This week, I was onsite at the 25th annual Shared Services & Outsourcing Week Europe. Located in sunny Estoril, Portugal, the conference covered all things GBS, from building GBS foundations to hot topics such as Agentic AI.
A session that particularly stood out to me was The Outsourcing Customers' Panel: The Good, the Bad, and the Unexpected of Working with BPOs, where industry experts shared their lived experiences with BPO providers.
Moderated by Richard Williams from Mars Global Services, Jan Nikus (VP, Head of KONE Business Services) and Sebastian Frey (Managing Director, Kärcher Global Services) shared insights about what they wish they’d known before diving in.
1.Outsourcing Doesn’t Just “Eliminate” Work
Sebastian recalled his BPO journey beginning over a decade ago with the ambition to cut costs via offshored finance operations. However, leveraging a BPO partner is far from simply handing off responsibilities. Instead, later in the discussion, Sebastian highlighted the importance of refining operational details when beginning the BPO journey, from setting up SOPs to defining escalation pathways.
Jan echoed this, admitting he underestimated the internal capability building required.
“In my mind, I wanted to outsource capabilities, so I didn’t want to build them […] but in the beginning, just organizing invoices was like a full-time job for the first six months!”
Lesson: Don’t just offload operations, reshape them.
2. You Can’t Substitute Leadership with Outsourcing
Building on from lesson one, Jan emphasized:
“You cannot just put money on a problem and expect it to disappear.”
So, it is important to remember that leadership is not something a BPO can replace, it needs to grow alongside the partnership.
It is well understood that BPOs bring access to talent and specialized capabilities, but aligning those capabilities with your strategy takes intentional leadership. Jan emphasized this point by noting how their first BPO contract, based on FTEs, lacked flexibility and clarity. Today, their model is KPI-driven, with user experience as a core metric.
Lesson: You don’t outsource leadership.
3. You Need to Proactively Bridge Culture Clashes
Both Jan and Sebastian agreed that managing cultural differences is a key element of a successful BPO partnership. From decision-making styles to communication norms, the cultural distance between teams, especially across continents, can widen if left unchecked.
Both organizations tackled this head-on. Kärcher invested in cultural mapping and cross-training, even bringing in experts to help German teams understand Indian business culture. Sebastian noted:
“We built up a spirit of “this is one team.””
KONE, meanwhile, ensured shared visibility, with 90-95% of meeting topics being shared with their BPO partners. They also leveraged a one-stop shop to align all employees:
“[…] So we appear as one team, one service, one solution.”
Lesson: You must build a shared culture, or your teams will drift apart.
4. Outsourcing Can Test Your Agility & Resilience
Sebastian noted that switching BPO providers or even changing internal expectations, can be a rocky road. This is especially true in the digital age, as technological implementations can make a change in direction even more difficult. Sebastian warned:
“You will underestimate the transition.”
So, organizations beginning their outsourcing journey need to be prepared for some turbulence, but by remaining agile and transparent, these challenges can be managed.
Lesson: It’s not just a process change; it’s an organizational shift.
5. Scale is a Part of Outsourcing, But So Are Surprises
Despite the challenges, both leaders agree that BPOs offer rapid capability building and scalability that are hard to match internally. Sebastian praised the agility BPOs provide in quickly plugging resource gaps, especially for a medium-sized GBS looking to scale.
But the path to those benefits is rarely straightforward. For example, although Jan noted a 45–50% improvement in cost efficiency, scaling beyond that remains a challenge. Then, both panelists concluded the session with a concise response to the bad parts of BPO:
“Inherent distance… High attrition… the unknown.”
Lesson: BPOs deliver value, but it’s not as simple as plug-and-play.
In the world of GBS, partnering with a BPO isn’t a silver bullet, it’s a strategic decision that requires adaptability and leadership. As the panel made clear, the journey is as much about internal transformation as external support.