Outsourcing - BPO
Customer Service and Call Center Outsourcing, What's The Buzz?
The buzz is all about customer service and call center outsourcing,
also known as BPO (Business Process Outsourcing). According to
Gartner, the outsourcing market in Europe has grown with over
6%, BPO with 10%. The market for offshore outsourcing (to low
wage countries) is growing with a whopping 40% this year! However,
the subject of outsourcing is not without controversy. So what's
it all about?
In the 90s, growth was the motto for organizations. Eat, or be
eaten. Through the continual increase of stock value this could
be easily financed. As a result, businesses were acquiring activities
that are, on the surface anyway, only loosely related to the original
business goals, and to each other. The demise of world economy
and the burst of the Internet bubble changed all that.
In these days of tight budgets and heightened attention on ROI
(Return on Investment) and TCO (Total Cost of Ownership), companies
are taking a good look at what they are in business for, and what
they are best in. This focus on the core business has lead to
the selling of complete branches of companies. Now, businesses
go even further by taking a look inward, in search of generic
processes to outsource. Finance, Human Resource and Customer Service
are now the focus of outsourcing, which was more or less the playground
for IT support in recent years.
Outsourcing, the utilization of resources outside an organization,
is not a new thing. Barter trading, the oldest form of trading,
was in fact just that. One person traded a skill (or a product
made through that skill) to get access to another person's abilities.
In the old days, it made perfect sense to let an activity be done
by the person most skilled. And old becomes new, as they say.
Benefits of Call Center Outsourcing
It makes sense that a company who's core business it is to organize
and execute a call center, is more likely to do a better job at
it (although that's not a given)! It's like hiring someone to
put a floorboard in your house. You may be able to do a decent
job yourself, but they are a lot quicker at it! So efficiency
is a clear benefit.
Being in the call center business, call center service providers
are more likely to be able to hire skilled and experienced personnel.
And, since a service provider (usually) services more than one
company, there is more support personnel to go around. This helps
continuity, as your service isn't jeopardized if an employee decides
to leave. Also, since the customer service reps are probably working
for more than just your company, you can benefit of lessons learned
from other contracts.
Ah, didn't I mention the money? The #1 reason for outsourcing
is, of course, to lower costs. Outsourcing companies can have
lower rates because of the greater efficiency, but also through
economies of scale, which actually means that fewer personnel
is needed for servicing the combined contracts than when each
company would organize it themselves. Plus, they can easier mix
more junior and senior staff, which is a near to impossible feat
if you have just two customer service reps!
The money question is getting even more interesting if we take
the possibility of off shoring into account. Outsourcing to low
wage countries like India is bringing extra financial benefits
into the equation (but also some pitfalls, as you'll see later!).
The different work moral is also often viewed as a benefit. For
example, in India, workers are very disciplined, and organizing
a 24/7 service is easier than in Western countries.
Outsourcing Pitfalls
Outsourcing projects often fail on unclear expectations at both
the customer and service provider. When considering outsourcing
make sure you yourself have a clear image of what the level of
service is that you are expecting. Be as specific as you possibly
can. Pick out the elements that are most important to you and
think about how this would best be managed. Measurable performance
indicators are better.
Remember that outsourcing is a game of trust as well as money.
If, when negotiating service levels, you feel that you have to
stamp out every eventuality in a contract, I'd advice against
outsourcing. I would, however, put an opt-out into the contract,
in case trust is lost between the outsourcing partners. Believe
me, no partner would want to get stuck in a contract between two
distrusting partners. For the rest, focus on measurable Key Performance
Indicators (KPI's) and a clear payment scheme to protect your
bottom line.
Anxiety for outsourcing is often fed through the loss of operational
control. Remember, you no longer handpick customer service personnel,
and you are much more limited in directing the service. Also,
you may have to fit in the standard approach of the service provider.
But the trade-off for the loss of operational control is more
managerial control. But this trade-off only happens if you negotiate
your service levels properly, as mentioned earlier.
And then off shoring... With the advent of off shoring, a lot
of vendors are now operating the market. But if you're selecting
a partner, don’t rely on the reputation of the vendor alone,
but do make sure that you deal with the people who will be managing
your service. Take special attention to the level of experience
of these people.
The cultural differences can be enormous, especially when outsourcing
to India. Don't make assumptions, but be very specific in your
business needs. And India, although the buzz is all about it,
is not the only low wage country in the world! You could consider
outsourcing to low wage countries that are not so far away, for
instance Spain or Mexico.
Another element to take into account is this: if your business
is adding only minimal value or profit to the service provider,
you risk receiving substandard service levels. If this is the
case, it's probably safer to steer clear of off shoring.
Conclusion
Looking at both the benefits and pitfalls of outsourcing call
centers and customer service, it is clear that there are clear
opportunities for reducing the level of costs for organizations.
However, do not downplay the risks. If an organization is inexperienced
in managing customer service, the risks for failing are very real,
as tight management and KPI evaluation is very important. But
in the end, it's all a matter of trust. Ask yourself: do I trust
a partner, this partner, with a piece of my business?
About The Author
Erwin Steneker is a senior support consultant with over 12 years
of experience in both sales and IT support. Check out www.customerservicepoint.com
for articles on quality Customer Service, CRM, help desk software
tests and more.
Article Source: http://EzineArticles.com/
|
