How to get the most out of your expiring BPO contract

How to get the most out of your expiring BPO contract

OABPO Blog Team Published on December 16, 2014

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The first few steps of outsourcing to a call center in the Philippines is deemed by many as the most crucial stage of the whole deal, and for a good reason: this is the part that determines how much of a success (or a failure) the partnership could be.

Much has been said to emphasize the importance of the initial stage that some may forget about another equally critical part of outsourcing business process outsourcing (BPO) services. While ensuring a smooth-sailing start is indeed fundamental, knowing what to do once your contract expires is also essential for your business.

Sometimes, however, clients act too late on the contract s end, with nothing else to do but to renew or extend the agreement. There s nothing wrong with that at all, except that if you let the end date sneak up on you, you might miss out on key opportunities to enhance your outsourcing experience like cost reduction, quality improvement, and stronger partnership. Worse, you could lengthen your tie to a bad deal.

So how can you keep that from happening? Early preparation is always key.

• Create a contract overview early on

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From the moment the deal is signed, you should identify key points to be included in the overview. This should be composed of important details, agreements, and dates, such as extension rules, renewal options, expiration dates, and notification periods. This way, you have a clear idea about the number of years or months you could extend, as well as anticipate when a notice of expiration will arrive.

 

• Do mid-term evaluations

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Evaluate your provider midway through the contract period. This is when the overview can prove its use, as it can act as the basis for determining if your BPO partner was able to follow through with their commitments. The evaluation also lets you find potential reasons to cancel or renew the deal, as well as adjust the outsourced services depending on the growth or change in customer demands. Doing any of these actions, of course, depends on the terms you agreed upon.

 

• Survey your in-house people

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Part of the evaluation is asking your executives and internal employees about their satisfaction with the work of your outsourced operations. The decision to cancel or extend the contract should only be finalized if the in-house stakeholders agreed to do so.

 

• Identify points of leverage

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Certain parts of your BPO deal can be variable and should therefore be adjusted with each renewal you sign. Labor fees, for one, can move according to changes in currency exchange and labor laws in your BPO partner s location or your headquarters. See if there are services that you can do without or if a campaign can be expanded to address booming consumer needs. Adjustments regarding prices and scope could easily be executed if you outsource to boutique-style firms that let you customize service packages unlike in bigger companies where solutions bundled are typically fixed.

There are many things you could do to prevent extra fees and poor performance in your outsourcing deal, but the key to getting the most out of your contract ultimately relies on time. Allow yourself a sufficient period of at least a year before the expiration to thoroughly conduct the evaluations and survey the parties involved. More than harnessing all the opportunities to leverage, making a move long before the BPO deal expires saves you from unpleasant surprises.

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