Outsource Magazine

Every business needs a roadmap for its journey to success.  Whether you’re an outsource provider, an outsource user or a self-source provider, your business requires a roadmap and a strategic plan to continue and achieve your goals.  In the outsourcing world, strategic planning is more key now than ever, as our industry is under major change.  Change is coming from major technology offerings, new processes, evolving user behaviours, commoditising of the market and the drive to increase profit and viability.

Sitting at current profit and EBITA levels for many companies is not conducive to attracting new investors or achieving satisfaction with current investors, owners or stockholders.

Outsourced services - whether they are customer-service-focused, product support, call / contact centres, IT outsourcing, help desk, HR outsourcing, financial outsourcing, legal outsourcing or others - all require future plans which will lead to growth.  These plans need to ensure increased financial gain as well as increased customer retention and acquisition. 

Strategic Plans and Roadmaps

Strategic plans typically have been created in the past, but few are followed through fruition to the length of that plan. In reality, most outsourcers plan for the next year based on this current year’s performance and challenges.  Many company boards are so focused on what’s happened - or, more realistically, what’s not happened - and drive the tactical plans for the next 12 months based on those experiences.  Seldom do we see a three-to-five-year plan that actually drives the next 12 months to a futuristic goal.  Typically the focus is on current issues, which usually are the failure to meet last year’s plan. Futuristic plans require some level of commitment to the duration of the plan and to not deviating too far as to accomplish short-term goals only.  This commitment is always difficult due to pressures to achieve this year’s goals.

Failure to follow long-term strategic plans is largely due to pressures and a fear of the CEO’s worry about their job if they don’t make the current goals.  Board members’ pressure on the CEO does tend to drive this behaviour, while investors tend to drive the Board’s goals.  And so it flows. I have heard CEO’s who responded to a three-year strategic plan with “if I don’t make this year’s goals, I won’t be here in three years, so what do I care about the future beyond the next 12 months?”.  This is so short-sighted - but is nonetheless a true reality in today’s business climate.  And thus, we have the current low-profit performance scenarios being played out in so many companies.

The Importance of a Three-Year Strategic Plan Now

If there was ever a perfect time to plan ahead, now is the time.  With technology changes and user-behavioural changes in the market, a three-year plan could make all the difference in the health of an outsourcing company. In today’s market most of our competitors are saying and delivering the same thing: cheaper, faster, better. This one artifact has turned our eco-system into a commoditised market, where price is the main differentiator.  And there goes the reason for static or shrinking profit levels today.

User-Behavioural Changes

Users of products and services are using new technologies today beyond anyone’s dream or anticipation.  Smartphones and the web are replacing the use of the phone for sales, support and customer service.  Users are gaining much more power to accessing information at real-time speeds - and not only like it, they’re rapidly depending on it.  If a vendor can’t facilitate communication on this new reliance, they’ll find their user base moving to those who can.  A key fact is that smartphones and handheld devices are outselling PCs today.

Moving from the current channels of communication from a predominantly phone/agent-based support model (that we are accustomed to today and in the past) to a more automated support system is definitely possible, but not easy.  But this is what users want and it’s here to stay.  In years past users stated they wanted to talk to a live agent.  But today, with texting, the majority of users trend to typing versus wanting to talk to someone.

Moving to these new channels requires major change of any outsource company; in process, philosophy and internal structure.  “Butts in seats” has been the mainstay of most outsourced providers, but today and tomorrow it might not be the best solution. To change from a labour/phone-oriented business to an automated self-serving provider requires huge changes in structure, mindset and process.  I’m not saying all labour-oriented work will disappear over the next three years, but certainly the ratio of automated support will increase and, in most cases, surpass the labour support required today.  That’s saying that a high percentage of phone channels will be replaced with texting, smartphone applications and web applications.  This lends to more automated support versus live conversation.

Technology Changes

Today and over the next several years, viable technology offerings can and will allow for major changes in the communication channels between vendors and users.  New Artificial Intelligent (AI) products offering Virtual Agents and Assistance, Web Avatars which offer guidance options, smartphone applications, multi-lingual chat services, self-help, self-healing and many other offerings will tend to the user-behavioural trends and lend to more business options for outsource providers.  With new channels come new opportunities, such as advertising revenues and the ability to change from a “cost centre” into a “profit centre”.  Think about it: on the phone conversation model advertising is not present, versus on the smartphone application and web, advertising is not only viable, it’s accepted if used appropriately. Advertising should never eliminate or hinder support or communication, but if you’re drawing the customer hits, you can wisely advertise on the side and gain additional revenues to every channel contact made.

Summary

So goes the need for a three-year strategic plan and roadmap. Finding the right new technologies, the right processes, the new internal structure to implement and manage these changes and making the right decisions to make this happen will not come from hip shots, but from strategic sniper fire carefully targeted to achieve success.  A multi-year strategic plan will ensure what steps your company needs to make, the timing of those steps, critical success factors and success metrics for achievement beyond the current 12-month profit performance.  Your decision is simple:  plan for success this year or plan for success to achieve a solid future in your company.