With the rise of offshore costs, how has O2 been affected?

We have definitely seen over the years the cost of our outsourcing increase offshore. With increasing wages and inflation we’ve had to look at alternatives, despite the Onshore/Offshore price differential.

Although not re-shoring by giving work back to the CSA, we have started to look at robotic automation instead. If we compare UK costs to offshoring costs it is around 1/3 of the price. If we then compare offshore costs to robotic automation it’s another 1/3 cheaper, it’s a route O2 is seriously exploring at the moment.

What other ways are O2 ensuring flexibility in the future and present in the current climate of rising economic costs?

We have seen falling revenue and increased costs, profitability has been falling and outsourcing is one of the ways we look to reduce costs. Our outsourcing relationships give us fantastic flexibility to flex resources both onshore and offshore and that will obviously continue. To ensure costs come down further we even have to reduce are outsourcing costs, through a mixture of robotic automation and process improvement – If we don’t have the failure contacts coming into the business in the first place then, and lower call volumes will also reduce costs significantly.

How is the impact of new technology affecting O2?

Other than the use of Robotic Automation, newer technologies such as the Cloud haven’t really affected O2’s Back Office too much. There are obviously parts of the wider O2 Business utilising newer technologies all the time, taking advantage of the cost saving and scalability that the cloud etc, but other that the Robotic resource now at my disposal the Back Office currently remains unchanged. I certainly see a space in the O2 Back Office for newer services such as “BPM as a Service” but at present this is just at a feasibility stage.

Do you feel that public perception is important to companies that outsource, and if so how can this be improved upon?

My personal opinion is that you have 2 public views. Onshore outsourcing which is seen as positive due to the number of jobs this creates, and then you have offshore outsourcing, which to the public is seen as a bit of a negative. Unfortunately in this day and age, I don’t think there is a way to get around an Onshore/Offshore mix and this does appear to be the norm. O2 has always had a commitment for Voice services to remain in the UK, both in house and through our outsource partners. Outsourcing contributes billions to the UK economy, it is seen as a necessary evil regardless of public perception as revenues fall in the mobile industry, outsourcing is one way we can decrease our costs.