A primer on contact centre outsourcing

Outsourcing of contact centre seats is a relatively small, but firmly entrenched practice in Australia. 

Right now, the local contact centre market comprises roughly 2,000 organisations operating a total of 223,900 contact centre seats. Seventeen per cent of those organisations use outsourced providers, resulting in a total of 46,000 outsourced contact centre seats.

Where do we outsource

Interestingly, when Australian organisations choose to outsource we prefer to keep our business close to home, primarily selecting partners from the Asia Pacific region. At present, the Philippines is the country we turn to most frequently, with other popular choices including India, New Zealand, Malaysia and China.

There are numerous factors that come into play when an organisation is deciding whether to outsource, and which country to choose from. The ability to maintain or improve the quality of service is paramount, as is the quality of available telecommunications services. (Hence our preference for outsourcers in countries with a comparatively stable and reliable telecommunications infrastructure). The cost of labour is always a consideration, as is the ease of doing business. 

One of the biggest issues is the language skills of contact centre agents. Australian's typically show little tolerance towards contact centre agents with accents that are difficult to understand. Therefore, Australian companies tend to be drawn to outsourcers who can offer good English skills or American/Asian accents.

Why outsource?

Choosing to outsource a contact centre is not an easy decision. Almost half of all business (45 per cent) worry that outsourcing may lead to a loss of control in contact centre operations.  The same number view security as a potential issue, particularly given the need to reveal internal processes and confidential data to a third party.

Just over one third (36 per cent) of organisations are concerned that there may be a loss or reduction in service levels and just under one third (32 per cent) believe the expense of outsourcing is prohibitive. 

Despite these concerns, organisations are drawn to outsourced contact centre services due to the ever-present need to increase productivity and a desire to improve customer engagement.  Occasionally, outsourcing is simply a question of technology. Implementing a contact centre system, or the need to upgrade and maintain currency of an existing system can be costly.  In some circumstances it's just easier and cheaper to give the job to someone else.

Is it delivering?

Organisations that have outsourced their contact centres report the move does indeed support increased productivity, saves money on technology and it can deliver operational cost benefits.

To date, however, it has failed to address one of today's key business requirements – the need for improved customer engagement. Given the customer experience is integral to the raison d'etre of a contact centre, this makes the current value of outsourcing questionable.

One development that may help to make outsourcing more attractive is the emergence of South Africa and New Zealand as new business process outsourcers. Both of these countries offer capacity, the ability to reduce costs and good English language skills.  In the case of New Zealand, there is also the benefit of a particularly strong cultural alignment.

Selecting an outsourcer

Outsourced customer interaction has become a commodity.  This is placing tremendous cost pressures on outsourcers and has resulted in a highly competitive, low profit market. This is good news for organisations shopping around for an outsourced service, but it's never wise to choose a business partner on price alone. 

Once you've decided on outsourcing, whether considering an offshore or Australia provider, look for a partner with a proven ability to innovate, who can demonstrate effective client partnerships at both strategic and operational levels. Check that they have a multi-channel customer experience strategy, that they can handle social and mobile interaction as a standard part of the service, and that they have a suitable technology platform to make it all happen.  When it comes to cost, look for a flexible gain-share pricing model that encourages results.  Most importantly, find a partner that you believe will successfully engage and add value for the customer.

After all, if you plan on entrusting your customer interactions to a third party, you need to be confident that they are in reliable hands.

Dr Catriona Wallace is the managing director of customer experience strategy management consultancy Fifth Quadrant.