The definition of outsourcing has broadened in the last 20 years. A company may choose to outsource their back office functions, human resources, payroll, or the more traditional model of customer service, support or sales. What an organization chooses to outsource depends on a number of factors, including:
- Whether outsourcing a particular function enables the company to focus more on core competencies within the company without dedicating resources.
- If the company can leverage offsite/long distance resources as part of a survival/disaster recovery scenario.
- If the outsourcer can offer access to new or advanced capabilities without an internal investment.
- If outsourcing can provide lower risk associated with new service initiatives.
While outsourcing is common today with onshore, nearshore and offshore options available, some companies are reluctant to consider outsourcing. The concern is often a desire to maintain “Touch,” with customers, and not to give access to their customers to third parties. The truth is that with today’s technology and process management, a company need not ever give up ownership of their customer relationship, or data. A good outsourcing partner provides their customer with transparent, real time access to the data.
Most larger companies today exploit the outsourcing model in some part. The most successful of these companies have learned to balance cost, customer experience and advanced capabilities. Some companies chose to implement a VIP Model, where the first level of support or low value sales are handled by a high-volume outsourcer, while the high value customers and VIP’s are all handled in-house, or through scalable level I, II, III support within the outsourced partner’s organization.
Types of outsourcing
The most common type of outsourcing is call center/contact center. In this model, the outsourcer is the voice of the company, or first point of contact for customers calling and in some cases emailing or chatting with the companies support organization. It may also include telesales, fulfillment and other areas requiring the customer to contact the company. The outsourcer is often connected via direct connection to the client service organization for escalations and remote management.
Back office may include transactional processing, software development, and other processes that do not necessarily include direct customer contact. It may also include document processing, human resources or accounting processes.
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Due to sensitivity to Offshoring, some companies prefer a U.S. based call center. Though the company may choose to outsource their call center, back office or other specialized work to a third party, choosing a company that has U.S. based resources allows the company to comply with certain regulations that require a call center to be in the U.S. This is common in healthcare and financial institutions. Though usually more expensive per seat, cost can be lower due to the specialization of the workforce.
Nearshore organizations may include organizations located close to the U.S., Mexico, Central America, South America all offer attractive benefits such as lower cost models and multiple language support, including Spanish and Portuguese as well as English. They are also geographically close. Large Call Center and BPO Centers are located within three hours of Miami, Dallas or Houston. Call Center and BPO Hubs in El Salvador, Belize and Costa Rica are all a short plane ride from major U.S. airports. A three to five-hour plane ride means no jet lag, and the opportunity to do one day trips. Nearshore proximity to the U.S. also means cultural affinity. Many call center agents in Central America have lived in or frequently visit the United States.
Offshore operations in India, the Philippines and even Eastern Europe are the low-cost leaders in the business, but offer the least in terms of language abilities, and quality. Except for some big players who have centers in these far-flung regions, many of the operations are small, unsophisticated operations who often suffer from technology issues, redundancy, infrastructure or cash flow problems.
Should you Outsource?
- Is the cost, distraction and effort to build an ever-growing infrastructure for support worth the effort?
- Is the organization one with a tradition of strong internal support, with the infrastructure, technology, and management in place to support current and future initiatives?
- If the organization supports a diverse customer base, does the organization have the structure (Documentation, training, management processes) for a growing multilingual customer base?
- Does the organization have a multi-site disaster recovery plan in place?
- Are you unable to grow your support organization fast enough to handle customer growth?
If you answered no to more than two of those questions, you need to explore outsourcing as a temporary or long term plan.