Global BPO market consolidation
What impact is it having?
In late March Concentrix made the surprising (but far from shocking) announcement that it was purchasing Webhelp, creating a $10bn revenue BPO giant. Currently the global BPO market is in a constant state of flux with mergers, acquisitions and the occasional business failure. In recent years multi-billion pound BPO M&A deals have included:
Where does this leave customers and other operators?
Firstly, if you work for one of the big, global BPO firms you’ll know that there tends to be a lengthy gap between a deal being announced and it ‘closing’. Unless you're one of the very senior management team who already knows whether you’ll be either spending more time in your garden or racking up your air miles, then you're likely to have to wait and see what your role will be in the new structure. If you're a client of one of the big BPOs, though, you are less likely to be comfortable waiting to see what happens. In the same way you won't experience any significant changes in the short term, though it pays to prepare for what might come your way.
Most of the acquiring firms are experienced and have gone through similar transactions before. It is a truism that corporate acquisitions and mergers tend to destroy value and culture as often as they create and reinforce it, but BPO players are very conscious of the dangers of a mishandled acquisition. They operate in a relatively low margin business, commercially reliant on the retention of stable business in which relationships are still very often key. So, the BPO players recognise the importance of continuity when appropriate and the maintenance of clients’ ‘share of voice’ and sense of recognition through and beyond merger processes.
Potential areas of change
Senior management is likely to change and as mentioned changes at the supplier C-Suite will probably be the first to take place. Middle and supervisory management changes are unlikely in the short-term, but will inevitably happen – either as a result of a conscious process of selection or through people choosing to move on voluntarily in the face of expected disruption and change.
Even in an increasingly hybrid world, contact centre locations costs and strategy remain key concerns for BPO providers. Most businesses are still grappling with the challenges of how to configure and manage their property resources for the post-Covid workforce, so a major BPO going through a business merger will have infrastructure consolidation and ‘right-sizing’ as a key priority.
Operational techniques and processes
There are no real ‘silver bullets’ in the world of outsourced customer experience delivery (though if there are and you have one, I’d continue to keep quiet about it!). Most approaches, techniques and operational models are established and largely shared between BPO providers. However, there are variations and if a particular process or workaround delivers value to you and your customers you may need to ‘defend’ it in the face of operational standardisation pressures.
Over the medium-term technology solutions are also likely to be standardised with support and maintenance for some tools ceasing as a prelude to their removal or migration to a preferred alternative. There are obvious potential benefits to clients from this process, but the business needs of a single client may be lost amongst competing needs.
The financial logic for acquisitions is most often based on economies of scale and the reduction of shared resources. However, some may also seek to re-base pricing to a higher level or remove some of the legacy commercial idiosyncrasies that can develop over time as suppliers’ services develop. In addition, if you are a client of an acquired firm you may have benefited from a growth-over-profit strategy if had pursued one prior to sale.
What should you do next?
If you are a client of a newly merged or acquired BPO supplier here are some actions you should get started straight away:
If you'd like further guidance on this subject, get in touch.
Location watch: Morocco
A not so bazaar choice when looking for a new nearshore alternative
Markets, mountains and sensational spices; those are but a few things that come to mind when we think about Morocco. From the souks of Marrakech to the splendour of the Atlas Mountains, Morocco is certainly a popular tourist destination – just ask the 10.9 million tourists that visited Morocco last year!
However, as I’ve learned over the past 12 months, Morocco has become a fantastic outsourcing alternative to the UK, European and also for US businesses that are looking to reduce inhouse costs, whilst maintaining the highest level of standards/service.
Since 1993, Morocco has followed a policy of privatisation of certain economic sectors, which where previously in the hands of the Moroccan government. This has allowed more foreign investment into Morocco, which has subsequently seen a boom in the outsourcing sector. As a result, Morocco now boasts some impressive statistics, which include:
So why should you look at Morocco as your next outsourcing destination? Well:
Furthermore, to show its willingness to develop the outsourcing industry in Morocco, the Moroccan Minister of Industry and Trade (Ryad Mezzour) and the Minister of Digital Transition and Administrative Reform (Ghita Mezzour) recently signed off on a $5 million package to support investment projects in the outsourcing sector.
