A decade ago outsourcing was a new concept but now it is, in many industries, the norm. Indeed it is a significant part of the global economy: in August 2013 Gartner predicted that the global outsourcing market will grow by 5.4% a year for the next four years, reaching a total value of £172Bn.
Yet, despite this, many corporate executives remain sceptical of the benefits of outsourcing. In fact, it is hard to think of an industry that has grown so large, so rapidly while, at the same time, attracting such widespread opprobrium. Here we debunk the some myths that hold back far too many businesses from realising the benefits of outsourcing.
1. Language will be a hurdle – Perhaps the most common complaint about outsourcing to an overseas firm is that it will not have the language skills required. We have all suffered through conversations with unfortunate young foreigners, based half-way round the world, bravely trying to comprehend unfamiliar words with thick local accents and on a crackly phone line.
Yet, in new outsourcing locations in Europe, language skills are a selling point rather than an embarrassing problem where students are much more multi-lingual than in the UK or the US. Also the standard of those languages has to be very high. It is not enough for someone to speak the language well, or even be merely technically fluent, they must be a native speaker. For example, to speak to Brazilian consumers Portuguese is not enough; it must be Brazilian Portuguese.
2. It might save us money but it will compromise quality – There are few aspects more critical to the success of a business than the relationship it has with its customers and so it is unsurprising that so many companies are reluctant to entrust these relationships to a third party. Because much of the early enthusiasm for outsourcing was driven by the opportunity to cut costs, and because there are still significant savings to be had – fees can be around half those of a comparable agent in the UK – the entire outsourcing industry has, in many minds, become synonymous with cost savings. Yet, in recent research from business advisory firm KPMG, among 490 outsourcing contracts worth a total of £10Bn found that for many companies the primary driver for outsourcing is no longer cost reduction, it is, in fact, enhanced quality of customer service.
KPMG stated that 48% of respondents based decisions to outsource on a desire to improve service levels, up from 28% in 2009, and 56% cite “the need to access skills” as an influential factor behind their decision to outsource.
3. We will need to spend all our time training the outsourcer’s agents – An outsourcing firm may hold generic skills and knowledge but it will lack specific knowledge about a company, its products, services and customers. For this reason many executives fear that entering an outsourcing arrangement will result in them running endless training sessions for the outsourcer’s agents.
Yet, in most cases, it is only the initial training that needs to be delivered by the client company before the agent’s managers can pick up all future training
4. I will have no control over an outsourcer – It is easy to feel confident about the quality of customer service you are delivering when you can wander over to your customer service department, walk among the agents and listen to the conversations they are having. How do you know what an outsourcer is doing?
Technology and excellent broadband widths these days means a client can monitor web-chats in real time. It could look at a dashboard showing response and resolution rates and it could see from the low escalation and complaint rates that the campaign was running as it should. In fact, this can give it a clearer view of what an outsourcer is doing than that gained from an in-house department.
5. We will have to pay six-figure set-up fees – For organisations that have spent years building an in-house customer service function it has always been a major step to outsource it, not only for all the concerns above, but also because outsourcers have traditionally charged significant set-up fees.
An understandable reluctance to pay six-figure set-up fees has deterred many executives from outsourcing, yet the rise of cloud technology solutions, and a more flexible workforce in many countries, is enabling a growing number of outsourcers to do away with these set-up fees.
Agents now often charge no set-up fees, while offering on-going costs around half those of a comparable UK contact centre, and providing a pool of talented, enthusiastic young workers with enviable language and technical skills.
About 60K: Based in Sofia, Bulgaria, 60K is a 600-seat contact centre which, since 2008, has provided multichannel and multilingual support to the customer service functions at companies such as Thomas Cook, Sky, Seatwave and Service800.