Creative contracting models beyond FTE in the digital era

As brands transform and move to an increasingly digitally led customer experience fueled by their customers’ demands for more effective self-service channels, it’s no surprise that they’re also changing what they require from their outsourcing partners: technology and analytics-based transformation with increased ROI and CSAT.

HGS’s Chris DeLambo, SVP Business Development & Channel Partnerships, and Parikshit Kalra, SVP, Head of Client Solutions & Capabilities, recently led an interactive Executives in the Know CRS Virtual Coffee Talk conversation focused on contracting with an outsourcing partner in innovative ways, including options such as:

  • Payment in Common Stock
  • Total Cost of Ownership Models
  • Eliminating Barriers to Entry
  • Outcome-Based Pricing
  • Risk-Free Proof of Concept
  • Asset Acquisition
  • Self-Funding Self-Service/Agent-Assist Bot
  • Gainshare Models

During the discussion, survey respondents indicated highest interest in a Self-Funding, Self-Service/Agent-Assist Bot, with which a large consumer electronics company has realized great success. Some highlights of the client story include:

  • 97% of customer inquiries are resolved online with no agent interaction
  • ~70% reduction on total operation cost
  • 20,000 fewer calls a month
  • 477 seconds AHT, down from 632
  • 37% decrease in operational and IT resources
  • And, in 2018, Contact Center World ranked HGS as #1 for Best Use of Self-Service Technology after we presented our solution at the world-renowned Consumer Electronics Show in Las Vegas.

The primary concern around self-service bots is whether they will perform tasks as well as a live agent. Based on this client examples and others, HGS is confident they will.

“We design, engineer, manage, and improve the bots, and we demonstrate the impact on self-help call deflection, reduced AHT, and increased resolve rates,” Chris explained. “Once the expected results appear, we bill the bot at 50% of human labor rates.”

Another popular contract option discussed was Risk-Free Proof of Concept. In this scenario, a partner deploys a pilot of a new site, geography, or technology, and the client signs a long-term contract upon success of the pilot.

As an example, at the outset of the pandemic, the BPO partner of a company with brick-and-mortar agents was struggling with its customer service queue and was unable to transition agents to work at home.

The proven HGS Work@Home team customized a solution that included:

  • Implementing and integrating cloud telephony with the client’s CRM
  • Training 25 employees remotely in April of 2020 during peak lockdown
  • Completing an MSA and SOW in 27 days

“We trained agents who had never worked from home,” PK said. “The client was so impressed with our speed and performance that they extended the Champion-Challenger three-month pilot to a three-year contract.”

The third hot topic was Outcome-Based Pricing. These contracts can be fashioned as “pay for one type of result” (for example, a resolved call), or as a “hybrid,” which could be a pay base rate with a reward/risk component for exceeding KPIs such as First Call Resolution, satisfaction scores, or cancellations per call.

Creating contracts for the digital era requires transformation, which necessitates BPO experience, brand sponsorship, and commitment across the organization. Transformation is a “heavy lift,” but when well executed with an experienced partner, a brand will see great value and outcomes for its employees and customers.

Interested in adopting a non-traditional contracting model? Contact Chris or PK today for additional details.