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Making the Right Call
Call center outsourcing can provide value to an organization, but not by walking away from responsibility. We examine the people, process, and technology issues managers should consider when making their decision.
For the rest of the August 2004 issue of CRM magazine please click here
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Call center outsourcing has grown from the channel of choice for high-volume telemarketers to big business. Some consider its value proposition too powerful to ignore, others consider the resource too politically and emotionally controversial to handle. The political uproar can make it difficult for companies trying to rationally evaluate call center outsourcing strategies to make a clear, informed decision. The fact is, call center outsourcing can provide value to an organization, but not by walking away from responsibility. We examine the people, process, and technology issues managers should consider when making their decision. Outsourcing Realities According to telecommunications giant Sprint, the cost of owning and operating a business-grade, high-speed data line has fallen more than 90 percent in just 10 years. Lowering those barriers allows companies even of modest size to seamlessly hand off customer interactions to an external provider, while allowing relatively small or distributed customer care specialists to handle calls as though these companies were a large installation. The cheaper, wider information pipes also make it more practical to outsource higher-value customer contacts. "Five years ago our members ventured out into outsourcing to do things they didn't want to do, for legacy products they didn't want to support themselves, or off-hours [calls]," says Bill Rose, founder of the Service and Support Professionals Association (SSPA). Outsourcers started creating more real value as they discovered they had to sing a more complex tune for their supper, facing increased competition from new entrants and some pullback from client companies coming under fire from employee, consumer, and government groups. "Over time, outsourcers are winning people over to the idea that they can do a better job identifying and managing knowledge," Rose says. Like any customer relationship tool, however, outsourced customer care can be employed intelligently, or haphazardly. Those selling outsourcing services often promise impressive per-interaction costs, driven largely by lower unit labor costs, but the reality of modern customer care is, whether the phone is answered two floors or two continents away from the executive boardroom, cost is not king. "Companies focus too much on price," says Marc McCluskey, research director at AMR Research. "You have to look at tangential issues, such as how you actually decide what percentage of the work is going to the outsourcer, and whether you still need second-level support."
Sizing Up Outsourcers Companies looking to engage with call center outsourcers should learn a lesson from many of the early adopters, who rushed into decisions with little or no input from the functional leaders who own the customer experience. "[Outsourcing] was not brought about by the VP of customer service, but brought about by the CFO, who said 'I heard we can cut the cost of support' by some ridiculous number," Rose says. Offsite call centers need to be evaluated by the same customer care architects and implementers who are responsible for the ongoing operations inside the company. "It's a combination of three groups: IT, marketing, and sales definitely would have a huge vested interest, and probably the CFO," says Ross Garrity, vice president in BearingPoint's global technology services group. While outsourcers will try to paint rosy pictures in the aggregate about the resources and expertise at their disposal, potential clients still bear a responsibility to do their own checking. Ask to speak with both current and former clients, preferably those who use the service provider in the same mode you plan to outsource (tech support, inbound sales, outbound sales, etc.). And don't be shy about asking for HR records to back up the bold proclamations made about the proficiency of the agent staff. "You want to see resumes if [outsourcers] are touting that they have thirteen to fifteen years of experience," Garrity says. Remember that outsourcers face the same challenges as an in-house call center, including imperfect availability of resources. Not all their agents may be perfectly suited to the task on day one, but the executive team evaluating call centers needs to be able to make an informed judgment about the provider's ability to supply enough agents to scale with need. Unless instructed otherwise, outsourcers will improvise. "If it's a brand-new industry, assuming we would have enough time, we would go out and try to hire somebody with industry experience, but if nobody comes through we always have somebody waiting in the wings who can think on their feet," says Jeff Kostermans, CEO of outsourcing firm LeadGenesys. Most call center outsourcing firms will have their own internal suite of CRM tools, but depending on the size of the engagement and the sophistication of your own software environment, it may be more sensible to include the remote site in your application, rather than integrate the outsourcer's applications with yours. Web-based applications can make inclusion easier, but terminal services suites from companies like Citrix and Microsoft are also popular. If the outsourcer's systems are chosen, learn from their example. "You expect your outsourced call center to be up to par technologically, or hopefully a little more advanced than you are, but you then need to understand how the process of handling customer calls is facilitated using that technology," AMR's McCluskey says. After selecting an outsource partner, appoint a key point person to manage the day-to-day relationship with the outsourcer. Although not literally responsible for the floor activities, this executive must intimately understand both the outsourcer's operations and the company's own customer care strategies. "The ideal person is a manager who runs the particular program on the floor [in an existing call center]," says Norman DePalantino, COO of Epixtar International Call Center Group. If the selection process sounds like real work, that is because it is. "It should be a minimum of three to four months if you've done your due diligence and written transition plans," Garrity says. Know When to Hold 'Em Outsourcing explicitly requires willingness to