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Call Center Vendor Management and Virtual Due Diligence in the Age of COVID-19

The COVID-19 pandemic may have disrupted the business process outsourcing (BPO) industry, but it has not slowed down the need for clients to consider their outsourcing options, select new vendors or evaluate in-house vs. outsourced call centers. In fact, in some sectors, the demand to optimize service delivery has fueled new vendor searches.

There is no doubt that 2020 has been a turbulent year for the BPO industry. Pre-COVID “normal” call center operations suddenly shifted to new standards, including work-from-home, remote agent management and virtual collaboration, as well as on-premise workspace distancing, staggered shifts and hybrid work models. BPO vendor selection and vendor management processes amid such a challenging and constantly changing landscape must be infused with COVID-19 contingencies and processes.

To mitigate risk in such unpredictable times, rigorous vendor due diligence is paramount. Prior to the pandemic, in-person site visits have been integral to due diligence, vendor selection and vendor oversight. However, on-premise meetings at the vendor’s call center location are rare these days. Travel bans and other restrictions have forced clients and vendors to rely on virtual meetings and reviews.

While virtualized due diligence has become the new norm, at least for the foreseeable future, how will it impact the client-vendor relationship? Not all clients are comfortable with an entirely virtual approach to vendor selection and management. We must develop an effective formula and methodology for virtual vendor site visits, ongoing communication cadence and business reviews. There will be exceptions, of course — some clients still require on-premise call center agents and continue to conduct in-person, socially distanced, on-site due diligence visits.

New Vendor Selection without Visiting the Vendor

In our experience here at CustomerServ and pre-COVID-19, seldom has a client selected a vendor of ours without first visiting them in person. But we are operating in a virtual world now, so it is essential to adapt vendor due diligence best practices for a “contact-less” environment.

The following are some thoughts and recommendations to consider for BPO vendor selection and due diligence as we continue to navigate the dynamics of our current environment.

Set Realistic Pricing Expectations

The demand for work-at-home capacity is at an all-time industrywide, which is driving up work-at-home prices, as well. Prior to the pandemic, traditional work-at-home BPOs that did not operate physical sites would bid outsourcing contracts at 20%-30% less, on average, than on-premise BPOs. That delta has closed rapidly.

Unless a BPO is “buying your business” with below-market rates, expect work-at-home pricing to be in the same range or higher than on-premise rates in the U.S. and globally. Contrary to common perception, many BPOs still maintain physical sites and are still incurring operating costs for their facilities.

Industry-leading BPOs have invested heavily in work-at-home platforms and cloud architecture, and have beefed up their support staff. A competitive labor market has translated into increased staffing costs for recruiting, retention and higher compensation models. Most of the BPOs we know are hiring employees, not contractors, so the BPO is “absorbing” the hiring and onboarding costs for new agents instead of passing the cost to the agent like some work-at-home BPOs do.

Expand RFPs to Assess COVID-19 Risks

If you plan to issue a Request for Proposal (RFP), then it must include a complete vetting of the vendor’s state of readiness and response to COVID-19, along with standard operating practices and value-adds. RFP sections should include specific questions on the following processes, at a minimum:

  • Health and safety checks (if on-premise)
  • Agent recruiting
  • Staffing
  • Virtual and on-site training
  • Agent retention
  • Performance management
  • Customer experience
  • Client branding
  • Quality assurance
  • Frontline management depth
  • Technology
  • AI-enabled tools
  • Data Security
  • Compliance
  • Business continuity

Review Virtual Training Processes and Effectiveness

One of the top pain points for vendors right now is virtualized training, especially for new-hire classes. Across the industry, we have been seeing mixed reviews of the effectiveness of virtual training. There is simply no substitute for in-person curriculum delivery. Some of our vendors require new agents to attend in-person training, followed by close monitoring while working at home. The agent is then brought back on site for any retraining.

Vendors should demonstrate their virtual training process and knowledge management system, along with providing case studies showing the training’s effectiveness and impacts to performance, customer satisfaction, Net Promoter Score (NPS) and other metrics.

Conduct a Financial Health Check

The COVID-19 pandemic has had varying degrees of impact to BPOs. Some vendors managed the seismic shifts to the industry well and will emerge from 2020 stronger; others did not react as swiftly, plan as effectively or execute contingency plans as flawlessly as their competitors. While some vendors have lost clients or are simply stagnating, other BPOs are expanding, finding new opportunities and becoming more efficient. As part of your due diligence, ask to review the vendor’s financials to confirm that the BPO has enough liquidity to weather any stormy months ahead.

