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Thursday, February 05, 2009

BPO - Process Risks

Process risks are, by far, the most comprehensive set that needs to be managed properly for ensuring minimal operational problems. Each business process has its own set of metrics that are important to the buyer as well as the vendor of these services. The perspectives of the clients and vendors of BPO services regarding risks are interesting. To the BPO services buyer, overall high customer satisfaction is the goal of customer-facing processes. Other risks may be important, but are subservient to the customer satisfaction goals.

The BPO services vendor is interested in making sure that process risks covered by contractual obligations are addressed first and foremost. Since many contracts include provisions for incentives and penalties for meeting and not meeting certain metrics, they end up high on the agenda. However, many vendors go above and beyond these and keep track of other metrics that help them with internal agent performance evaluations. Other metrics that will help them make sure that the business process is executed properly could also be monitored, whether they need to disclose these to the customers or not. They know that if these metrics aren't met consistently, the entire contract may be in jeopardy sooner or later.

A broad classification of process risks is one of qualitative risks and quantitative risks. Qualitative risks may deal with customer satisfaction issues and are measured usually by the BPO client using customer satisfaction surveys, in case the processes are customer facing. In non-customer facing processes such as financial accounts finalization, qualitative risks may be linked to an assessment of how well the services were provided.

Quantitative risks broadly deal with efficiency and effectiveness risks. They can be dealt with appropriately through prudent and appropriate choice of metrics. Efficiency metrics usually deal with time-related aspects of a business process. Average handle time and average hold time are good examples of efficiency metrics that deal with telephone support. Efficiency metrics may also include such items as number of loan cases handled per hour or number of claims handled per hour.


  • At 3:51 AM, Blogger shubh said…

    Detail analysis of qualitative risks and quantitative risks before finalizing off-shoring deal is must if some one wishes to rope in a outsourcing vendor for long term basis.


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