OUTSOURCING
  • flatrock
  • 13 May 2020
  • 10 min read
Business Process Outsourcing
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The new coronavirus outbreak disrupted the way we work and run the business. Due to the pandemic, many countries have announced nationwide lockdown. The sudden change left companies struggling to implement a business continuity plan and keep business as usual. As we are experiencing the biggest global pandemic of our century, it is not surprising that many enterprises are finding it hard to keep up with the new challenges. Many small and medium businesses had to close their doors to customers. But some had to do something they never considered before the situation got this serious – send employees for working from home. It affected the companies and even the whole industries. However, the business process outsourcing (BPO) industry seems to be the one that got exposed the most.

If your company has a BPO partner, you might have experienced some difficulties since the outbreak started. Depending on the countries you have outsourced your business in, these difficulties might vary from minor issues to huge ones. Such as your vendor shutting down the business completely. BPO is one of the industries that quickly got exposed during the ongoing pandemic. The weaklings and benefits, dos and don’ts of the business process outsourcing are coming out on the surfaces. It might be a hard process to go through for many companies. However, it also gives them food for thought about their ongoing outsourcing strategy.

Issues the business process outsourcing industry is facing

As outsourcing is a global industry, the current situation of it highly varies and depends on the location. The pandemic has affected all business process outsourcing companies in one way or another. However, the size of the impact depends on the current Covid-19 situation in the country. Including how well the government is handling pandemic, and how ready are the employees to work from home without the interruptions.  Traditionally, companies outsource their services to reduce operational and HR costs. Hence, the most popular offshore outsourcing destination for western companies have always been the third world or developing countries, especially in Asia. While this strategy was working well for years, now companies are facing challenges because of it.


1. The lack of readiness to work from home

Reportedly India, one of the most popular IT support outsourcing destinations is struggling to keep its BPO industry going during the coronavirus outbreak. India, as well as Russia, another common choice for IT outsourcing, are seen to have the slowest response to the pandemic on a global scale. The current situation and foreseeable future do not look promising too. Many predict, that the medical and economic situation will only get worse.

Currently, India is in a nationwide lockdown, which means that companies, including the BPO vendors, are working from home. However, seemingly, shift to the WFH is not as smooth, as in other countries. As reported, the majority of the Indian employees are not ready for working from home. Not many of them have conditions suitable for work, equipment, and even proper internet to stay connected. BPO companies in India are racing to stay in business and provide contracted services to western companies.

BPO companies are not the only ones to have difficulty adapting to the current reality. Thus, the measures they take to continue working are understandable. However, one should also consider the grown demand for IT support. As people are using internet platforms and tools more actively today, it might create more challenges too. The traffic on platforms and apps are growing and quick IT support and maintenance are crucial for companies worldwide.  India is not the only country where BPO vendors find the shift to WFH difficult. The large part of the BPO industry has shown that it is not ready to handle the current situation. Due to the overall medical, political and economic situations, the third world countries seem to be struggling the most.


2. Challenges in managing sensitive projects

The example of India shows that companies that outsource in such countries have to be concerned about the privacy and the confidentiality of their projects too. As BPO companies, like other businesses, are now working from home client information might be more vulnerable due to the lack of proper security measurements.  Companies outsource not only IT support, but business and financial operations, data management, software development, and other various, important processes. In some cases, BPO companies have to seek permission to work from home on certain projects and for certain clients. But even with the permission given, there is little to no guarantee that confidentiality and crucial information will be kept. In the end, if the data breach happens it is hard to determine who should take responsibility due to the lack of regulations and current situation.

What you need to consider when searching for a new business process outsourcing Partner

While these challenges are hitting countries like India hard, we cannot say that the whole industry suffers to survive. In countries where the government had a better and more timely response to the crisis BPO companies are non-arguably in a better state. Based on the country you have outsourced your business your BPO vendor might have had to stop operations. Or else, it might be struggling to keep business as usual because of the technical or managerial issues. As a result, your company might be searching for a new BPO partner to keep your business running.

The current situation has shown the weaklings of the BPO industry, but as you see, it does not apply to all countries and companies equally. To ensure the smooth flow of your business operations you need to consider several crucial factors when searching for a BPO vendor. The global crisis that was caused by the pandemic shows us what is one of the most important factors when choosing a partner for business process outsourcing. You need to ensure, that the company of your choice will be able to handle such unexpected crisis as well as possible.