relinquish some control over the customer care process. But don't relinquish responsibility and oversight where it counts. Outsourced agents are employees of the service provider, but particularly for larger accounts in which agents will exclusively work on one engagement, they should be hired with guidelines and skill requirements clearly outlined in the service agreement. Outsourcers with larger client bases can often take chances with innovative hiring practices that an in-house call center cannot. "We don't look for people who have call center experience," says Jim Ball, chief architect of customer care provider Alpine Access. The company, which employs home-based agents, looks for service-minded employees from other walks of life. Most have some form of medical or travel agency certification. A client cannot force an outsourcer to terminate an agent, but a good outsourcing contract gives the client the right to pull any agent off his account--finding another task for the agent is the outsourcer's problem. During agents' tenure, training is crucial. For reasons of language, culture, and accessibility, this may require a great deal of trusted cooperation from the outsourcer's support staff. "Training is typically developed and delivered by the downstream trainers of the outsourcing organization, but there has to be oversight from the client organization," says Debashish Sinha, managing director of global advisory services for neoIT. However, those in-house trainers need to be able to validate that best practices are being followed. Last, clients must establish and enforce a clearly understood and factually definable set of metrics, complete with collection mechanisms and reward structures, and evaluate performance and the future of the outsourcing relationship on a regular basis--at minimum, every three months. "You want to bind those penalties and bonuses with data you can actually collect and understand," McCluskey says. Outsourcers may push for longer contract terms, but they should be more than happy to cooperate on clearly defined measures for success and failure. "The last thing we want is to miss the mark and not meet customer expectations because not enough prep work was done," DePalantino says. Pay special attention to auditing the data collection and reporting methods used by the outsourcer. Setting up a PC to feed bogus data into an ACD or Web-reporting page is child's play. The numbers used to determine the health of your outsourcing endeavor must be trustworthy. No Quick Fixes An outsourcing relationship does not magically solve all customer care challenges. Virtually all outsourcing providers boast in glossy sales guides that they are situated near an inexhaustible vein of college-educated, English-speaking experts who would love nothing more than to stay in a call center for the next decade, but the truth is that outsourcers face unique staffing problems. "Contact center outsourcers have much higher attrition than in-house [operations]," Sinha says. A valuable outsourcing partner is not one that can simply deliver high-quality, low-cost customer care, it is one that also can manage the constant pressures from multichannel customer contacts, changing employee rosters, and continual pressure to improve--and do so consistently over time. They cannot do it alone. Washing one's hands of level-one customer care concerns because an outsourcer answers those calls is the quickest path to dissatisfaction. Continually coordinating with the outsourcer, to learn more about the customer experience and how it can be improved, makes all the difference. "All of the management aspects are the key things they overlook, so they have to go back and spend more time and money revisiting that," McCluskey says. Chris Selland, vice president of sell-side research for Aberdeen Group, says that the most common outsourcing failures come from firms that view call center outsourcing the same way they view janitorial contracting. "That doesn't mean [outsourcing] means treating customers like garbage, but [that] companies need to be more honest with themselves than they have been in the past." Customers are a valuable resource, until and unless they have an experience under your brand that displeases them. Outsourcers can improve the quality of those interactions, while maintaining value for the company, but only if the engagement is about more than simply cutting costs. Contact Executive Editor Jason Compton at jcompton@destinationCRM.com Outsourcing to Suburbia Dramatic images abound of American customer care jobs being exported overseas by waves of outsourcing. The reality is that many outsourced seats are going not to Bangalore, but to spare bedrooms. 1-800-Flowers is one among a number of firms using outsourced agents who work from their homes throughout the United States. Since Christmas 2001 the floral network has engaged anywhere from 10 to 250 concurrent agents in a given week from customer care specialist Alpine Access, whose employees work from their homes on conventional PCs and phone lines or broadband access. The agents take and file orders using the same software as in-house 1-800-Flowers agents, accessing it remotely via a frame relay connection in Alpine's facilities. "We still are involved in [quality assurance], we listen to calls, but a lot of the administrative stuff got pushed off to [Alpine], and they had very competitive pricing because of the home agents," says Lou Orsi, director of vendor relations for 1-800-Flowers. Orsi and his staff coordinate with Alpine to define the ideal agent to put on the account, and they provide training to Alpine staff, who in turn design e-learning materials that are delivered to agent PCs. "If we don't have good people taking care of customers, we could severely damage our revenue, so we don't treat our outsourcing as 'overflow,'" Orsi says. 1-800-Flowers customer care managers can monitor live customer interactions by Alpine-provided agents, and maintains its own call distribution records, which it then matches up with Alpine's numbers to do final performance checking. "We've been very pleased. They do a very good job of getting the right people onto our application, and working with them has been a pleasure," Orsi says. "It's not as cheap as going to India, perhaps not as cheap as going to the Philippines," he adds, "but it offered us English-speaking agents that were very qualified, and able to meet the scalability that we required." --J.C.
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To contact the editors, please email editor@destinationCRM.com
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