English Language and the Future of Outsourcing

Outsourcing, where companies send everything from discrete tasks to entire business processes to outside suppliers, has been a global business trend since the late 1990s, facilitated by information networks and liberalization of the global financial system. At first, outsourcing was about saving costs by moving work to offshore markets with lower wages. But in the past decade as the wage gap between developed and emerging markets has narrowed, outsourcers are increasingly competing on business value rather than cost, moving from traditional areas like call center and data center management to professional services and end-to-end solutions. As outsourcing continues to climb the value chain, the ability of clients and vendors to communicate effectively affects both the cost and the overall success of every engagement.

Industry analysts surveying the outsourcing landscape for 2017 and beyond have noted these major trends:

  • Call Centers continue their evolution into contact centers. Inbound and outbound call centers were one of the first functions to be outsourced, as the processes could be tightly managed with scripts and software. Now, call centers are evolving into “contact centers” that provide much deeper interaction with customers, not only handling complex technical support inquiries, but often playing a key part in the sales and customer relationship lifecycle. To succeed in this arena, every call center worker needs the ability to engage spontaneously and authentically with customers in a common language – often English.BPO is moving away from traditional IT services. Business process outsourcing (BPO), especially in the IT segment that accounts for more than 60% of all outsourcing worldwide, originally centered on discrete workloads such as the development and maintenance of custom applications, or data center administration. With the rise of cloud computing and the shift in economics around data center management, BPO vendors are now focused more on managed services at a more strategic level, and advanced IT areas like data science and machine learning. That means clients and vendors are working more collaboratively, at a higher level and greater depth, placing a premium on communication skills in informal, improvisational settings.

    Range of outsourced services is growing. Outsourcing is moving beyond traditional structured tasks like call centers, IT and BPO, with a new generation of vendors worldwide competing in professional arenas including law, medicine, scientific research, accounting, marketing, architecture and creative services. These areas require exchange of high-level knowledge, not just technical detail. Clients rely on vendors to understand nuanced complexities of language, discern meaning from general directions, and be fully proficient in both the conversational and technical vocabularies specific to the profession.

    Customers are seeking strategic expertise from suppliers. Customers are increasingly open to more broad-based consultative relationship with vendors. “Service providers are being given more leeway to find savings and improvement opportunities within the client operation,” says Bill Fowler, principal consultant, Compass Management Consulting. To convey that expertise, and impart the trust necessary to sustain the relationship, both sides need to be able to communicate confidently on business topics in a common language.

The value of Business English in the outsourcing economy. When outsourcing was restricted to rote, low-skill and low-value tasks or highly technical engineering, most of the workforce could get away with rudimentary English or communication in their native language, although in some cases, poor communication resulted in errors, management issues and failed engagements. Today, that margin for error is gone. Customers have a wider range of outsourcing options from a greater number of countries around the world, and those looking for higher value services are unlikely to consider vendors who do not present as fully professional and communicative at the highest level.

The demand for English skills has pushed wage pressures upwards. A 2014 study by the ICEF Monitor found that Indians who speak English fluently earn up to 34% more than those who don’t speak the language, and even a basic degree of competency translated to a 13% wage premium. In the Philippines, with its legacy of American influence, English language skills have helped the BPO sector overtake India as the largest call center hub in the world.

Latin America is also emerging as a hub for outsourcing, given the overlapping time zone with prospective customers in the US and Canada. Globant, a technology services company based in Argentina, has effectively leveraged the talent pool across South America to deliver a range of increasingly strategic services to top enterprise customers, evolving from an outsourcing provider to a high-level business, creative and consulting partner. Globant requires English language proficiency and uses the GlobalEnglish program to ensure that every member of its worldwide workforce is able to communicate professionally with customers.

Continued momentum. The shift in the economic basis of outsourcing away from global wage and price differentials and toward an affirmative conception of value indicates that the model will likely persist and expand despite increasingly nationalist government policies toward trade and immigration.

Outsourcers need to upskill their organizations to take advantage of these trends to better serve their customers. But that is equally true of companies seeking to realize the benefits of outsourcing, and need to be able to communicate their complex requirements to English-speaking providers.

For more information about developing cost-effective, results-oriented solutions to empower your organization to leverage the value of English in outsourcing relationships, click here.

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