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THE OUTSOURCING DECISION

Key factors to discuss at your sourcing strategy meeting.
Jay Minnucci

Jay Minnucci

Contact center outsourcing is multibillion-dollar business utilized by tens of thousands of organizations. Those numbers alone make it pretty clear just how viable this option is for those of us running contact centers. While some negative views persist here and there, today’s outsourcer is likely to have well-trained agents, a stable and effective management team, and comprehensive, up-todate technology.

Given all that, the odds are that you are either using an outsourcer or you have contemplated using one. The initial decision—to outsource or not to outsource—is a critical one. Hanging in the balance are the thousands of direct connections made between your organization and your most precious resource—your customer. With all that at stake, you want to make sure that you base your decision on the right factors.

The Temptation of Price
Way too often, the driving motivation behind outsourcing is price. Yes, there are many cases where outsourcing can offer an expense savings compared to using your own staff. Basing the decision on price, though, is a dangerous move that often backfires. Why? Because if price is the main (or only) driver, you’ll likely wind up choosing the option with the lowest price per hour, minute, agent or whatever cost basis is used. “Reducing costs at all costs” relegates qualitative factors to the backseat. Of course, it is those qualitative factors like high quality rates, engaged staff, a focus of first-contact resolution, etc., that will generate the most important long-term results.

The irony here is that a “price-first” focus not only puts quality in jeopardy, but it also will not necessarily equate to lowest overall cost. Remember, the billing equation is price multiplied by units. Poorly trained reps can turn a five-minute call into a nine-minute fiasco that not only causes customer satisfaction problems, but can make this more expensive than other options.

When it comes to price, a better approach is to leave this on the sideline and base your decision to outsource on other factors. If you achieve these main objectives and still manage to save a few dollars, view it as a nice little side benefit.

Great Reasons to Outsource
If cost savings are not a key factor in deciding whether or not to outsource, what should be at the forefront? Every organization is different, but the following reasons are those that should be in everyone’s sourcing strategy meeting:

BETTER LANGUAGE/CULTURAL MATCH
Some of the bigger, more public mistakes regarding outsourcing occurred when companies did not consider the importance of matching the culture of their customers with the location and culture of the outsourcing organization. If we are to be honest, though, we have to recognize that our internal contact centers may not be a cultural match for our entire customer base. Using an outsourcer to improve this match can be a great way to put a local feel on a global business.

OBTAIN A REAL POINT OF COMPARISON
Rather than trying to compare your performance to the many dubious benchmark options out there, why not get a real comparison point through outsourcing? Outsourcers can bring a fresh, external view to your work, and are not encumbered with the “that’s the way we have always done it” legacy of an internal center. With the experience an outsourcer has running programs for many clients in all sorts of industries, the better ones can inject new ideas into contact-handling routines.

STRENGTHEN DISASTER RECOVERY OPTIONS
Depending on your structure, outsourcing can offer a great way to plug some gaps in your disaster recovery plans. True, there are many other considerations that are required for a full DR plan, but outsourcing can enhance any program by offering one more pathway that is tested continuously.

SKILL MATCH ON LOWER VOLUME CALL TYPES
Many contact centers have lower volume call types with a skill requirement that simply does not match the rest of the organization. Whether the lower volume requires a higher or lower (or just a different) skillset, it can be disruptive to have a small number of people with radically different requirements and compensation expectations/ levels. In these cases, it may be better for everyone to utilize an outsourcer for these lower volume call types.

And a Few Reasons That May Not Make the Grade
Cost savings has already been mentioned as one of those factors that should not be a driver of the outsourcing decision. There are a few other factors that are often used but may work better on the sideline:

INVESTMENT AVOIDANCE
With cloud-based systems available all around us, the need to dip heavily into the capital budget has been dramatically reduced in recent years. There are times when an outsourcer might handle a specialized gap in technology for you, but if it is technology that everyone needs to improve contact-handling performance, it is better left to an internal approach that can put the improvements in front of everyone.

SPEED OF IMPLEMENTATION
The big caveat here is whether you have an internal center or not. If you do not, and you need one quickly, then this is a great reason to look at an outsourcer. But if you are simply looking to add a new program or handle an influx of new customers, the coordination required to set up the outsourcing arrangement is not likely going to be much quicker than handling it internally.

PEAK TRAFFIC HANDLING
Many clients knock on an outsourcer’s door because they simply cannot handle peak traffic. Then they handle what they can with internal resources and dynamically send the remainder to the outsourcer. Unless you are using an outsourcer’s pooled resources (agents handling contacts from a variety of clients), this will not likely work. There is no magic available to an outsourcer that allows them to efficiently handle work that all of a sudden arrives like a tsunami, then disappears for hours at a time. Peak traffic management is a challenge and an outsourcer can provide some help with it, but “we will handle whatever we can and just run the overflow to them” is an ineffective solution.

It’s Not an All-or-Nothing Choice
There was a time when outsourcing was seen as an “all-or-nothing” proposition—you either outsourced your entire center or you did not outsource at all. Fortunately, that time has passed. Outsourcing is a strategic decision, and for many of us the right strategy is to outsource some of our contact handling, but not all of it. If we focus on the right objectives when making the decision, we are far more likely to be satisfied with the result.

Jay Minnucci is Founder and President of the independent consulting firm Service Agility.

Reprinted with permission from Contact Center Pipeline, www.contactcenterpipeline.com


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