Why Experience Matters

The work experience of corporate professionals charged with sourcing or managing relationships with BPO providers often drives business priorities and styles of governance. It can also drive success.

Veteran BPO practitioners, those with five or more years of experience, report achieving higher success than their counterparts who have four or fewer years of sourcing experience. While the gaps in success were not large, BPO satisfaction is often driven by experience and engagement tenure, highlighting that the first 1–3 years of any BPO effort can often prove a painful experience.

Paradoxically, less-experienced sourcing managers are the ones who find themselves in the position of leading the transformation of a business process such as finance and accounting, procurement or even customer care. Lack of experience in this critical role highlights why many outsourcing engagements struggle to meet goals, especially during the early years.

Overall, though, respondents did not view outsourcing as the chief means to enable significant process improvement. Respondents that had undertaken or were pursuing BPO — in all categories except for procurement — responded most frequently that process improvement/transformation was not even needed/planned (procurement was a tie between not needed and internal transformation). Respondents considering a business-process transformation also expressed a preference to undertake those efforts themselves or with the help of a third party as opposed to part of an outsourcing effort. HR, at just 16%, was the leading process area undertaking transformation via outsourcing. This highlights the complex decision many sourcing managers face about whether to tie together two efforts as complex as BPO and process transformation.

Getting Ahead

Given the wide range of knowledge and skills required to source and manage external service providers, it’s not surprising that study respondents seek additional business training or certifications. The main areas of training or certifications include: Six Sigma, finance/P&L management, supply chain and Balanced Scorecard.

More experienced BPO sourcing customers, those with five or more years of experience, indicated an above-average interest in learning about finance and P&L management. Surprisingly, the biggest split between less experienced BPO practitioners and the “old pros” concerned an interest in culture and diversity training. Nearly one in four veterans seek this training, compared to just 10% of the less experienced specialists.

The level of participation in outsourcing was strong with over one-third of all respondents either currently engaged in BPO, or planning to use it, in all process areas covered except research/pharmaceutical (18%). Companies studying or engaging in research/pharmaceutical, though smaller in number (which is to be expected given that more specialized type of work is not common across all industries) were also among the most frequent to use outsourced BPO, nearly as often as those organizations outsourcing customer care. This highlights the changing nature of BPO and the growth of more complex “Knowledge Process Outsourcing” in offshore markets.

Given the strong and ongoing investment levels in BPO, increasingly on a global scale, many organizations need to re-think their approach to investments and incentives in sourcing and outsourcing management. These areas are the lynchpins of outsourcing success.