A few metrics should be followed for routine checks and assessments to gauge the development of an outsourced entity or the growth of an organisation. In this post, we’ll focus on BPO KPIs, their advantages, and the many measures used for assessing the success of the BPO.
What are the KPIs in Business Process Outsourcing
A crucial metric for analyzing the results of the BPO is the KPI or key performance indicator. It aids the organisation in assessing the effectiveness of the outsourced process and ensuring that the primary goal of the organisation is upheld.
The key performance indicators (KPIs) examine several departments, such as business process outsourcing (BPO) performance, service quality, and alignment of service delivery with organisational goals and objectives.
The cost-effectiveness of BPO is one of the most crucial parameters that the KPI measures. Instead of having an internal processing staff, an organisation outsources business to save a significant amount of money. Therefore, collaborating with a BPO needs to be economical to fulfil its main goal. Every one of these parameters needs to be measured regularly to monitor the organisation’s progress toward success.
KPIs serve as an organisation’s watchdog when assessing the performance of an outsourced business. They draw attention to or set off any deviation in the BPO’s operations, forcing the company to make the improvements required to address the problems. The KPIs could change based on the BPO’s distinct role. However, there are a few KPIs that are common across all BPOs.
Metrics like operational efficiency, quality, customer experience, compliance, and risk management are a few examples of essential KPIs. Of the many KPIs that are accessible, some are required for the entire organisation to track; failing to do so will impede business objectives and continue to be a barrier to continuous progress.
The most important component of every business is its clients. Analyzing the customer-based performance indicator is important, and the results should be carefully considered. Customer experience KPIs and the customer retention rate are intimately related. A higher score would indicate a higher likelihood of keeping the same customer, which could lead to ongoing business interactions. A positive customer experience KPI will lead to seamless customer interaction and is a favourable indicator of the organization’s progress.
Consistent observation and investigation of these BPO indicators can assist the organisation in making well-informed decisions and enhancing its outsourcing operation.
Key KPI Metrics for BPO to Track
Of all the KPIs available, the following are the most crucial ones for a firm to monitor to grow:
Customer Satisfaction (CSAT)
The most important KPI in an outsourcing partnership is CSAT. The firm can determine the level of customer happiness or dissatisfaction by looking at the CSAT values or scores. This metric is crucial since the outsourcing vendor manages the organization’s customers; therefore, knowing the progress of the assignment is greatly aided by these metrics. If the client’s level of unhappiness is higher than average, the business may lose out on a valued client.
These indicators are accessible via surveys, consumer evaluations, and feedback mechanisms. A greater retention rate is a result of increased CSAT.
First Call Resolution (FCR)
One significant statistic that aids in cutting down on job completion time is the FCR KPI. The first contact rate (FCR) is the proportion of customer issues that are resolved on the first attempt. On the other hand, ensuring that the customer is satisfied is one of the key benefits of the FCR KPI. This helps them save a lot of time and lessens the need for subsequent follow-up.
Average Handle Time (AHT)
Solving a customer’s question or problem in a single call or meeting is the primary need of BPO.In evaluating the effectiveness of BPO agents, this AHT KPI is essential. The average handling time calculates how many calls the customer makes from the initial call until the problem is fixed. A lengthier AHT implies a disgruntled consumer and a greater AHT means the BPO representative needs more expertise and training to handle the client.
Service Level Agreement (SLA) Compliance
SLA KPI is an agreement that is made between a business process outsourcing (BPO) provider and a client regarding the service standards that the BPO has agreed to provide, as well as how committed the BPO is to maintaining quality, how quickly they respond to issues raised by clients, how long the BPO operates and is available to the client, how many issues remain unresolved, etc. Frequent SLA compliance monitoring can assist the organisation in pinpointing areas that require enhancement and guarantee the smooth operation of the client-BPO relationship.
Cost Per Contact
One such crucial element is cost per contact since the amount that the company pays the BPO only depends on how many calls or contacts the BPO has with the client by the terms of the contract. The company should compensate the BPO for attending to the clients as well as for every task completed.
It is not profitable to deal with an existing customer without resolving their issue because the company must pay for each rework completed by the BPO. Rather, acquiring new clients regularly aids BPO in rationalising its revenue production.
Agent Utilization Rate
BPO-hired agents get paid according to the total amount of hours they work. The period between their login and logoff times is known as their work hours. To help the business distinguish between the time they spend working on productive tasks and the time they spend working on non-productive tasks, they must assess their agent utilisation rate.
Net Promoter Score (NPS)
The Net Promoter Score (NPS) gauges a customer’s fidelity to a business and the frequency with which they refer it to their social network. It’s another strategy for boosting brand recognition. The Net Promoter Score indicates a customer’s level of satisfaction as well as their tendency to recommend both the product and the service.
NPS encourages an organisation to serve delighted customers and attracts and recommends new customers for the superior service provided. It also helps an organisation develop its brand and business without any kind of advertising.
Benefits of KPIs in BPO
Improved Performance Measurement
KPIs are the driving force behind the efficient operation of the company and BPO. Every organisation needs a metric to assess how much work is completed efficiently, highlight areas that need more focus, and identify areas that need small or significant optimisation for overall development and progress. Therefore, enhanced performance measurement monitors all the factors that help the organisation achieve better outcomes, such as productivity, efficiency, on-time delivery, proactive handling of the issue at hand, and so forth.
Better Decision Making
Organizations make critical and pivotal decisions on their affairs with the aid of data-driven indicators. These variables can be measured consistently to monitor trends and advancements. The KPIs assist the organisation in determining its current course and confirming that it is in line with its long-term goals and vision.
KPI also provides information on market trends and aids in the analysis of how well a firm is doing about industry norms. It can assist the business in making well-informed decisions about the implementation of a continuous learning cycle, necessary modifications to its policies, and process enhancements.
Facilitation of Continuous Improvement
KPIs provide an accurate and clear view of an organisation’s actual position in the market. This statistic can be used to develop corrective action plans, promote continuous improvement, and help the organisation close any gaps and attain the standard metrics.
Effective Vendor Management
Measuring the outsourcing vendor’s KPI is required for the organisation. In addition to the organisation’s performance, the outsourced vendor’s KPIs, such as error rates, quality assurance, CSAT, NPS, and contract compliance, can support the management in maintaining accountability and promoting successful and beneficial outsourcing relationships.
Conclusion:
In the current business environment, an organisation’s outsourcing provider is now an essential component of them. Similarly, if the BPO KPIs are routinely assessed and the required steps are taken to achieve significant organisational growth, client satisfaction and retention will be attained in a smooth, productive, and efficient manner.
FAQs
1. What are the most critical KPIs to track in a BPO environment?
The most important key performance indicators (KPIs) for a company are FCR, AHT, SLA, NPS, CSAT, QA, cost per contact, and so on.
2. How often should BPO KPIs be reviewed?
The kind of KPIs determines the time or timetable for reviewing them. AHT, SLA, and FCR are a few KPIs that must be examined every day. On the other hand, the EAR and utilisation Rates can be examined monthly, whereas CSAT, NPS, and QA should be reviewed every week.
3. How can KPIs be customised to fit specific BPO contracts?
KPIs can be tailored to match particular BPO contracts by carefully examining the goals, expectations, and major obstacles of the client. KPIs should be precisely tailored to the goals of the customer, and a clear statistic between the client’s expectations and the BPO’s success should be defined.
4. How can poor KPI performance be improved in BPO operations?
Enhancing inadequate KPI performance in BPO calls for a methodical approach that includes determining the main problems and their underlying causes, taking the required action to fix them, and maintaining a continuous monitoring procedure.
