The outsourcing conundrum

Outsourcing customer service functions has become increasingly common - but research suggests that many projects fail. So what is going wrong?

By Mike Saar, Corizon

The outsourcing of customer service functions has become an increasingly common phenomenon across retail, telecoms and financial services companies in developed economies as they look for ways to reduce overheads and improve service levels. This has meant boom time for the outsourcing providers - analysts Gartner predicting that the market would be worth over $12billion by year end 2007. But Gartner's research also suggests that up to 80 percent of customer service outsourcing projects are destined to fail.

Part of the reason for this is that some outsourcers never fully get to grips with the complexity of the customer service functions they take on. This is particularly true in call centre environments where what may be seen as a simple business process is actually underpinned by a series of relatively complex tasks that the agent must complete. Each sub-task typically involves using a different IT system – recent research from Contact Babel indicates that a typical contact centre uses an average of six applications on a call.

For example, when a customer calls in with a query about their phone tariff, the agent has to go through a multiple stage process. First, they will have to identify the customer and fulfil Data Protection Act requirements. Then, they need to orientate the customer through technical, CRM and billing systems, and check the intranet for current tariff and price plan information. In total, just to get to this stage of the call, an agent may need to interact between anything from four to six systems on average, and often more than 10 systems if complex diagnostic work needs to be done.

At this point, the agent's role will require they 'upsell' additional products, price plans and so on to the customer, which in turn requires that they access the intranet and provisioning systems for the relevant information, special offers information, and purchasing systems before finally reaching the 'wrap' stage. The wrap stage involves capturing relevant customer history, actions on the account, time/date stamps and the agent ID. Whilst this may not be rocket science, it's clearly much more than a matter of just being guided through a simple set of pages and flows. There’s a maze of copying, pasting, juggling and switching from application to application.

There are three key areas where this has an implication. First, it becomes difficult for the organisation looking to export their customer service function to even define a business process without a clear map of user workflow at the desktop. Secondly, it is expensive and time consuming to train staff at the outsourcer to navigate a maze of applications. Finally, desktop complexity makes it difficult to provide quality assurance and monitor service levels for audit or performance assessment purposes.

Thin-client remote desktop technologies are frequently seen as the answer to this issue. From a technical perspective, this is relatively straightforward – a remote desktop server can provide the same applications in an outsourced call centre that you had in-house. But this does not make the desktop complexity issue go away – and therefore the outsourcer will still have to invest in training its agents in an inefficient process. It is unlikely you will want to provide your outsourced agents access to all the functions and data you might make available to in-house staff.

Addressing the core issues

This implies that the core issue of desktop complexity must be addressed – either by the outsourcing provider prior to taking on the customer service business function, or by the organisation itself prior to engaging with an outsourcer. It is key to understand the processes that are being outsourced in detail so that they can be simplified for the agents as far as possible.

One way to do this is to embrace a "user process analysis" approach, working backwards from the desktop to establish what workflows and processes the most experienced and effective agents use. This provides a blueprint for how to bring the information and functionality needed by agents together in the best way to support customer interactions. Whilst this may seem like an obvious approach, this kind of user down methodology is rarely applied, with IT usually taking the actual technology (and what it can do) as the starting point.

With the blueprint clearly defined, the next stage is to change the way that IT systems are presented to all agents to reflect this. The key here is avoid large development projects and to build in future proofing so that functionality can be continually reconfigured and tuned to the needs of groups of users. This doesn’t mean ripping out existing applications as they are in all likelihood doing a perfectly good job. Instead, the challenge is to combine and sequence the relevant parts of different applications to better suit the needs of agents performing specific tasks.

This has only recently been made possible with the advent of new technologies which separate the useful parts of all the applications in use and reassemble them into a unified interface for presentation to the agents. The agents see a single, 'thin-client' application that resembles the original applications but has the functionality pulled together to map alongside key business processes – so no more copying, pasting and switching between applications is required.

By allowing the assembly of this desktop to be achieved without complex programming, it can be easily redefined to support new user groups and applications – to support new product rollouts, for example, or restrict access to sensitive data for outsourced agents. This approach also gives the necessary transparency and process monitoring support required to allow you to establish if your customer service outsourcing efforts are having a positive impact on your business’ bottom line.

Customer service outsourcing is an increasingly necessary part of managing many modern businesses. But transferring complex and ill-defined business processes and a morass of desktop applications to another company simply passes on the problem, whilst inviting additional risks and poor results.

Given how sensitive the quality of customer service offering is in the telecommunications sector to customer retention, this is a key concern for modern CIOs tasked with maintaining profitability through application of IT. Taking the reverse approach of working back from what you want agents to actually do, and employing a single composite user interface to guide agents through their work can reduce the complexity and increase the transparency of CSO, ultimately making the business function more efficient and preserving the bottom line.

Mike Saar is business consultancy director at Corizon

www.corizon.com