Sunday, May 28, 2017

The BPO Saga

Accounting and debt collection services are classic examples of businesses answering the need for externalizing certain business processes. The first call centers have occurred in the 1960s, when phone systems became generally available consumer goods, and the first digital marketing services have occured in the 1990s, after the Internet.

Nowadays the BPO family includes members from multiple location contact centers to boutique accounting firms. Although different in geographic presence and organigrams, all of then are sharing a common set of particularities:
  • operating in a highly competitive market environment demanding always better quality and lower prices
  • permanently looking for new opportunities, because both customers and employees are moving targets
  • skilled and experienced decision makers, because the industry is not attractive for investors and there are no funds for errors
Nowadays even a student can organize a small team for offering digital marketing services, or a home based phone answering service. He/she won't have contracts with banks or supermarket chains, but by investing much time and some money in his/her startup he/she can gain the necessary experience for being hired by a BPO company operating on the middle or high end market.

Once a tech guy enters a professional BPO company, he/she will experience the "love me or leave me" trait of this industry. While these companies must follow the newest trends in technology and economy, and they encourage their tech personnel in studying, getting certified, growing personally and professionally, high salaries and stable incomes are not typical in the domain.

BPO workers are mostly underpaid, and sometimes even overworked. This happens because of the complex business model based on numerous smaller and bigger projects handled in parallel by a number of persons working in turns. Micromanaging such processes is a nonsense - most workers have to do multitasking (handling at least 2 projects in the same time). A fixed full-time or part-time salary supplemented with bonuses is widely accepted for this kind of work.
Let's face it, staying 8 hours on the phone is not a dream job, and tackling Office documents for ever-changing customers is not something you are happy to do all your life. The BPO workers are looking for other jobs, and the tech guys might leave the boat for pecuniary reasons.

On the other hand most customers of BPO companies are entities running 1-2 year projects, or startups with limited funds. In time the projects are ending, and the startups are or failing, or growing and considering more appropriate solutions for their new needs.

For BPO managers hunting new customers and new personnel has to be a permanent activity. For them the breach between contractual incomes and salary expenses does mean first of all an investment fund in technology and education for keeping the boat floating.

The funny boys of the BPO family are Upwork and Freelancer. Both are defining themselves as meeting places for employers and professionals, but they are used mainly for BPO purposes and for experimental projects.

While Upwork has been struggling for two years to break into a hypotetical middle market, Freelancer is adapting itself to a global market using the breach between the prices and salaries of different countries. In my opinion who is consuming the benefits of this breach for anything else than the latest technologies and education, will probably fail in the BPO business.

Contact centers already have a tradition in moving from one country to another, virtual admin and digital marketing teams are following their paths as the Internet bandwidth becomes larger.

I'm envisioning BPO as a saga because for surviving they have to fight continuously with the project management triangle's constraints and doing their best quality work.

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