Contact Center Outsourcing basics

Contact center is the interface between a company and its customers. In the consumer-centric era we live, customer support is a decisive factor affecting customers’ opinion of a company and subsequently loyalty. Contact centers consist of two major facets, the human resources and the automated systems. Customer demand for increasingly more options and features increases the pressure to deliver better support, and as a result the costs of operating and maintaining a contact center.

In this context, many companies decide to outsource a part of their contact center or even all of it. Full outsourcing includes everything, from technological infrastructure up to the human resources needed to operate the center. A more frequently-used model is partial outsourcing, frequently also called hosted model or SaaS (Software as a Service). In this model, the company retains the human resources that operate the contact center and parts of the software, and uses a service provider for the infrastructure. The infrastructure facilities are then usually accessed via web interfaces. There are also some blended models where contact centers are split between in-house and hosted depending on their functions (customer service for example can be kept in-house, while telemarketing can be fully outsourced).

The choice of whether to outsource the contact center depends most often than not on cost factors. Partial or full outsourcing offers significantly reduced costs, both upfront and operational. In the outsourced models, the pay-as-you-go method is used for billing. Cost depends on capacity and functionalities being leased. There is no need for risky large investments. Operational costs are also smaller (the cost of leasing is smaller than the cost of support contracts and in-house specialized personnel to manage the systems). The cost of upgrading and keeping up with technology advances is also eliminated or severely reduced. Finally, some parts of the contact center, like IVR, tend to have inherent cost benefits in outsourced environments, due to their nature. 

Other than cost factors, there are also some other issues to consider, related with technology. Insufficient knowledge of relevant technology is one of these issues. It is very frequent for a company to buy large in-house systems investing large amounts of money, without actually using them fully afterwards. Outsourcing eliminates the risk of becoming victims to cross-sales and up-sales efforts of vendors.  Launching time of services is another issue that leads companies to outsourcing. In-house deployments are time consuming and bug prone initially. Using outsourced services ensures shorter launch times.  

On the other hand, there are situations where outsourcing is not the best strategic decision. For customer service representatives especially, outsourcing yields many risks, especially when the outsourcer resides on a different country. Insufficient knowledge of the industry and the products of the company, as well as different accent and non-native language might prove unpleasant for the customer experience. Therefore a lot of the companies prefer to maintain in-house agents for at least the more critical parts of the contact center, such as customer support.

Outsourcing can prove cost inefficient also in some situations. If a company already has skilled engineers that can deploy and support the infrastructure, while at the same time they can decide exactly what they need to buy, it can be cheaper to buy their own equipment. This is usually true for large companies, where size of the contact center justifies spending of resources to employ and train their own human resources to operate it. The additional benefit these companies have is that they have complete control over the systems, including security issues (which in some cases, like bank contact centers that manipulate financial data, are critical).

The final decision utterly depends on the special characteristics of each individual contact center. Cost factors should be balanced with customer satisfaction to end up with the best solution. In general, outsourcing should be a good choice for most startups and small businesses that require few resources combined with a large variety of functionalities. Large companies which depend on customer service quality are usually better off with in-house solutions.