Outsourcing customer contact: you win some, you lose some
Outsourcing customer contact: when organised in the right way, your customers won’t feel the difference. Or will they? What is at stake when you ask someone else to take care of all your customers?
Por Erik Bouwer
Sourcing is more often than not becoming a part of the strategy formulation process of companies. Sourcing deals with the question: ‘do it yourself or contract out’, ‘make or buy’. Answering that question is becoming more and more complicated: there are many factors that need to be taken into account and the number of sourcing variants also keeps growing.
In the vision and mission of your organisation, values and norms are established that clarify the significance of the client for your organisation. Mission and vision are also the basis for the strategy and the client contact strategy. Does one want to offer excellent service to every client? Or is there a low cost approach where clients can benefit from advantageous rates with a minimal service? Are there urgent reasons to cut costs or create extra flexibility?
This strategy formulation process is also linked to the core activities and core competences of a company. Companies that want to give an outstanding service, but don’t have the competences to put this into practice, can consider outsourcing. Some companies want to benefit from the scale benefits of an external provider so that they can cut costs or gain capacity more easily. A company that is able to deliver an excellent service, but not able to put the telemarketing aims into practice, can also outsource a part of the client contact.
Strategic analysis and consideration – drawing up business case – RFP – vendor selection – contract phase – pilot phase – transition phase – production phase – evaluation – follow up phase of insourcing.
When one has decided to outsource, the scope of the outsourcing needs to be determined. They form the foundation of the business case. Which processes or activities are transferred to an external service provider, what is the size of the processes and what are the organisational and financial consequences? Client contact has relations with multiple departments and processes, making the ‘cut’ thus requires full attention. Not only should the service be transferred silently, the back and forth information supply needs to stays undisturbed and the (auxiliary) administrative processes need to keep functioning. Outsourcing requires clear ideas about what the organisation wants to supply and what needs to be reached.
In what languages does the client contact need to be done?
What are the operating time spans?
Can commercial objectives be invested externally?
Is the accent on quality improvement or on saving costs?
Will the outsourcing coincide with the automation and restructuring of the customer service?
Has experiences already been gained with regards to vendor selection, transition and production?
How future-proof is the chosen approach?
Is the current operation able to document and transfer his processes in a transparent way?
Is there a need for benchmarking, so that the own performance can be compared with one or more external providers?
How will the service provider charge the work: per call or per hour?
What will be the duration of the contract?
How flexible is your service provider really with scaling up?
Difficult systems. Providers can demand that they get access to your internal systems. This often requires adjustments in the field of information streams and security. Sometimes interfaces need to be developed and sometimes you need to transfer to the systems of the service provider.
Hidden costs. These can arise because of additional work the service provider needs to deliver as a result of ad hoc requests of the outsourcer or of dissensions about the definitions that form the basis of the contract. The outsourcer himself can also face extra costs, for instance when the costs of a producer, external advice for vendor selection, project management or a social plan are not taken into account beforehand. What is the amount of costs when a contract ends (prematurely)?
Culture- and cooperation problems. Problems are guaranteed to arise in every outsourcing. There is a need for a careful introduction period to find out if both parties click with each other. Sometimes the team that closes the deal (the contract) with the outsourcer is very differently composed than the team that needs to organise the transition and outsourcing. What are the work and communication styles of both teams? How is customer-oriented interpreted? Is there trust and open communication?
Indirect consequences for the organisation. Outsourcing client contact entails more than merely transferring calls. Call centres have functional relationships with different departments: back office, finance, HR, IT, marketing, sales and warehouse. The outsourcing of (a part of) the client contact also influences the processes of these departments. Transfer moments where the process steps of both partners need to fit, come into being. It’s not only about links between people, but also about data traffic and reporting.
Accounts receivable need to be paid when – at the contact with clients about payments and financial transactions – direct action of the internal back-office is required. May external agents have direct contact with the back-office or should this go via the team leaders/supervisors?
When outsourcing client contact, you actually outsource the care for your clients. This can result in the creation of room for activities with higher priorities or it can decrease the own vulnerability with regards to contactability. But how do you keep in touch with the market and the client? The presence of client contact in your company keeps everyone on edge. Even if this means that the internal call centre manager thinks along with the management team about formulating new marketing campaigns and that your front office supervisors have lunch with colleagues from the sales department.
Thinking along with the external service provider will work better when all needed know-how is and stays internally available. Even though the process of client contact is outsourced completely or partially, the care and responsibility for the process will stay internally. It is thus still necessary to possess knowledge in the field of client contact. Only then can the performance of the service provider be assessed and adjusted. In the case of outsourcing, both parties often benefit from switchover of one or more experts. But how long after the transfer will your former experts keep working exclusively for you and what are the costs for this? What remains after a year of the historical knowledge of your operation?
The party that will be taking over your client contact, has the client contact process as its core business. This means that it should be a specialism and that money should be earned with is. The first does not always come into its own, the second does. Win-win situations should therefore always be presented realistically: is your service provider really going to do his utmost best to boost the web self-service and decrease the conversation duration? Do agents work with dedication for you and are they involved with your client or product? Are the costs for process innovation noted on the quotes? It’s a real risk that you consider yourself too rich when calculating the future financial savings the outsourcing should create and that you don’t take into account the extra costs resulting from additional work and setbacks.
1.Companies can outsource the entire client contact or they can choose for separate constituent processes: the complete call centre or only the separate constituent processes such as telemarketing or debtor control; solely calls or all channels.
2. Processes can be taken over by one or more parties (single sourcing or multisourcing), domiciled in the homeland or abroad (onshore v offshore outsourcing). Companies can also decide to transfer the activities to low-wage countries (to start a captive). Also, an external service provider can come and work in-company (insourcing, cosourcing).
3.There are different motives to start outsourcing: cutting costs, quality improvements, taking advantage of innovation possibilities, restricting vulnerability, circumventing bottlenecks on the job market. There’s often a combination of motives.
Erik Bouwer is partner of Essentials, chiefeditor of Intellectueel Kapitaal, chiefeditor of Outsource Magazine.