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How to Evaluate a Partner for Digital Operations

by - ThoughtFocus | February 7, 2023 |

When thinking about the skills needed to redefine the customer experience, the assortment of expertise required looks remarkably different than it did in the past. Whether integrating advanced technologies like AI (Artificial Intelligence) and machine learning or looking at back-end systems like Salesforce and SAP, the rapidly evolving nature of these areas demands a constant infusion of new skills and expertise.


Many organizations struggle with the basic framework of skills required to facilitate digital transformation. Most will need a combination of key employees who understand the secret sauce and are open to change plus consultants / strategic partners who can be the catalysts for change and own the transformation roadmap. The digital landscape is changing too rapidly for any one company to have all the resources in-house to run the business and bring about the change.


If growth and scale are your priority, it is vital that you pick a partner with the right skills and mindset to align and deliver desired outcomes in the best, most efficient manner possible.


Understand that, traditionally, most BPO partners make money by increasing headcount. Going digital cannibalizes their well-defined steady streams of revenue. To deliver transformation, you need a vendor willing to take risks and use all their knowledge and experience to accelerate your growth – without adding more FTEs (in fact, by eliminating them).


The job of Digital Operations is to create dramatic transformation followed by continuous innovation and improvement. With Digital Operations, as outcomes are achieved, new outcomes and KPIs (Key Performance Indicators) replace the old, and the cycle of progress continues.


“Traditional outsourcing arrangements focused solely on price and operating cost reduction are going the way of the dodo,” said Rajaram. “Today, cost reduction by itself is not a successful measure of operational efficiency. Today operational efficiency needs to be seen in the context of user experience that drives new revenue, process simplification and automation that reduces headcount, and analytics that eliminates waste. Such new measures coupled with offshore talent deliver a quantum change in operational efficiency. With your outsourcing partner, you must change the conversation from one of reduced rates to that of a larger, overall outcome. You must incentivize your partner to drive Digital Operations and to measure them with new SLAs (service level agreements) that factor in the new metrics. Instead of reducing costs, you may be better off with higher rates, for lower head counts that deliver better, faster and with greater customer satisfaction.” In other words, “don’t ask your partner to manage the mess for less. Partner with your provider for an outcome-focused, world-class process that uses fewer people and more digital technology,” advises Rajaram.


Moving from an adversarial vendor relationship to actively seeking mutually beneficial outcomes requires cultural process maturity from both parties.


A culture that rewards beneficial outcomes gives both parties an incentive to deliver the best outcomes—where both parties have each other’s interests in mind. With Digital Operations, regular, transparent reviews of the progress towards the vision are supported by a business relationship that allows course corrections where and when needed.


In the end, short-term efficiency incentives may prevent the generation of greater process efficiencies that, in the longer term, will result in greater cost efficiencies. When the offshore provider thinks about how their action will impact their financial incentives instead of your outcomes, behaviour is no longer aligned toward mutual success.


“Our approach and philosophy are simple,” said Shylesh Krishnan, Executive Vice President, ThoughtFocus. “When outcomes are achieved, the customer is successful. When the customer is successful, their business grows. That means our relationship is strengthened, and we are asked to support other areas of operations. As a Digital Operations partner, we don’t handicap ourselves to steady state revenue. We drive change and we thrive on new opportunities. By being the catalysts of change for our customer growth we risk our revenue but earn their valuable trust that ensures we stay partners in their evolving world.”


When outsourcing processes, a Digital Operations mindset represents more than just a contractual change. These partnerships represent a significant shift in how a relationship is defined and managed. Unlike lift and shift, which is dominated by simple labour arbitrage, outcome-focused engagements create incredible process efficiencies and – as a result – dramatically reduce the cost of labour. When your partner understands the domain, productivity and efficiency gains are delivered faster. Delivery is now less expensive because customers are happier, operations are more efficient, and business has gained the capability to scale more quickly.


Are Growth and Scale Strategic Objectives?
If growth and scale are your priority, it is vital that you pick a partner with the right skills and mindset to deliver your desired outcomes in the best, most efficient manner possible. Traditionally, most BPO partners make money by increasing headcount. That’s not how we operate at ThoughtFocus. Get in touch and request our Digital Operations white paper. Learn how ThoughtFocus will use all our knowledge and experience to accelerate your growth.