Call Center Business Focus Archives - Nexus Teleservices

In-House vs Outsourced Call Center In New Economy

NEXUS TELESERVICES — Thu, 27 Aug 2020 12:00:31 +0000

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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In-House vs Outsourced Call Center Overview

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:

Lower Personnel Recruiting | Rotation | Retraining
Reduce Salaries | Benefits | Taxes
Offset Labor Regulations | Health Risk Legal Liabilities
Reduce Human Resource Administration Burden
Lower Operational Management Burden

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:

Adjust Support Staffing Due To Seasonality (COVID-19) Highs/Lows
Flexibility For Staffing Business Expansion And Contraction
Expand Service Coverage (Markets, Languages, Multiple Time Zones)
Launch New Products, Services And Promotions
Supplement Staffing With Specialized Skill Sets For Changing Circumstances

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:

Increases adaptability to changes in technology and customer expectations by leveraging the skill sets and infrastructure of an outsourced call center.
Improves company employee retention by focusing on core company needs.
Strengthens the company talent pool by diversifying staffing via the company and outsourced call center.
Spreads the call center function role across multiple locations (domestic and offshore) allowing continuity.
Adjusts staffing, resources, and cost structure as business demand changes.

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.

In-House vs Outsourced Call Center Conclusion

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.

The post In-House vs Outsourced Call Center In New Economy appeared first on Nexus Teleservices.

Call Center Outsourcing Disadvantages – 5 Business Issues To Consider

NEXUS TELESERVICES — Wed, 22 Jan 2020 16:00:38 +0000

Call Center Outsourcing Disadvantages - 5 Business Issues To Consider

A company, whether service or product-focused, needs to constantly nurture its existing customers while identifying and converting potential prospects into future customers. Consequently, the company call center function has evolved to achieve these business goals and may be performed in-house, outsourced, or in combination. While there are many advantages to outsourcing this company management function to a third-party, we should also review the call center outsourcing disadvantages that should be considered as well.

To begin with, let’s review the WHAT and WHY a company would choose to outsource its existing in-house call center function to an external third-party service provider and what might be some of the disadvantages in doing so.

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Call Center Outsourcing Disadvantages Overview

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 focus or it is something they are doing poorly in terms of quality, cost or both.

The advantages to being gained when a company chooses to outsource the call center function include lower costs, higher profitability, and improved service quality, Additional company benefits include greater flexibility, improved business focus, scaling for growth, rapid expansion to new markets, acquiring new skills it doesn’t possess, contingency planning and more. However, the company decision to migrate from an in-house to outsource call center function should be an informed decision that takes into consideration the risks and disadvantages associated with it.

Let’s now discuss some of the call center outsourcing disadvantages.

1 – Decreased Control

One of the key call center outsourcing disadvantages is the decreased control the company management has in the service delivery process. Generally, when the call center function is no longer in the company’s home facility, there is less visibility and control over the operation. Basically, personal supervision becomes more difficult since you rely on the third-party staff (who you don’t know at the outset) keeping things in order without your direct guidance.

Consequently, to reduce risk, a company needs to select a third-party vendor with the right credentials, experience, technology tools, and call center metrics to ensure a high level of transparency and accountability. Also, you must invest in fostering strong communications with the management of the call center vendor to ensure that it can adapt to your company’s business and uphold your quality standards of service and production.

Finally, your Service Level Agreement with the call center outsourcing provider should be structured to reflect your business priorities and expectations of service delivery.

2 – Confidentiality And Trust Issues

When a company decides to outsource part of its business functions, it invariably has to share sensitive data with the third-party outsourcing provider. Whether the company outsourcing is related to accounting, debt recovery, advertisement, or call center functions, provision must be made to minimize lost of control and ensure any regulatory compliance of data confidentiality and its usage.

Areas where the company needs to ensure proper administration of data by the call center outsourcing provider include:

Vendor And Customer Lists
Proprietary Processes And Strategic Plans
Intellectual Property
Personnel Recruitment Restrictions And Conflicts
Consumer Identification, Credit And Medical Information

To minimize company risk, the outsourcing provider needs to take care of the confidential data and follows security standards guidelines. Accordingly, these need to be specified in the Service Level Agreement with periodic auditing.

