There are many opinions when it comes to outsourcing, and whether outsourcing your contact center is the right approach for your company. On one hand, some feel they might lose control of the customer experience if they outsource, while others believe outsourcing is the only way to go. The good news, there is always a case to be made for keeping your contact center “in-house,” as well as for outsourcing it.
As a highly experienced Advisor in the contact center space, I have spent many years operating and leading “in-house” contact center operations. I have also spent many years selling “outsourcing” for several very large BPOs. In short, my intent is to provide the reader with a view through various lenses in hopes of shedding light on the various risks and benefits of each extreme view.
You may ask, “why would a brand ever consider outsourcing in the first place? It’s a great question for which there are several answers! However, there are two primary reasons brands outsource and many secondary reasons – we will cover all of these:
The primary reasons brands outsource are cost and scalability.
Cost: Outsourcing contact center operations can be much more cost effective than running an internal call center. First, outsourcing eliminates the need to invest in and maintain expensive infrastructure and equipment. Second, outsourcing partners provide economies of scale that allow them to offer lower costs than an internal call center. Depending on the contract terms and rate scheme (per hour, minute, transaction), the outsourcing partner (we choose to call them “Partners” over “vendors”, “providers,” or “suppliers”) absorbs nearly 100% of the volume variability. This provides a great cost benefit for the brand if you can deliver on your volume commitments to your Partner. Third, an outsource partner provides access to virtually all global delivery markets, with proven operating results and much lower operating costs. We could go on and on about this topic and will in future blogs. The one thing to point out is that “cost” should never be the single reason to outsource your contact center volume.
Scalability: Brands that are in high growth mode or have significant volume fluctuations from month to month often struggle to deliver adequate staffing to support these changes in volume. Outsource partners are better equipped to handle fluctuations in demand and can scale up or down quickly, as they have a larger pool of agents available and operate multiple locations and programs. Internal contact centers typically don’t have this level of flexibility. It’s no secret that hiring contact center agents for brands and/or BPO partners has been challenging since the pandemic. As a result, many brands have transitioned their support to nearshore and offshore markets to support their required scale, as it is much easier to hire in those geographies. When considering outsourcing, it’s critical to select the right partner. That’s why it’s critical for brands to work with a company like CX Solution Source, who can align their unique customer profile and specific business requirements with the best location and outsource partner – the partner that “fits” their specific customer support needs and will deliver success.
Although not a complete list, the top five secondary reasons brands outsource include:
Core Product Focus: Let’s face it, some brands are great at building and selling products and/or services, but they stink at running a contact center. We get it. It’s hard and involves a lot of variables – with the “people variable” often being the most challenging! Trying to create an efficient operation requires the right mix of technology, process, success measurement, reporting, communication, discipline, willpower, and a degree in psychology – just kidding. The point is the reason contact center outsourcing is a $100 billion dollar industry is because it’s so difficult to manage one effectively!
Technology Investment: Although “the cloud” has enabled technology providers to build “contact center in a box” solutions, there are still technology investments required to help deliver a seamless customer experience. Most of these solutions address voice, email, chat, and SMS (aka. Omni-channel). Some solutions will include a CRM, reporting, speech analytics, AI, and other savvy add-ons. It’s risky to let a BPO Partner “own” the people and the technology that enables the customer experience. We always suggest to our clients that they establish direct relationships with the technology providers for their core technology (CRM, Omni-channel, knowledgebase, WFM, & LMS). Let your BPO Partner leverage the tools of their choice to manage the people efficiently. We will touch more on this point in future blogs.
Resource Flexibility: We have all had to “make the case” for adding resources within our organization – it’s not easy. CFOs, COOs, and CEOs do not typically want to hear about adding cost into an already thin-margin business model. Having the right partnership with a BPO can give you access to resources (dedicated or shared) to handle special projects, temporary work streams, permanent projects, and tasks, core shared service roles like WFM. The possibilities are endless, with the benefit of this being a variable cost that can be “baked into” an agent rate, a line item on an invoice, or a simple pass-through. The key to resource flexibility is trust and mutual benefit in the relationship.
Reporting & Analytics: Like a brand having core products and services, BPOs must be experts at managing their business using data. With that in mind, nearly all of the 200+ BPOs we have evaluated have an exceptional amount of data and know how to use that data to drive continuous improvement.
The best part: they are typically willing to share this data and insight with their clients. We have found that many of our clients don’t know what data to ask for and how to use the data to improve their customer experience. We always encourage brands “measure twice and cut once” when it comes to reporting and analytics. Most BPO Partners have resources that focus on continuous improvement and are always willing to add value-added perspectives.
Our goal at CX Solution Source is to always approach our relationship with a brand (client) with open eyes. We have helped hundreds of brands with CX strategy, finding the right BPO Partner, assessing operational strengths and weaknesses, and implementing plans to meet today’s customer expectations. Our goal is always to leave our clients in a better place and ride shotgun long after the initial work has been done – because customer expectations and associated customer support, will always remain in a constant state of evolution.
Founder & Managing Partner