| The buzz is all about customer service and call center | | | | Outsourcing to low wage countries like India is bringing |
| outsourcing, also known as BPO (Business Process | | | | extra financial benefits into the equation (but also some |
| Outsourcing). According to Gartner, the outsourcing | | | | pitfalls, as you'll see later!). The different work moral is |
| market in Europe has grown with over 6%, BPO with | | | | also often viewed as a benefit. For example, in India, |
| 10%. The market for offshore outsourcing (to low | | | | workers are very disciplined, and organizing a 24/7 |
| wage countries) is growing with a whopping 40% this | | | | service is easier than in Western countries. |
| year! However, the subject of outsourcing is not | | | | Outsourcing Pitfalls |
| without controversy. So what's it all about? | | | | Outsourcing projects often fail on unclear expectations |
| In the 90s, growth was the motto for organizations. | | | | at both the customer and service provider. When |
| Eat, or be eaten. Through the continual increase of | | | | considering outsourcing make sure you yourself have |
| stock value this could be easily financed. As a result, | | | | a clear image of what the level of service is that you |
| businesses were acquiring activities that are, on the | | | | are expecting. Be as specific as you possibly can. Pick |
| surface anyway, only loosely related to the original | | | | out the elements that are most important to you and |
| business goals, and to each other. The demise of | | | | think about how this would best be managed. |
| world economy and the burst of the Internet bubble | | | | Measurable performance indicators are better. |
| changed all that. | | | | Remember that outsourcing is a game of trust as well |
| In these days of tight budgets and heightened attention | | | | as money. If, when negotiating service levels, you feel |
| on ROI (Return on Investment) and TCO (Total Cost | | | | that you have to stamp out every eventuality in a |
| of Ownership), companies are taking a good look at | | | | contract, I'd advice against outsourcing. I would, |
| what they are in business for, and what they are best | | | | however, put an opt-out into the contract, in case trust |
| in. This focus on the core business has lead to the | | | | is lost between the outsourcing partners. Believe me, |
| selling of complete branches of companies. Now, | | | | no partner would want to get stuck in a contract |
| businesses go even further by taking a look inward, in | | | | between two distrusting partners. For the rest, focus |
| search of generic processes to outsource. Finance, | | | | on measurable Key Performance Indicators (KPI's) and |
| Human Resource and Customer Service are now the | | | | a clear payment scheme to protect your bottom line. |
| focus of outsourcing, which was more or less the | | | | Anxiety for outsourcing is often fed through the loss of |
| playground for IT support in recent years. | | | | operational control. Remember, you no longer handpick |
| Outsourcing, the utilization of resources outside an | | | | customer service personnel, and you are much more |
| organization, is not a new thing. Barter trading, the | | | | limited in directing the service. Also, you may have to fit |
| oldest form of trading, was in fact just that. One | | | | in the standard approach of the service provider. But |
| person traded a skill (or a product made through that | | | | the trade-off for the loss of operational control is more |
| skill) to get access to another person's abilities. In the | | | | managerial control. But this trade-off only happens if |
| old days, it made perfect sense to let an activity be | | | | you negotiate your service levels properly, as |
| done by the person most skilled. And old becomes | | | | mentioned earlier. |
| new, as they say. | | | | And then off shoring... With the advent of off shoring, a |
| Benefits of Call Center Outsourcing | | | | lot of vendors are now operating the market. But if |
| It makes sense that a company who's core business it | | | | you're selecting a partner, don't rely on the reputation |
| is to organize and execute a call center, is more likely | | | | of the vendor alone, but do make sure that you deal |
| to do a better job at it (although that's not a given)! It's | | | | with the people who will be managing your service. |
| like hiring someone to put a floorboard in your house. | | | | Take special attention to the level of experience of |
| You may be able to do a decent job yourself, but they | | | | these people. |
| are a lot quicker at it! So efficiency is a clear benefit. | | | | The cultural differences can be enormous, especially |
| Being in the call center business, call center service | | | | when outsourcing to India. Don't make assumptions, but |
| providers are more likely to be able to hire skilled and | | | | be very specific in your business needs. And India, |
| experienced personnel. And, since a service provider | | | | although the buzz is all about it, is not the only low |
| (usually) services more than one company, there is | | | | wage country in the world! You could consider |
| more support personnel to go around. This helps | | | | outsourcing to low wage countries that are not so far |
| continuity, as your service isn't jeopardized if an | | | | away, for instance Spain or Mexico. |
| employee decides to leave. Also, since the customer | | | | Another element to take into account is this: if your |
| service reps are probably working for more than just | | | | business is adding only minimal value or profit to the |
| your company, you can benefit of lessons learned | | | | service provider, you risk receiving substandard |
| from other contracts. | | | | service levels. If this is the case, it's probably safer to |
| Ah, didn't I mention the money? The #1 reason for | | | | steer clear of off shoring. |
| outsourcing is, of course, to lower costs. Outsourcing | | | | Conclusion |
| companies can have lower rates because of the | | | | Looking at both the benefits and pitfalls of outsourcing |
| greater efficiency, but also through economies of | | | | call centers and customer service, it is clear that there |
| scale, which actually means that fewer personnel is | | | | are clear opportunities for reducing the level of costs |
| needed for servicing the combined contracts than | | | | for organizations. However, do not downplay the risks. |
| when each company would organize it themselves. | | | | If an organization is inexperienced in managing |
| Plus, they can easier mix more junior and senior staff, | | | | customer service, the risks for failing are very real, as |
| which is a near to impossible feat if you have just two | | | | tight management and KPI evaluation is very important. |
| customer service reps! | | | | But in the end, it's all a matter of trust. Ask yourself: do |
| The money question is getting even more interesting if | | | | I trust a partner, this partner, with a piece of my |
| we take the possibility of off shoring into account. | | | | business? |