Business process outsourcing (BPO) has a long and exciting history that dates back decades when businesses started exploring ways to outsource peripheral activities to other companies who could do it cheaper.
While many still associate BPOs with setting up call centers in other countries like India and the Philippines, today, the landscape is evolving. More companies across the globe seek to take advantage of the miracles of the internet and digital technology and are outsourcing even essential activities to previously unexplored regions for better efficiency.
In this interview, Simone Bartlett and Orinola Gbadebo-Smith, co-founders of Hugo Technologies, discuss the evolution of BPO and Africa’s pivotal role in the evolving industry. Hugo is described as a remote work and outsourcing company, solving the most complex and pressing operational challenges for global businesses using highly-skilled talent from diverse black communities.
How would you define business process outsourcing (BPO) today, and how do you see it evolving in the immediate future?
The fundamentals of business process outsourcing haven’t changed much– companies subcontract business operations to third parties in place of in-house teams. But gone are the days when BPO was relegated to only basic front-line support (e.g, call centers) or simple back-office operations (e.g, data entry). Companies today outsource everything from sales and marketing, to accounting, finance, and much more.
This shift from basic to complex operations outsourcing is being driven and will continue to be driven by technology. As tech exerts a greater impact on the traditional (in forcing it digital), BPO will continue to evolve to absorb more complex and nuanced tasks like building artificial intelligence applications, developing technology platforms, and shaping customer experiences.
How would you describe Hugo’s place in today’s global business climate, and what role do you see Hugo playing in the future you have described in Q1?
Hugo is a challenger in today’s global business climate for several reasons. We’re a new brand in a mature industry with many veteran incumbents; we operate in nascent geography for BPO; and we’re harnessing an incredibly able, motivated, and cost-effective talent pool to redefine what it means to be a BPO partner. We do all of this leveraging the latest technology and processes and this makes us well-equipped to tackle increasingly complex and nuanced projects.
Hugo taps into talent from Africa. Do you think Africa is considered top on the list of regions for business process outsourcing, and can the continent soon become the go-to destination for outsourcing globally?
Africa is definitely not at the top of the list as there’s still a meaningful branding or perception gap globally, where the continent is concerned. Global market participants don’t look here for exceptional talent or to solve problems, simply given the history. Truth be told, despite the evolution of Africa (the brand) from a continent known for misfortune and dependency, to an unexpected hotbed for creativity, music, culture, and tech talent, it’s still an uphill battle to change the perception about the creation potential of the continent.
However, as more corporations look to diversify their operational, outsourced, and business risk away from traditional outsourcing geographies – India, Philippines, Eastern Europe – Africa continues to be the most promising final destination.
What, in your experience, are Africa’s advantages over other regions for BPO?
As a continent, Africa’s talent-quality, talent-density, talent-readiness, and talent-relevance are unparalleled. Wherever the confluence of strong education systems, high unemployment, minimal social safety nets, and low competition for talent exists, you will find a talent reservoir that is incredibly able, motivated, and cost-effective – the dream for any corporation looking to outsource globally. And when compared to traditional outsourcing geographies – India, Philippines, Eastern Europe – that are mature, saturated, and incumbent, the motivated challenger geography will always outperform. For international companies and all of our clients, this translates to service outcomes that are even as good, if not better, than in-house talent but at a fraction of the cost.
Are particular countries on the continent the most ideal for BPO?
When it comes to BPO, there are a few things to consider when choosing a location: quality of the talent pool, language capabilities, infrastructure, political stability and time zones. Countries like South Africa, Nigeria, Ghana, Senegal, Morocco, and Kenya, lend themselves well to all 5 considerations.
Do you think global corporations have a good sense of the outsourcing opportunities in Africa? If not, what are they missing?
There’s still a lot of education to be done around the potential in Africa. Many global corporations underestimate the sheer quality of our talent pool due to its lack of adequate training, especially in soft skills, and in doing so, overlook Africa as a solution for the increasingly complex problems they have to solve.
Frankly, what these corporations are missing is us- or companies like Hugo – that are on the ground, doing the work to upskill and manage this talent pool to deliver better service outcomes than the BPO norm.
From your perspective as a BPO service provider, what business sectors are most suited to outsourcing in Africa?
Given our large youth, tech-savvy population, multilingual capabilities, and friendly time zones, Africa is primed for a wide variety of business sectors like technology, artificial intelligence, retail, eCommerce, hospitality, entertainment, and health.
What would you consider identified risks for businesses looking to Africa for their BPO needs? Evaluated against other regions, are the risks, if any, worth it for global corporations?
At base level, Africa can be a difficult place to do business. Many countries operate under fragile political stability and governments don’t offer an enabling business environment which makes it difficult to navigate if you are not from or of the continent.
In addition, there is a tremendous talent pool here but sourcing the right kinds of talent (the diamonds in the rough), within countries with adequate IT infrastructure and internet penetration, requires significant know-how and expertise that many global corporations simply don’t have the time or resources to build.
However, the above risks are minimal when compared to the benefits especially when one has the right BPO partner. For example at Hugo, we’re built to adapt to the shifting business landscape of Africa, with rigorous recruitment and training capabilities that help us surface only the best and brightest talent. We do all of this in regions with the most stable political climates and where the internet penetration is best in class (e.g Nigeria, Kenya, South Africa, and Senegal).
How would you say the COVID-19 pandemic and the increased remote work have influenced BPO on the continent?
Though wholly destructive, the pandemic was a powerful agent for the BPO industry on the continent on two counts. First, it made remote and distributed teams or work mainstream. And given outsourcing is a form of distance work, more companies have been willing to consider outsourcing for the first time.
Second, it accelerated the need for corporations to diversify beyond traditional outsourcing and talent markets. Given that most BPOs in traditional markets were not built to deliver services in a ‘work-from-home’ format, most struggled with service disruptions and material drops in the service quality becoming the norm as the world shut down. Combine this with dramatic drops in the revenues of corporations and their need to cut costs, companies had to look towards outsourcing partners that could deliver on a work-from-home model, at a better cost and Africa became the go-to destination.
Post-pandemic, though the distribution between ‘work-from-home’ and ‘contact center’ delivery formats is rebalancing, the drive for geographic diversification and better quality at a lower cost remains and so does Africa’s relevance in this space.