The Pros and Cons of Call Center Outsourcing

What is Call Center Outsourcing?

Call center outsourcing is the strategic business decision to leverage a 3rd party organization, often called a business process outsourcer or BPO, to manage your call center and customer service operations.

Call center outsourcing has gained a lot of attention recently as more companies leverage BPOs. From industry titans like Time Warner Inc., Hershey Foods and The Wall Street Journal that have made headlines by claiming to have outsourced some, or part, of their call center workforce in an attempt to slash costs [1]. To industry giants like Dell, Capital One, and JPMorgan Chase stating they have eliminated their call center outsourcing operations because, for them, the costs far outweighed the benefits [2]. The debate rages on about whether or not call center offshore outsourcing is beneficial for business and some industry leaders are picking sides.

These opposing stances make it clear that the decision to outsource part or all of call center operations to a company overseas should not be taken lightly. Below is information about call center offshore outsourcing, a few pros and cons of offshore outsourcing, as well as a “best of both worlds” solution that many companies can benefit from. This blog post can be a helpful first step when deciding whether or not call center offshore outsourcing is right for your company.

Call Center Offshoring Defined

Call center offshoring is the strategy of obtaining an external service provider located outside of the United States to operate and manage your call center. The external service provider typically takes care of hiring and training call center agents, maintaining call center software and infrastructure and managing day to day call center operations. Companies can outsource a segment of their call center operations (like support, sales, marketing, market research, engineering, etc.) or outsource the entire call center. Once the decision has been made to outsource their call center operations and the contracts are signed, many companies take a hands-off approach to overseeing operations and trust that their service provider will take the reins.

Pros of Call Center Offshore Outsourcing

1. Lower costs
Proponents of offshore outsourcing claim that it significantly reduces or eliminates the costs associated with running a call center. When call center operational, infrastructure, overhead and labor costs are significantly reduced (or being handled by an external service provider), the savings can be significant.

2. Eliminate staffing issues
External service providers typically handle all of the hiring, training, scheduling, and managing of a team of call center agents. This can save your company time, money and headache.

3. 24/7 customer service for a fraction of the price
Outsourcing call center functions often allow companies to provide 24/7 customer support at a price point that won’t break the bank.

4. Easily handle overflow call volume
Outsourcing part of your call center operation to a service provider (that is only responsible for answering overflow calls during periods of high call volume) can be an invaluable solution to a costly problem.

5. Increase business continuity
When your call center provider guarantees 100% uptime, has servers located in multiple geographic locations and has staff dedicated to making sure call quality is excellent round the clock, you can be more confident with their ability to meet your customer’s needs.

Cons of Call Center Offshore Outsourcing

1. Decreased customer satisfaction
A recent study conducted by researchers from MIT Sloan School of Management stated that call center offshore outsourcing results in a significant decrease in service quality and customer satisfaction [3]. This is like due to a combination of some or all of the factors listed below.

2. Linguistic and cultural barriers
Agents located overseas may lack the cultural knowledge, fluency and communication skills necessary to provide excellent support.

3. Decreased control over business functions
When outsourcing call center operations to an external service provider, you are putting vital business functions in a stranger’s hands. It may therefore be more difficult to monitor for quality assurance and put policies in place to help increase customer satisfaction.

4. Lack of company knowledge
Outsourced call center agents are often unfamiliar with company culture, practices and values. They therefore may not be dedicated to the company, devoted to the customer or provide a level of service that is in line with company standards and reflects the company culture.

5. Focus of agent may be divided
Call center agents who work for outsourcing companies often are assigned to make and receive calls for multiple clients. Therefore, their attention and time may be divided and they may never be 100% devoted to (or passionate about) your company.

6. Lack of collaboration and communication between agents and departments
Often, all of the agents who make and receive calls for a single company do not work in the same building and likely do not have the means to communicate with each other. Thus, collaboration and communication between agents and departments is limited.

7. Hidden costs
When outsourcing call center operations, there are often hidden costs that can be overlooked. Costs associated with unforeseen legal issues, hiring a lawyer who is well versed in international law, losing customers due to poor customer service and the cost of re-acquiring lost customers can all significantly impact your bottom line.

8. Security and privacy concerns
Overseas call center agents are often not subject the same background checks that US-based agents are. Thus, confidential or sensitive information may be less secure than with local agents who have undergone a strict background check.

A Best of Both Worlds Solution

If outsourcing your call center operations to an overseas provider seems enticing, but not worth the risk, you should consider a simpler, more cost effective solution. Hiring a team of global call center agents who work remotely can be a “best of both worlds solution”. It can allow you to leverage some of the advantages that make outsourcing call center agents so luring and also mitigate the disadvantages associated with outsourcing.

With the advent of new browser-based call center software solution, you can easily maintain a global call center workforce for a reasonable price. All that agents need to make and receive calls is a computer, headset and an internet connection. They can work from home, undergo all training online, learn how to use the call center software in minutes and start making and receiving calls on day 1. Another critical advantage of hiring global at-home agents is that you have a larger applicant pool as you are not limited by geographic location or transportation issues. Thus the top candidates are better educated, have more experience and are often more flexible than their on-premise local counterparts. You can also select candidates based on cultural fit with your company, language and communication adeptness and other factors that you deem important. Thus, by expanding your team globally, you can see quality increase.

In addition to hiring more skilled agents and allowing them the freedom to work where they would like, browser-based call center also allows for managers to keep a close eye on their global workforce and provide real-time feedback when necessary. Managers can listen and drop in on live calls and whisper coach the agent without the customer knowing. They can keep track of agent performance using real-time and historical reporting and keep their entire team on the same page with real-time updates, automated tasks and integrated CRM and helpdesk software. Managers can also ensure that the right agent receives the call every time with IVR, skills-based routing and call queues. Additionally, with pay-as-you-go options, the ability to add and remove agents in seconds and SLAs that guarantee call quality and uptime, you’ll have everything you need to provide quality service at an affordable price.

This new call center software allows for a simple, more cost effective solution to hiring and managing a team of global call center agents. It is a “best of both worlds solution” to a problem that has garnered a lot of attention and has industry giants taking a stance.