As a former president once said, “Trust but verify.”

3 – Communication Issues

One of the call center outsourcing disadvantages often experienced by companies is communication issues in the service delivery process. Generally this occurs when the company decides to outsource using an offshore call center. Because the first language differs from the company’s customer base.

Consequently, there might be language barriers on the telephone, due to different accents or lack of cultural affinity. As a result, this can adversely affect a telephone conversation and negatively impact the customer experience. So, if the decision to outsource was to improve customer retention or increase sales conversions, communication issues will not produce the results desired.

Generally, the company, as the client, has the right to screen and pre-approve call center representatives assigned to its account. Accordingly, the company can take measures at the outset to minimize communications issues. Generally, this is by exercising due diligence in the assignment of personnel to its account and perform quality audit reviews.

4 – Reduced Business Focus

When a company decides to outsource any of its functions there is generally reduced business focus. Basically, this is inherent in the relationship between the company and the outsourcing service provider. Chiefly this is due to the separation and distance between the two parties in the relationship.

Less Product And Company Knowledge

Outsourced staff assigned to a client account are, by definition, external workers. Consequently, they will have less knowledge of a company, its products, corporate culture, etc. Although they are trained before “going live”, they may only know the basics. As a result, they won’t be able to handle more technical or demanding customer interactions.

However, this is NOT necessarily bad for the company if the provision is made from the outset to allow for a tiered escalation of service response. Rather, it may be cost-prohibitive to have an outsourcing partner to cover the five percent exceptional cases.

Less Employee Collaboration

A company’s in-house personnel may be located in the same facility, where proximity fosters clear and rapid communication. Conversely, an outsourced staff may be physically dispersed, serving multiple clients. As a result, this changes the dynamic in working relationships and communication flow.

However, large, global companies, likely share similar characteristics as the outsourcing provider. So the employee collaboration and communication flow are likely similar.

Less Company Loyalty

A company’s employees serve only one master. Conversely, a third-party outsourcing provider has multiple clients, and their employees serve two masters, their employer, and their client account.

This duality may or may not translate into a lower quality of service by the third-party outsourcing provider. Generally, if the outsourcing provider has its internal policies aligned with their clients’ service satisfaction levels, conflicts can be minimized.

5 – Hidden Costs

When a company decides to outsource a business function, this is often to reduce costs while maintaining service quality. However, it serves a company little value if both goals, cost, and quality are not met by the outsourcing provider. Consequently, for the company, it needs to identify all the hidden costs to make a sound decision about outsourcing.

Here are a variety of hidden costs that should be taken into consideration in the outsourcing decision process.

DUE DILIGENCE

The lowest cost service provider will not likely satisfy your service quality goals. Because the provider will need to make tradeoffs in their resources to support your account and be a profitable relationship.
Selecting an outsourcing provider (call center, software development, office processing, etc.) requires company management resources, expertise, and time.
The time allocated for the startup transition needs to be balanced with developing the working relationship with the outsourcing provider.

POST DECISION

The transition phase obligates the company to dedicate management staff to new roles to oversee this process. So, this is at the expense of other duties.
There will be a need to realign a company’s infrastructure, processes, and personnel to work with the outsourcing provider.
The company’s culture and organization will need to adjust to the new relationship.
The greater the distance between the company and the third-party outsourcing provider, the greater the costs. These costs include coordination, travel and communication.

In the end outsourcing is all about costs in one way or another, whether they are real expenses or lost opportunities.

Call Center Outsourcing Disadvantages Conclusion

A company needs to constantly nurture its existing customers while identifying and converting potential prospects into future customers. Correspondingly a company dedicates its call center function resources to achieve these goals. Accordingly, different call center outsourcing disadvantages should be considered prior to migrating from an in-house to outsourced solution. Consequently, if the decision is made to use external outsourcing, this process can be done in stages to reduce risk.

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

The post Call Center Outsourcing Disadvantages – 5 Business Issues To Consider appeared first on Nexus Teleservices.