Call Center Outsourcing Disadvantages - 5 Business Issues To Consider

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:

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