10 Business Process Outsourcing Trends to Watch in 2012

To welcome 2012, we’re starting a new Outsourcing Insights tradition: picking the top BPO trends for the new year. As expected, hot technologies are a running theme, as is the health—or lack thereof—of the global economy. Maybe we’ll see some clarity (at last!) to the heavily hyped field of cloud computing? Regardless, it will be fun to take a look at these at the end of next year and see if we were on the money or off the mark. Here, in no particular order, are our top business process outsourcing trends for 2012:

1. The rise of mobile apps.

Executives and managers hate being chained to their desks, and they love the power of tablets and smart phones. Expect BPO providers to provide clients with mobile apps for monitoring and auditing outsourced processes. Features will incorporate business intelligence, dashboards, analytics and instant messaging with the provider.

2. The “social” contact center.

Customer rants or raves are no longer limited to phone calls and email missives. Outsourced contact centers will have savvy staff keeping customers happy and engaged through Facebook, Google+, Twitter and other social networks. “Social Customer Relationship Management” will include following chatter on social networks. Quick-reaction teams will be ready with a strategy and response to potential PR debacles.

3. Gamification will liven up the dull side of BPO.

Business process engineers will apply game theory to more and more business processes as a way of driving innovation into the enterprise. Although gamification has emerged in the past year as a hot buzzword, the concept, as applied to business, has been around seemingly forever. Examples are frequent-flier miles and other promotions that reward a loyal consumers looking to “level-up” in the game. Game mechanics make repetitive processes more fun, keep rules and goals clear and consistent, and deliver rewards (think cash bonuses) to staffers based on merit, rather than “who you know” or “how long you’ve been here.”

4. Public-private initiatives worldwide will stimulate BPO growth.

Countries will aggressively compete for a slice of the global BPO market, which is expected to grow at a annual rate of 5.4 percent to $93.4 billion in 2015, according to analyst Ovum. Providers, industry groups and governments at all levels will ally to develop incentives to attract BPO jobs. Lures will include breaks on taxes and fees, as well as free or low-cost courses to improve residents’ English skills and technological know-how. As India becomes more expensive, look for the Philippines, China, Africa and Latin America to roll out the welcome mat for outsourced business processes at the low to mid-point of the value chain.

5. The U.S. will take a lesson from international public-private alliances

The U.S. ruralshoring model—outsourcing processes to communities with low costs of living—will continue to intrigue companies that are not satisfied with their farshore experiences. Astute governments at the state and local levels will take a page from competing countries’ playbooks and engage chambers of commerce and BPO providers in strategies to bring those jobs home.

6. Technology proving grounds will clear up the clutter

In addition to developing innovations in-house, the best BPOs will torture-test third-party technologies in search of reliable and stable process solutions. Robotics, embedded sensors, QR codes and language recognition will all be part of a toolkit to lower costs and increase efficiency and reliability. BPOs will pilot-program many of these products, either with their own internal processes, or with clients’ processes to meet a demand for innovation. After the dust clears, we’ll have a better idea of what technologies will be here to stay.

7. Latin America will continue to open eyes as an attractive nearshoring destination.

English-Spanish language skills, a young, highly skilled BPO workforce, cultural similarities and a good time-zone fit—there’s a lot to love about Latin America, especially when you factor in labor differentials of 20 to 40 percent. The key is evaluating each country’s advantages and disadvantages to find the best fit for your process. Things to look at include education support, physical infrastructure and political stability. Now you have a good excuse to spend a few days exploring Mexico, Colombia, Brazil and other Latin American destinations!

8. Economic uncertainty will boost outsourcing demand.

Fears of a double-dip recession will have enterprises looking for ways to keep costs low. A quarter of organizations surveyed by industry analyst Horses for Sources say they intend to focus more on outsourcing in the event of another downturn. Buyers will have gained valuable outsourcing experience after the last recession. Having already tamed excessive costs during the last dip with labor arbitrage, buyers will want BPO providers to make improvements through standardization and proven technological innovations.

9. A shortage of skills at home will drive BPO and ITO.

Although cost savings are seen as the impetus behind outsourcing, a Duke University  study says otherwise. Managers surveyed by the Fuqua School of Business said a shortage of skilled domestic employees is the primary reason jobs are moved overseas.  Over half of the managers said that with most functions, offshoring resulted in no change in the number of domestic jobs. Expect the high-skill outsourcing trend to continue, if this popularly cited statistic holds true: By 2020 there will be a shortage of 14 million post-secondary educated skilled workers in the U.S.

10. “The Cloud” will continue to be a popular and confusing IT marketing buzzword.

Unfortunately, the “cloud” and all the exasperating IT jargon (Caas, PaaS, IaaS, etc.) hovering around its nebulous edges will still be heavily hyped across the industry. News articles, blog entries and white papers will go on forever about “leveraging the cloud” for BPO, but will rarely offer real-world examples, and will still leave readers confused. To cut through the nonsense, just remember that “the cloud” is the Internet. And if you’re in a meeting where a “cloud solution” is proposed, eliminate the hype by getting concrete answers to these questions:

• Is it reliable?
• Is it secure?
• Is it scalable?
• Is it always available?

If you like what you hear, you’re well on your way to finding true substance in that ethereal cloud.

###