 

The most important factor

Your BPO vendor should have the ability to keep business as usual and run the company smoothly when employees are working from home. This includes having a crisis plan and using technologies that allow workers to keep working remotely. It is also important for the employees to have the necessary equipment for WFH and access to high-quality internet. In case employees lack readiness for WFH, the company should be able and willing to provide necessities to them. BPO partner your company chooses should have a proper security system, and provide NDA’s, so your confidential information is protected at all times.

Based on these factors, the location turns to be one of the most important factors. Companies in countries, where the overall political and social-economic situation is better are more ready to face the challenges and adapt to the new reality quickly.

How will the coronavirus outbreak change the outsourcing business?

We should be naive to think that once we can deal with the new coronavirus everything will go back to the way it was. We are now entering a global recession and nobody can surely say what the post-coronavirus economy will look like. As the BPO industry is struggling in some countries some of you might even think – is this it for BPO? Surely, the industry will change, but the need of the business process outsourcing will remain and might even grow further.


Seeing the benefits of sharing the risk

Many executives now understood the advantages of sharing the risk. One of the main benefits of outsourcing services is to share the risk that comes with certain operations and responsibilities. While the pandemic is global, it affects countries differently, again because of the measures, medical readiness etc. When you are running your business in one office, the risk that pandemic will affect you is higher. However, when you have certain operations outsourced in a different country, you can leverage it and keep your operations running smoothly.

 

Reorganizing the company structure

Unfortunately, the coronavirus outbreak hit many companies hard and urged them to let go of employees. Many companies postponed their ongoing or planned projects as today their main objective is to keep business going during the crisis. Once the pandemic is over, these companies will need to act quickly to gain the loss they endured during the outbreak and grow further. It means that enterprises will be willing to start working on the projects that have stopped. This requires finding professionals with the relevant skillsets and experiences quickly. Also, it would be desirable to hire such people with less cost and risk. As a result, many companies will turn to business process outsourcing vendors.

 

Acknowledging the possibility of remote work

Till today, it was unimaginable for companies to send employees for work from home. Working remotely was seen as a privilege that comes with certain types of job and in certain companies. While many employees desired remote work, employers found it to be impossible to implement.  But the sudden change in the time of crisis has shown that not many companies need employees to be working from the office. Many companies deal with the new circumstances quite well, overcoming tech, managerial and other challenges.

This made employers more confident in their business, and how they run it. It also made it clear, that some jobs might be done remotely and quite successfully. For the companies, that did not think of outsourcing because of the fear of lack of control, it will be a mind, and possibly a game-changer.

 

Realizing the BPO opportunities in Europe

One thing that the pandemic might change is where companies search for the outsourcing partner. In the beginning, enterprises outsourced insignificant parts of their operations and their main objective was to outsource them cheap. Today, businesses outsource crucial operations such as software development, sales, marketing, data management and more. Therefore, they need to consider other aspects of the BPO vendor

The crisis of the BPO industry, in one of the most popular outsourcing locations, might cause the geographical shift of the industry. Many countries in Europe are ready to take over the BPO business. Countries like Ukraine, Poland, Bulgaria, Georgia, Romania and others, have a high potential to replace the traditional outsourcing locations and soon, Western enterprises might turn to BPO vendors there. These European outsourcing destinations have some things in common. The vast majority of people have higher education, and the majority of the overall workforce speaks English, hence there is no language barrier. These companies serve the West European clients, meaning that their security systems, NDAs, and contracts are all in compliance with the EU requirements.

Due to the social-economic circumstances, companies in Europe are more ready to quickly adapt to the crisis and keep smooth delivery of the services, be it from the office, or home. At the same time, the economic situation in Eastern Europe is still very different from Western European countries. Meaning, that clients in Western Europe or the USA can get cost-effective solutions for their businesses.

Will the BPO industry survive this pandemic?

Nobody knows how the post-coronavirus economy will look like. But there is no doubt that the outsourcing industry will survive. However, the landscape of the industry might change. The demand for the BPO was steadily growing in the last years. It is expected, that this growth will continue, but it might grow in a different direction. Many enterprises will review their ongoing outsourcing strategy. Companies that have not outsourced before, will start considering this option as they saw the benefits of distributing the work, sharing the risk, and opportunities of outsourcing business solutions in Eastern Europe.

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