Industry Commentary

Political Disruptions Underline Offshoring Risks

By August 23, 2020January 10th, 2024No Comments

Since March, business continuity in contact centers has become a pressing issue.  This makes a great deal of sense given the pervasive impact of COVID19, and so it is right from the perspective of risk mitigation to address this virus’ impact on customer experience. But CX executives should not lose sight of other elements that can disrupt the steady flow of seamless interactions between agents and consumers.  In August, political instability has become more apparent due to a number of incidents in different parts of the world. These examples are all-to-real situations that highlight the need for customer experience delivery from stable and diverse operating environments when offshoring.

In Belarus, tainted elections have drawn Belarussians into the streets to express their collective ire, resulting in clashes with authorities and uncertainty as to what lies next in this Eastern European state.  In Mali, a swift and unexpected military takeover that deposed the President made headlines in all four proverbial corners of the globe.  The world can be an unsettling place.

To be clear, neither Belarus nor Mali are established offshoring delivery hubs for contact center services, though Belarus has a significant presence in IT development (as outlined in the most recent CX Files podcast).  However, the recent events in both locations, each of which borders at least one country with a significant customer experience industry, should be a reality check for outsourcers.

There is always going to be risk associated with offshoring CX work.  Unfortunately, this is something that even the savviest BPO executive can forget.  The lower operating costs associated with offshoring are effectively the premium that outsourcers pay to balance the risks that a country carries with it. Too often, what can look like a stable, steady delivery point can erupt, which has an adverse impact on the confidence of contact center clients.  Egypt’s revolution in 2011 and Nicaragua’s political disruptions in 2018 vividly demonstrate the point. While customer interactions were generally unchanged in both instances, the events surrounding them did little to endear these locations to existing and prospective BPO clients.

This signals the importance for outsourcers to conduct the right due diligence on a location before setting up shop.  And while today it is generally accepted that credible BPOs look for offshore or nearshore points that are based on value, as opposed to low costs, a heightened level of analysis on potential threats as it relates to political or societal disruption is needed.  While no one has a crystal ball to predict what may happen in a given country, digging into the political background of a location to uncover potentially simmering unrest is a practical thing to do.  In the end, it may mean opting for a more stable country that costs more.  But, avoiding a situation that places seamless delivery to end-users at risk is a small price to pay in the new emerging economic world order.

This also underlines the need for contact center providers to rethink the offshore in terms of offsetting risk with diversification.  Much has been made of this idea over the past several months in relation to COVID19, but the recent events in Belarus and Mali show that risk can be specific to select countries.  Outsourcers can no longer take the chance of being situated in simply one or a small number of delivery points. Rather, an efficient network of sites (either with other BPO partners or wholly-owned) in various parts of a region or the world will be the desired option for enterprise clients, which are likely to settle for nothing less.