete with a downloadable BPO Program Launch Checklist and relevant account documents.
Step 1 - BPO Vendor/Client Selection Interview
The first step to the whole process is how you select your outsourcing partner or your outsourcing client. As much as prospective clients interview us, we interview them. It’s an advertising agency maxim that the key to award-winning work is a great client. I can vouch for that statement.
The rules here vary somewhat based on the scope of work and scale. But, generally, the things to consider when shopping for an outsourcing vendor (or an outsourcing client) fall into the following categories:
This consideration is somewhat related to scale. Larger vendors charge enterprise rates, whereas boutique shops like Lambent charge lower fees. Accordingly, smaller shops will tend to be more flexible on contract structure, although parties negotiate BPO contracts individually and no two are alike.
The interview works in both directions. Do you like the vendor? Do they like you? Do your business and work philosophies mesh? Short of the budget considerations, this is likely the most essential aspect of the deliberation process.
How many people do you need? Is your work denominated by hours, full-time employees, or a performance model like piece rate or transaction fees?
These considerations impact your vendor choices dramatically. In most cases, BPOs that tackle large projects don’t accept small programs and vice versa.
Experience applies to you and your potential back-office vendor. If you have outsourced before, you probably have documented processes, road-tested performance and quality metrics, and a good sense of managing the program. However, if this is your first time outsourcing work, all of these items need to be developed from scratch.
Domain expertise or process expertise can help move your launch along, assuming they can use preexisting templates, learning, and processes. But, most importantly, you are looking for a vendor who can guide the process of deployment and operations smartly.
Sometimes domain expertise boils down to experience with your type of business: start-ups usually need to rebuild processes so they can scale, solopreneurs need tactics and strategies that help them manage their teams easily to address other tasks.
What are you doing? Does your program blend several skills or require extensive training and calibration to launch? Conversely, will your team be performing well-defined activities day-in-day-out?
A Word on Timing Your Program Launch
From time to time, prospects approach us who have to deploy “yesterday”. We’ve chased these glittering, hasty rapid deployments in the past. Never again.
Now, with more wisdom, I can say that rushed program launches are likely to be messy. The corollary? Rebooting a program is hugely challenging and seldom works.
So depending on your scope of work, don’t rush your deployment. If it takes a week or a month, be ready to invest your time and your vendor’s time in a quality effort.
Anyone who under specifies a deployment is doing everyone involved a disservice. The pitfalls for a rushed launch include poor performance, which hurts staff morale while it hurts your brand.
Step 2 - Negotiation
Once each of you is satisfied that there is an essential fit, it’s a matter of dealing with the program details insofar as they impact pricing, so everyone understands the terms of your arrangement.
Clarity is a critical part of our engagement process because we do not rely on contracts to secure our business relationships but transparency and quality performance.
We rely on our Service Agreement and Statement of Work to structure the discussion of commercial terms for the work we agree to perform.
Outsourcing Service Agreement
One thing we do right after the Interview is sending a Service Agreement. It clarifies areas that can get confusing down the road, like overtime and holiday work and some unique things about our culture like a 32-hour/4-day work week.
The Agreement isn’t binding, but it dispels the notion that we are a sweatshop for knowledge workers. It explains our pricing model, wherein we charge more for employees with tenure as they reach anniversaries on a specific program.
Basically, our service agreement distills and simplifies the nasty contract legalese into a simple two-page document.
Statement of Work
Our statement of work (SoW) handles the assignment description. This helps us determine the complexity of the program and the skill level we need to staff. We build our fees around staff costs: the more complex and specialized the work, the more costly the person we need to hire for the program.
Here we capture any additional expenses like telco fees or applications we need to purchase beyond our standard complement of tools.
In theory, our SoW covers a year of work and automatically renews for the following year. In practice, a client can opt out at any time. This rarely happens, but we ask for notice a month before the client’s departure to make plans for the employees who need to be reassigned.
Start Dates vs Launch Dates
We specify two significant dates in the SoW: start date and launch date.
The start date is when we commit resources to the project. Usually, the “start” work entails researching the process and learning the nitty-gritty so we can staff adequately and build quality learning materials. This period also covers hiring and training. Likewise, we handle any hardware or application configuration work.
A program’s launch date is just that: the day we start taking calls, making calls, updating websites, making social posts, handling traveler bookings, and so on.
The variance can be pretty significant, which means we usually work on a project well before we begin invoicing.
The Terms of Payment
The terms of payment are almost as important as the rate itself. Again, this is because we deal with significant program work before launch during the program start period.
Our default billing model is to start billing from launch net fourteen. However, as every BPO deal is different, we range depending on several factors. The project’s scale, the project’s attractiveness, the client’s financial stability, and our cultural alignment all figure into our flexibility on payment terms.