Pre-Vetting Is Still Essential

Under normal circumstances, the on-site call center location visit usually takes place after the vendor proposals and RFPs are submitted and the client has short-listed finalists for further review. Nothing much should change in your process roadmap because of COVID. Narrow the list of prospective vendors by focusing on the most qualified BPOs that match your needs and align with your culture. Then select the vendors that will advance to the next phase: the virtual site or operations tour.

Review Compliance and Data Security Standards

Review and approve all required compliance and data security documentation, including PCI certification. If your organization requires a clean-desk policy for call center agents, or if your agents handle customer data or credit card payments, then your compliance team must complete a risk analysis of data security and PCI standards for work-at-home agents. Vendors must provide information about their data security program, network architecture and PCI DSS compliance status. Look for specific protocols that apply in a work-at-home environment, such as ongoing training on data security policies and procedures, secure equipment (hardware and software) that restricts access to sensitive customer data, and protocols for securing agents’ systems in the work-at-home environment.

Request an Updated Business Continuity Plan (BCP)

We don’t know of a single BPO that had a “pandemic section” in their pre-COVID BCP. A failure of imagination? Probably. BPOs should rewrite or add a “pandemic plan” to their BCP that clearly addresses any disruptions that may impact or limit the vendor’s ability to service the client — for instance, travel bans, site closures, staffing plans, data security, etc. The plan should also identify “essential” employees, such as key leadership and management staff and their roles in maintaining the operation and the recovery process. The BPO should test the updated BCP annually.

Take a Virtual Site Tour

Video site tours are nothing new — some BPOs provided this option long before COVID. But since March, our industry has adopted virtual due diligence as a standard practice. Forward-thinking vendors have developed innovative virtual site visit technology and processes that “walk” the client through their virtual and/or on-premise operation using prerecorded and live video tours.

We recommend including one of the BPO’s on-premise sites in your virtual tour, if possible. Many BPOs are still operating physical sites at limited capacity, and being able to tour a physical space virtually can help you better understand how the BPO defines its on-premise vs. virtual best practices and service delivery.

Conduct Virtual Q&As with Key Roles

A virtual vendor interview is an essential step for clients seeking new vendors or vetting existing vendors in the age of COVID-19. The advantage to a virtual interview is there is no need to coordinate travel schedules, and all key players and stakeholders from both sides can meet over video platforms.

Consider conducting virtual Q&As early in the RFP process. As part of the vendor review process, these Q&A sessions will enable you to meet one-on-one with the vendor’s C-level all the way to frontline management, team leads, supervisors and other personnel.

Get the Real Scoop with Virtual Agent Focus Groups

The agent focus group has always been an essential step in the vendor due diligence process — and it still should be. Holding a virtual focus group of “random” agents separate from management will help you get the “real scoop” on the vendor’s operation. Questions to ask during a virtual agent focus group include:

  • How long has the agent worked at the company?
  • What do they like/dislike? How often do they hear from their supervisor, and how (e.g., video, text, email)?
  • How often do they hear from senior management, including the CEO?
  • How did they feel about the training they received? Do they see themselves working here in six months?

Management focus groups can be insightful, as well. You can test the BPO’s work-at-home communication and agent collaboration tools while conducting virtual focus groups.

Were On-Premise Visits Really Necessary?

This question will stir up a lot of debate, for sure. Let me first acknowledge that there is a tremendous benefit to being on-site with your outsourcing vendor or your internal sites. On-premise site visits and drop-ins provide an opportunity to reinforce your message and enable in-person collaboration. However, once the vendor is selected, do you really need to be regularly on-site to oversee the operation? If your evaluation team has selected the right call center BPO partner, then your constant presence should not be necessary.

In pre-COVID days, many of my colleagues on the client side were frequently jetting off all over the world to “visit” their vendors and greet their teams. (Think of the travel costs, lost production time, time away from home, etc.) Many of these colleagues would complain to me that performance dips once they leave the vendor’s site. My view is that if your vendor or internal site requires constant on-site hand-holding, then it’s time to reevaluate the operation.

Virtualization Is Here to Stay So Pick Your Vendor Carefully

Today, more than ever before, it is crucial to select the right vendor for your outsourcing needs. Clients no longer have the ability or the need to meet their vendors face-to-face or to send vendor managers on-site. Virtualization of the client-vendor relationship calls for complete transparency, accountability and open communication. Therefore, the vendors you choose must be the industry leaders, not the laggards, when it comes to service delivery in the age of COVID-19.

The virtual call center world has some limitations, but also many advantages. Selecting vendors virtually can shorten the client’s speed-to-market timeline for onboarding new BPOs. All BPOs should be on notice: If you wish to keep your client relationships in good standing, the phrase “because of COVID” is no longer an excuse for staffing, performance or service delivery issues.


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