01
Avoid outsourcing misconceptions
Governments will never be able to fully benefit from a BPO partnership until they update their existing views of the sector and its current capabilities.
01
Avoid outsourcing misconceptions
Governments will never be able to fully benefit from a BPO partnership until they update their existing views of the sector and its current capabilities.
(Time to read: 1.5 mins)
Over recent decades the BPO industry has evolved beyond the provision of human resources. Its leading organizations now deliver data-and-insights-driven end-to-end services. Alongside replicating, automating or optimizing the cost of performing an existing in-house task, BPOs are now equally adept at consulting, business transformation, AI and advanced reporting.
Unfortunately, public sector perceptions of the industry have not kept pace. BPOs are still often equated with back-office functions or the provision of contact center services, and this limited view could hinder governments’ ability to truly benefit from the proven products or services currently available, or to create integrated, effective solutions to complex or persistent problems.
Governments need to have a clear understanding of this depth and breadth of capabilities. Without clarity regarding what is possible and what could be achieved through partnering with a BPO, the public sector will never be able to clearly assess which current (or future) operations, functions or services are suitable for outsourcing or against which criteria to judge the merits of potential BPO partners.
Checklist
Educate yourself and your team on the current evolution of the BPO industry.
Conduct a comprehensive evaluation of current operations to identify which can be effectively outsourced.
Initiate conversations with BPO partners to explore their offerings and capabilities.
(Time to read: 1.5 mins)
In or out: When is outsourcing the right solution?
Before government can unlock the benefits of outsourcing or know how to select the right outsourcing partner with confidence, agencies and departments need to know how to assess if an existing service, operation or one of its components is a suitable candidate for outsourcing.
1. Need assessment
The closer a project or service is to a core function, the greater the risk of potential issues arising from outsourcing. However, if an operation could be better performed with skills, expertise, or tools currently lacking, maintaining the status quo may pose greater risks. Likewise, if the service experiences major fluctuations in demand (and therefore workforce needs), outsourcing is typically the most effective way of managing those peaks and troughs and generating the data and analytics necessary to be able to proactively forecast future demand and deploy resources accordingly.
2. Understanding complexity
The simpler the service and easier it is to replicate, the better it is as a candidate for outsourcing. But what about the wider function in which the service operates? Does the function add complexity or demand a specialized knowledge or understanding of regulation or policy, or require certification or qualification?
This type of complexity is easy to overlook when performing an outsourcing suitability assessment. Often overlooked, too, is the fact that what typically makes a complex or high-value service or process unsuitable for handing over to a third party is the depth and breadth of potential bidders for the contract.
3. In-house capabilities
Outsourcing success is as much about managing the relationship with the provider as it is about the outsourcer delivering against government needs. Does the agency or department have the right resources in terms of staff, time and technology to work with a BPO provider? Likewise, is there sufficient knowledge and experience within the department to ensure clear, proactive oversight of any outsourced service?
4. Risks verses rewards
Outsourcing can yield rewards such as improved efficiency, flexibility, and access to innovation, but it also carries risks. While some risks can be mitigated through effective management, others — like data security and public scrutiny — must be carefully considered, especially if the service has never been outsourced or involves new capabilities.
5. Long-term impacts
Even if the decision to outsource is driven by the need for future efficiencies rather than immediate cost savings, what are the long-term goals of any engagement? Will it require the upskilling or cross-skilling of team members or the wider agency? Are there measures in place to bring the operation back in-house at the end of the contract or build on the initial success with further projects that involve the private corporate sector?
Success is as much about managing the relationship with the provider as it is about the outsourcer delivering against government needs.
Best practice guide From misconceptions to mastery
