Innovator or Giant: Why Bigger Isn't Better in the BPO World
Customer service giants merge more and more, which impacts the BPO industry, and we think this also has implications for the customer experience. Are larger companies able to deliver high quality, personalised service?
A recent CX Files podcast episode explored consolidation activity in the Business Process Outsourcing (BPO) industry. Some of the most recent announcements have been the new name for the merged Sitel and SYKES - now to be called Foundever. In addition, Concentrix and Webhelp joined in March this year, and most recently, Teleperformance acquired Majorel in April.
What does the market think of all this activity?
Teleperformance shares crashed when the announcement was made, down 13.8% that day. Teleperformance has around 420,000 employees, but this will soar to over half a million if the purchase is approved. Many employees were posting about this ‘achievement’ on LinkedIn. Confidence in Teleperformance was also affected by a statement, the day before the Majorel announcement, that they expect to see 20-30% of their call volumes handled by artificial intelligence (AI) in the near future.
What’s going on out there?
In the past few years, all these companies have argued that they are more than BPOs. They have all said they are digital business hubs. For example, look at all the robotic process automation (RPA) acquisitions and other specialised business service companies around 2018-19. They all argued that they could offer digital business services, and yet what are they doing now?
Listen to the analysts on the aforementioned podcast, and there isn’t a single one that thinks this industry activity is about enhancing strategy or offering services in a new location. Instead, it’s all about more chargeable agents in contact centres. Getting bigger and grabbing a bigger slice of the BPO pie. These big BPO brands are focused on their share price and impressing investors. Bigger is only better for them because it removes competition from the market and focuses all that revenue on a smaller number of players.
The investors may love it, but the clients?
These companies have very different cultures. They might all be offering similar types of service, but I’m sure that on the inside, the American Concentrix isn’t at all like the French Webhelp. So how will clients accept that the service company they chose is now about to change completely? Imagine if Majorel was handling your customer service processes. Maybe you had a reasonably significant contract with a couple of thousand agents - that would be a substantial chunk of business for Majorel. Now it’s swallowed up into those half a million Teleperformance agents. Once, you could get the CEO on WhatsApp because you were an important client. Now you are chasing a junior account manager because you are client number 434 on the list of importance. How does that feel?
Also, these big service companies need to apply frameworks and guidelines globally. So your non-standard RPA solution will need to be integrated into how this giant BPO manages automation. No dissent is allowed because global means global. Some giant companies with a global focus might benefit from having an enormous customer service partner with a worldwide footprint, but how many companies really fit into this group? A few huge telcos or banks, but there are not many.
Bigger isn't always better
Suppose you want to design a customer experience that is personalised, unique, and flexible so that you can change quickly with your customers. In that case, I don’t see what these enormous bureaucratic organisations have to offer. They are all still operating vast contract centres worldwide and discussing work from home as a flexible option rather than table stakes. Smaller or mid-sized companies reading about these customer service mergers and thinking about who they should trust with their own customer service processes need to think long and carefully. The world has moved on. . A former SYKES executive recently said that it may well be more tech-focused companies that now lead customer service innovation - not the BPOs.
He was right. Where were Mastercard and Visa when Apple Pay was launched? Does anyone really think that giant BPOs are the future of customer service in the 2020s? Innovation and improvement mean exploring something new, not just growing bigger. There is an alternative, and yoummday is already building it. Follow the link to see how we approach customer service from a new direction, embracing technology solutions and CX professionals that love supporting the brands they work with because they also have flexibility over their working location and hours.
The future for BPO isn’t bigger BPO. Jeff Bezos always says: “My customers are amazingly loyal until someone else offers them a better deal.” I think this is what we are about to see in BPO. The clients of these companies will remain loyal until they see that there is a different way to deliver a fantastic customer experience, and it doesn’t require half a million contact centre agents.
If you want to learn more about embracing yoummday’s platform-based approach to CX, please visit our website or contact me directly.