As with all things in life, the CX services market is evolutionary.  Like short-lived trends in fashion or music, customer management delivery models come and go, some as fast as the latest flavor of the month.  For some time, enterprises strategically embracing smaller contact center operators has been a popular topic of discussion.  But there appears to be a new shift underway, one that has the potential to relight the commercial fire of bigger BPOs.

The scale of a BPO’s operations should not be discounted in the 2024 CX services procurement dynamic.  For some time, the accepted narrative has been that enterprise customer management decision-makers want to work with smaller, up-and-coming outsourcers. These entities offer a nimbler operating model that can turn quickly as the market requires. Also, small/medium BPOs are felt to provide partners with a more intimate, aligned relationship.

Yet these perceptions may be in for a reality check.  According to soon-to-be-released results from the 2024 Front Office CX Omnibus Survey, the enterprise customer services buying community is tacking toward larger, more global operators. That move comes at the expense of smaller-to-medium-sized providers.

There are several reasons for this apparent change. First and foremost is business continuity planning.  The 2024 Front Office CX Omnibus Survey shows that not only is this a major pain point for enterprise contact centers, but it is also an important investment priority within captive executive over the coming year.  Finding a partner that can ensure strong levels of seamless operations is a key consideration when selecting an outsourcer.  Many decision-makers perceive working with a larger BPO — with all its redundancy and delivery points — as a bulwark against business disruptions.

Larger outsourcers, with deep pockets and employer brand recognition, can readily source talent as well.  Naturally, this applies to different front-line language pools and functional expertise. But in today’s technology-driven buying market, higher-value skills are also in demand. Consider that enterprise contact center leaders indicate digital development capabilities, social media management experience, and CX subject-matter expertise are key BPO selection determinants. The likelihood is that this will gravitate many toward larger outsourcing players. Correct or not, the view is that a bigger, more established player can better position to offer these services and onboard the people with the required knowledge.

The tech stack also drives the enterprise CX community toward larger outsourcing providers.  2024’s Front Office CX Omnibus Survey shows that there will be pronounced demand among enterprises for analytics, cloud-based solutions, generative AI and automation offerings. By finding a one-stop shop with all these tools, not to mention the associated knowledge on how to deploy and manage these platforms, bigger partners might just have an edge in today’s market.

None of this is to say that emerging or mid-sized outsourcers cannot compete.  After all, many smaller to medium outsourcers have become experts in functional or vertical-specific areas of CX management, as chronicled in Ryan Strategic Advisory’s report Profiles in Emerging Outsourcer Success. And, by forging the right partnerships with other BPOs in different parts of the world or technology firms, business continuity concerns can be overcome. Also, many enterprises view larger outsourcers as more challenging to deal with, due to excessive layers of bureaucracy. A final point is that the small-medium sized provider community will always have an advantage with enterprises of a similar scale, which do not see relationships with increasingly large BPO behemoths as feasible.

Still, at present the market is leaning toward the benefits that larger BPOs can offer, and ongoing consolidation appears to be only driving further such interest.  For those operators falling into this category, the slogan of Carpe Diem has never been more applicable; for those in the small-medium space, pivoting now to ensure maximum viability has never been more important.

Image sourced from Brian Metcalfe under Creative Commons license