Interested in hearing more about Morocco? Get in touch, we’d love to chat with you.
"Morocco is a country of 37,832,888 million people located on the north-west coast of Africa."
ChatGPT and the
contact centre journey
It might not be a surprise to learn that my last article about ChatGPT was actually written by the popular large language model (LLM) tool about itself. I wanted to, without bias, illustrate its ability to produce (seemingly) factual based content and highlight its limitations by contrasting it against our other thought provoking, insightful and opinion-based articles written by industry experts. I thought I’d further illustrate this by sharing my thoughts on the contact centre journey we are all on and picking up on the learning points from some recent deployments.
Since the beginning of the year, I’ve been engaged in three specific projects, all with a common thread. To increase efficiency and reduce headcount. All three are well established, mature contact centre operations with super capable management teams. All three are seeking to refresh the customer engagement component of their technology stack and replace their IVR led customer engagement and contact centre operational applications. Instead they are identifying omnichannel customer engagement platforms with a ‘digital assistant’ sitting at the front end, from which to drive self-service transformation of the ‘easier’ use cases.
The other key thing that each project has in common is the transition from a ‘voice dominant’ customer engagement environment, to a ‘digital dominant’ environment. Across these three examples, we will see voice reducing from around 60%-70% of contacts, down to 30%-40% over a 36-60 month contract term. Judging from the client coffee table conversations I’m having this is not an uncommon aspiration. The scenario reminded me of the classic children’s story “The Wizard of Oz" - where Dorothy is swept out of her comfort zone, finding herself in a new magical world in which promises can be delivered……sounds familiar?
The scarecrow without a brain, the tin man without a heart and the cowardly lion. All now actors in our contact journey, down the yellow brick road and the promise of fulfilment of our deepest desires.
Yet at its core, "The Wizard of Oz" is a story about self-discovery and the importance of inner strength and courage. Each of the characters that Dorothy meets on her journey is searching for something that they believe will make them whole, but they eventually come to realise that they already possess the qualities they were seeking all along. Dorothy representing our need to feel safe and loved, the scarecrow symbolising our desire for intellectual capability, the pursuit of knowledge and value of critical thinking. The tin man represents the emotional and compassionate aspects of humanity, his journey symbolising the importance of empathy and the emotional connections that make life meaningful. Whilst the lion represents the physical and moral courage that we must all cultivate to overcome our fears and achieve our goals. All equally represented in our own yellow brick road.
So, what of the Wizard. The giver, the transformer and deliverer of our desires. On our own yellow brick road, we too see the wizardry that is technology. The technology sold to us as a powerful and magical thing. Well, to quote the Wizard himself speaking to the scarecrow "I think I'll miss you most of all." A quote that ChatGPT tells me “shows that even though the Wizard may not have had real magical powers, he was still able to give hope and support.”
So don’t let your Wicked Witch from the west disrupt and hinder your journey. Have faith, don’t fret and let us share our journeys along our own yellow brick road.
The key to win, retain and grow customers
The Contact Centre Panel team like to challenge ourselves and each other in our thinking, to ensure that we are doing the right thing for our clients and partners. We each have our favourite reference points, experiences, “North Stars”.
One reference point that John Greenwood often brings me back to, is the age-old wisdom of Robert Lieberman and “The Telephone Book”. I’ve not read it, at some point I will, but John will take me back to the key question of “what are contact centres about?....they are about winning and retaining customers” and that is something that is indisputable. (I’m probably paraphrasing John and Robert there, but this is what has stuck with me).
Some may be more focused on winning, others retaining, but all play a key part in both. I’ve added grow because really if you aren’t growing and everyone else is, then effectively you are in retreat.
So, if that is the objective then what is your preferred method? Where are your prospects and customers hanging out, where is the best place to find them, how do you best contact and engage with them? The truth is that if you are only using a single channel of communication and type of message, then you are probably missing most of them entirely or you are simply leaving a lot to chance.
