In-House vs Outsourced Call Center - In New Economy Everything Has Changed

The conversation of an in-house vs outsourced call center has changed dramatically in the new economy of 2020. While businesses have always needed to be flexible and nimble to adapt to external changes, few were prepared for an implosion of the “normal” economy.

Despite risk management plans, recent events have challenged the survival of businesses due to a spectrum of risks. Chiefly these have been economic, regulatory compliance, financial, operational, and competitor risks. Accordingly, for many businesses, the most obvious adjustment has been the transition to remote work from home employees.

So, with this recent business transition to remote work from home, let’s discuss more about an in-house vs outsourced call center strategy, before reaching a decision as to what is best for your company.

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A company decision between an in-house vs outsourced call center is driven by its need to improve performance.  For instance, this might be company growth, revenue, service quality, competitiveness, profitability and other factors.

Call center outsourcing is a decision by a company to subcontract its call center management function to an external third-party vendor who does it for a living.  Generally, a company reaches this decision if the call center management function is NOT perceived to be their core business value or it is something they are very uncomfortable with doing.

Now let’s discuss why an outsourced call center offers a company significant advantages in the new economy.

1 – Saves Time

A company’s decision between an in-house vs outsourced call center starts with the latter’s saving time for its management.  In simple terms, proper time management is crucial to business success, whether it is the owner, a manager, or a member of the workgroup.

The underlying assumption is that the call center function is NOT a core focus of the company.  So the company management is involved in managing the provider relationship and not the call center operational details.    Consequently, company management saves time for more productive business activities.

Successful companies use call center outsourcing to maximizing their productive use of time.  Specifically, their management prioritizes and focuses on what is important to the success of the company and delegate the rest.

2 – Reduces Costs

Between an in-house vs outsourced call center, the latter provides significant cost savings for a company’s call center functions.   Consequently, with the global economy near-standstill, companies are under extraordinary competitive pressure to adapt and reduce costs to survive.

Your company can reduce costs related to facility space, infrastructure, call center technology, support, capital, and most significantly, labor.  So this can produce significant savings since labor is the highest percentage of the call center function.  For example:

3 – Reduces Risk

The COVID-19 pandemic has created economic damage that is already the largest economic shock the world has experienced in decades.  Accordingly, your company likely faces a multitude of risks in today’s uncertain business climate.

Economic Risk

While an economy naturally fluctuates with highs and lows, the US economy is currently imploding, with negative growth, high unemployment, and low consumer confidence.  Consequently, your company needs to ensure healthy cash flow, by maintaining a tight budget with low overhead.  Correspondingly, shifting from an in-house to an outsourced call center provides you a means to achieve this.

Compliance Risk

Your business faces an abundance of laws and regulations (Federal and State) to comply with.  For example, consumer data protection, employee occupational safety, health, and others.  In particular, COVID-19 guidance and regulations, seem to shift like the wind.  Between an in-house vs outsourced call center, the latter is more experienced and current with regulations that affect the call center industry.

Security And Fraud Risks

If your company uses online services, it is at risk of data breaches, identity theft, and payment fraud.  While a traditional in-house vs outsourced call center addresses these risks differently, transitioning company in-house to work-at-home personnel changes the paradigm.  Unless your company has the technologies to monitor and ensure remote personnel compliance, it will prove to be a technical nightmare.  Basically, using an outsourced call center is likely a better solution.

Operational Risks

Whether internally, externally or usually a combination, your company will likely experience a loss of business continuity.  Since a call center function is inherently complex, this can be related to a national disaster, servers, networks, power outages, people mistakes, etc.   Whether it’s a people or process failure, these adversely impact your company in terms of money, time, and reputation.  Accordingly, when comparing an in-house vs outsourced call center, the latter is more knowledgeable and experienced in keeping your company’s business running.

4 – Simplifies Scaling Up Or Down

Using an outsourced call center allows your company to adapt to the changes in your economic environment and phase of business evolution.  Moreover, the effects of the COVID-19 pandemic have created significant uncertainty for all economic players.  In short, your company is challenged by the planning, funding, systems, staffing, processes and technology to adapt to this changing environment.  For example, using an outsourced call center allows you to:

5 – Increases Flexibility

A company that is flexible responds to change by evolving.  Consequently, the most flexible companies do not fight change. But rather, they accept and adapt as a normal aspect of the changing business environment.  Accordingly, using an outsourced call center allows your company to:

6 – Improves Efficiency

The decision between an in-house vs outsourced call center may reflect the economic pressure to improve the efficiency of your company. Basically, efficiency measures how well your company converts inputs like capital, labor, and materials into outputs like revenue, products, and services.

There are three main areas of your company’s efficiency that greatly benefit from using an outsourced call center: financial, labor, and operations. So, let’s discuss each in greater detail.

Financial Efficiency

Financial efficiency measures your company’s expenses as a percentage of revenue. Consequently using an outsourced call center saves time, reduces labor costs, simplifies company scaling, and increases flexibility. So, this reduces your company’s expenses and increases its revenue.

Labor Efficiency

Labor efficiency is the measure of employee output in an hour of work.  As shown above, redistributing labor activities based on priority, value, skillset, and cost improves the total level of workgroup output. Also, adapting an outsourced call center’s technology improves your company work staff allowing for increased productivity and flexibility.

Operations Efficiency

Operations efficiency is related to your core company’s processes such as manufacturing and service delivery. Because this is where the majority of business costs occur.  Basically using an outsourced call center saves time, lowers labor costs, and strengthens adaptability. As a result, the whole area of your company’s operations is streamlined over time.

For companies in the new economy of 2020, the decision process of an in-house vs outsourced call center has changed dramatically.  In reality, the benefits of using an outsourced call center are compelling to long term business survival.

Your company is constantly being challenged to improve its performance by its employees, customers, competitors, and investors.  Accordingly, we have presented outsourced call center benefits that can help your company navigate the “new normal economy” and the uncertainty that lies in the future. Finally, your decision to migrate from an in-house to an outsourced call center can be done in distinct stages, while reducing risk and gaining valuable experience.

Please call us at (888) 339-6699 to discuss how our call center outsourcing services will serve your business needs or Contact Us.