More tech in more countries means more competition

At the SOCAP 10 conference in October I heard Leila Janah presenting her thoughts on where BPO (business process outsourcing) is headed when it comes to social enterprise. Although I’m not quite as confident as she is on the ease with which complex BPO projects can be reliably broken into small pieces, farmed out to different vendors in different parts of the world, and then sewn them back together with high quality, I do see the writing on the wall when it comes to BPO.

As the cost of Internet connectivity and computers continues to go down, there will be a larger and larger potential pool of people in the developing world to do BPO work. Furthermore it’s not unreasonable at all to assume that there are many “untapped” people in these countries who are extremely talented and who can do great work in the BPO space as operators or more. Thus it seems very reasonable to assume that the price points that customers will pay for the low end work is going to be driven down.

The one fly in the ointment would be on the service and reliability end. It’s one thing to be able to *technically* do the work, but what about being able to understand what the client wants? And how about being able to flex on the fly as requirements and needs change?

Yet I bet that even at the low-end, this interface will be figured out. It could be that a middle layer player develops (if it’s not there already) that handles all of the client facing communication and negotiation, and is able to efficiently farm out the hands-on work. As a former program manager, I really believe that the proof is in the pudding–I’ve seen too many “that ought to work” ideas not actually work. So we’ll see how well this one works.

OK so the vendor supply for low-end BPO will grow, and that will mean lower prices paid for the work. But what does that mean for an existing BPO player–what should they do?

Any ideas? Post your comments below.

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