We have such an abundance of communication channels available to us, all of which are competing for the attention of your buyers. No single communication is going to bring that win. Instead a multi-channel approach aligned to the habits of your target market is needed. Advertising only takes you so far, direct mailing of the postal or electronic variety maybe a little further. Make yourselves available for a webchat or WhatsApp messaging, but at some point a conversation is going to happen, for which the phone is still key. Real time communication where you can hear the “unspoken” questions, the pauses, the hesitations and potential objections.
Because if we really want to win new customers (especially in a business to business environment), then we have to KNOW them. We have to understand what they need and when they are likely to need it. We have to build reputation based on understanding and trust. The message, whether delivered via adverts, chat, e-mail or social, will only get you so far. After that you have to be available for a conversation, to really listen to what that customer needs and to ensure you have the right solution for them.
Quality of service adds to reputation and credibility, so the non-sales people have a part to play too. If levels of service and customer satisfaction are high then include this in your marketing messaging, all of which can help you get a foot in the door. Speaking to prospects and customers allows you to properly understand their needs such as what and when they need/want to buy. How you communicate with them must include their preferred channels to maximise engagement and gain insight.
You’ll need to tailor that approach according to sector, profile and demographics, but speaking to people is where you start to bring all that hard work together.
King’s Coronation bank holiday
Do employees have a right to time off on 8 May?
Many Brits enjoyed not one but two additional bank holidays in 2022: one to mark the Queen’s Platinum Jubilee on Friday 3 June and another on 19 September, the date of Her Majesty Queen Elizabeth II’s State Funeral.
This year, a further bank holiday has been proclaimed in honour of the Coronation of His Majesty King Charles III. It will fall on Monday 8 May, following the Coronation on Saturday 6 May.
With another unexpected UK public holiday approaching, business owners will yet again be left wondering whether their employees are automatically entitled to the day off. Unfortunately, it’s not a simple yes or no answer – it will all come down to the employee’s contract.
The law on working bank holidays
Unfortunately for employees, there is no statutory right to time off for bank/public holidays. However, employers may choose to include these days as part of employees’ annual leave entitlement.
Therefore, whether employees are entitled to time off on 8 May will very much depend on the specific wording of such clauses.
What do we need to look for?
Within an employee’s contract, holiday entitlement will typically be expressed as either:
X days’ holiday, plus bank holidays; or
X days’ holiday, which includes bank holidays.
This will be a key factor in whether they can take advantage of any new bank holidays.
For example, if the contract states something along the lines of:
“You are entitled to X days’ paid holiday each year. In addition, you are entitled to take public holidays.”
then as bank holidays are included on top of the employee’s annual leave allowance, and as the contract doesn’t stipulate the exact number they are entitled to, the employee will be contractually entitled to take and be paid for the extra bank holiday on 8 May.
However, the employee’s contract may instead state:
“You are entitled to X days’ holiday during each holiday year. This is inclusive of any of the normal public holidays that you are permitted to take. The business recognises the following public holidays…”
In this situation, because bank holidays form part of the employee’s set holiday entitlement and because you have expressly provided the public holidays in question, the employee won’t have a contractual right to the extra bank holiday in 2023.
What if we're closed, but staff don't have a contractual right to time off?
If you intend to shut up shop for the day and your contracts don’t give employees the right to the extra bank holiday, employers have two options.
First, you can require employees to use a day of their normal annual leave entitlement on 8 May so that they don’t miss out on a day’s pay. Employers have plenty of time to do this, as they are only required to give two days’ notice for the one day of leave, but it would make sense to get the date in the diary well in advance. We recommend confirming this in writing to avoid any issues.
Alternatively, as many did with the additional bank holidays in 2022, you could choose to permit an extra day’s paid leave as a discretionary gesture. The fact you allowed employees to take these extra days off last year doesn’t bind you to make the same decision in 2023; however, given the well-documented benefits of reward and recognition, this may pay dividends.
Inadequate or outdated contracts can present real problems for employers, as well as expose your business to legal risk. Our Employment Law specialists know exactly what makes a good employment contract, from the essential legal requirements right down to the subtle nuances in wording that can help to protect your interests.
To ensure that yours are robust, compliant, fit for purpose and offer maximum flexibility for your organisation, email CCP@worknest.com to request your free consultation.