Those of us who have been around long enough to remember American television commentator Lou Dobbs and his infamous list from 2009 that named and shamed companies who were "exporting America," Dobbs accused these companies of outsourcing jobs, primarily in technology or technology-enabled services, out of the US to benefit from wage differentials in other countries. While the list did precious little to stop the rapid growth of business process outsourcing (BPO), the industry itself has spent the last decade in the throes of radical change and continuous reinvention.
Here is how we see the evolution of the BPO business model:
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Phase 1: Classical BPO (1990s to mid-2000s). The growth of globally connected telecommunications networks gave rise to the classical BPO business model. This model leveraged wage differentials between geographies and the availability of skilled language talent in locations such as India, the Philippines, and South America to "rightshore" work. Out of this era came the strong focus on smooth offshore transitions and industrialized process excellence.
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Phase 2: Omnichannel BPO (late 2000s to late 2010s). Consumer preference in the decade after 2010 was marked by the proliferation of digital, mobile, and social channels (SoLoMoCo[1], anyone?) and the diminishing glamor of voice-based customer engagement. While the trend toward outsourcing only increased, client companies wanted more from BPO partners than vanilla voice engagement. BPO vendors began the long and arduous transition to "digital BPOs," using technology to gather, store, analyze, and use context and to create engaging experiences as customers jump from channel to channel. Many BPO vendors are still grappling with this transformation. However, even this is not enough for what comes next.
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Phase 3: Insights-driven BPO (late 2010s and beyond). Advanced analytics, automation, data science, and AI have reset the goalposts for