For many years, analysts would rank the financial prospects of professional service companies based on the number of employees. Look back at old stories about IBM, TCS, or any big tech company and you will see that if the company was hiring more software engineers, their revenue was increasing.
This direct connection between headcount and corporate performance has long been the conventional wisdom about how well a business process outsourcing (BPO) company is doing. If you have more people in a contact centre then you are charging clients for more FTEs (full-time equivalents) and so the company is earning more.
Many customer experience (CX) companies have spent years telling the world how many people are employed in their contact centres because this has always been a proxy measurement. More people equals more success.
But CX has changed – and many industry commenters are starting to notice. I have recently read some thoughtful perspectives on the state of our industry as we approach the 2030s and several have struck a chord. A new reality is emerging.
Scale is powerful, but scale alone is not leadership.
Being the biggest has never automatically meant being the best, but the connection between the size of a labour pool and the value of a service being delivered is separating.
Look at Victor Manzanera asking ‘who actually delivers’ rather than ‘who’s the biggest supplier?’ Or Amanda Quinn asking why BPOs are working harder than ever, but also growing slower than ever? The Betr Insights newsletter recently asked why there is a disconnect between value and cost in BPOs today?
All these commentators are highlighting a difficult truth for everyone in CX.
Size used to mean strength. Your global footprint, the thousands of clients, the hundreds of thousands of employees, and market share dominance. This was how we always defined success.
In some cases, these measurements still count. Clients still need reach, resilience, and operational depth.
But there is a big difference. Clients today want to buy outcomes, not scale. This is an irreversible change in how CX is structured.
Companies buying services from a CX partner now want value creation they can see and measure. They want to see innovation that is continuously explored. They want a partner who understands their industry and can grow and evolve as the business changes. They also want contracts that are focused on creating impact – not effort.
Above all, they want to feel like their business really matters. Not that they are working with a BPO that only really cares about the top 20 accounts. All clients should be treated as important.
All of them.
One of the quiet risks of extreme scale in a service industry is distance: Distance from your clients. Distance from frontline reality. Distance from urgency.
When a business becomes extremely large, then attention naturally goes toward the biggest revenues, the most prestigious clients, and the most complex global deals. This is natural and understandable, but it can lead to a hierarchy of client care where some of them experience a wave of innovation and executive focus – others receive the service they wanted, but very limited evolution.
This isn’t possible to support in the current business environment.
Excellence is no longer defined by how well you are running operations, it is how well you consistently keep improving them.
Clients now expect their CX partner to proactively identify value opportunities, bring new ideas to the table without being asked, link CX to revenue and loyalty outcomes, modernise journeys continuously, refresh operating models regularly, evolve commercials toward performance and results
All this is now table stakes. You don’t get innovation and new ideas because you are a big client – these are now basic expectations regardless of size.
This is not just my opinion. Look at research by groups such as Execs in the Know. Their research suggests that the reliance on FTE-based models is projected to drop from 42% to 28%, while outcome-based models are expected to nearly double from 20% to 39% in the next three years. There is also significant evidence that B2B buyers are looking at the ability of BPOs to innovate and transform services from day one.
The future leaders in BPO and CX will not necessarily be those who have the biggest global footprint and the most employees today.
They will be the companies who stay closest to clients. They will be partners who respect all client relationships, not just the big ones. They will be partners who continuously explore innovation and new ideas. They will be able to demonstrate value and will not allow the size of a contract to dilute the attention they give to a client.
These expectations apply to in-house CX teams just as much as they do to a global or regional BPO. There is a new set of expectations around how CX needs to be designed and managed.
The reality is that client expectations have evolved – especially given the wave of change in business operations and technology advancement since the pandemic.
Leadership in BPO must evolve with them.
The next chapter of CX leadership will belong to providers who combine strong capability with closeness, scale with sensitivity, and global reach with local accountability.
Because in the end, clients don’t remember who was the biggest BPO. They just remember who moved their business forward.
CC Photo by Wolfgang Hasselmann