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Switching on to offshoring

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7th Sep 2007
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Companies may be put off by the negative publicity surrounding offshoring but it also means they could be losing out on some of the benefits it can bring. Louise Druce looks at how firms can be more successful abroad.

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By Louise Druce, features editor

The backlash against Indian call centres that has seen many offshorers returning to the UK might be enough to make businesses nervous about moving customer operations abroad. But if you do your homework, there are a wealth of advantages still to be had overseas.

While it’s true that the amount of new work going offshore is slowing, according to a recent state of the industry report by call-centre experts ContactBabel, it is not having the negative effect on the UK call centre industry that many critics predicted.

The biggest mistake outsourcers still make is seeing offshoring as merely a cost cutting exercise when destinations such as India are now experiencing the same problems UK call centres had before the boom in outsourcing – namely soaring levels of staff attrition and higher prices. 'Quality' is now the buzzword.

Before moving operations to any part of the world, firms need to find an outsourcer that fits with its products and business needs. “Decisions based solely on cutting costs can actually create more costs, more work and cause far more headaches to the organisation in the long run,” explains Mark Kobayashi-Hillary, offshore director of the National Outsourcing Association.

“As organisations start to look beyond costs as the only defining factor when choosing an outsourced provider, they are better able to match their processes and the skill level required by agents.”

What should you move overseas?

Despite the controversy, customer care and technical support have been offshored successfully. Cliff Justice, managing director, globalisation, of outsourcing expert EquaTerra, says determining the scope of globally outsourced functions includes the availability of skills and capability in the destination market, as well as language, infrastructure and management requirements.

Choosing the right destination can be difficult. Somewhat undeservedly according to some, India’s reputation has suffered as a contact centre destination, with many UK firms heading back home in the last few years.

Checklist
before entering into a contract:

• Ensure end-to-end in-house processes are right to avoid widening gaps.
• Keep some ownership or lose control over the customer experience.
• Ensure the right resources are in place on both sides of the agreement.

You don’t hear so much about Eastern Europe, South Africa or China, all rapidly garnering a bigger share of the outsourcing market. But partially due to the negative press surrounding off-shoring, a recent poll by Mintel found that especially when it comes to personal finances, 82 percent of consumers would prefer not to speak to someone overseas.

Misunderstandings and security fears were cited as the main factors, despite a lack of evidence to show these problems are any more rife than among UK counterparts. However, the customer is always right after all and in a competitive call centre market, end users can’t run the risk of alienating their customers through a perceived lack of poor service.

“It is the customer experience that people remember and through which customer satisfaction can be driven,” says Kobayashi-Hillary. “Increasingly, organisations are realising the value of keeping high-end customer facing functions in their domestic market or near-shore.

“In response to the consumer backlash, there is a trend towards multi-shoring, which makes it much easier for organisations to match individual customer contact solutions with specific locations.”

When multi-shoring, however, firms must make sure they build and can maintain strong relationships with vendors to make sure it can be implemented successfully without losing control. Other risk factors to consider, suggests Justice, are distance and time zone differences, culture and language, familiarity with the legal system, geopolitical risks and economic stability in the chosen location.

When choosing an offshore service provider, firms need to know they can deliver not just on the frontline but also technically. For example, the transition to the new location, delivery team capabilities, data and voice communications as well as infrastructure, network integration and security all need to be look at in-depth. Justice recommends a site visit (see checklist box out below).

Proof it can work

Ambition 24hours, a specialist in personnel recruitment and management for the healthcare and education sectors in the UK, off-shored to South Africa after finding it difficult to recruit staff at home.

After scouring for destinations, the company settled on Cape Town due, among other things, to the time zone benefits, cultural alignment that related to customers and the lifestyle it could offer both UK staff moving out there and potential employees from across the country.

Checklist for site visit evaluation:

• Overall delivery capabilities
- work effectiveness
- infrastructure/scalability
- safety and security
• Management of operations
- management team
- language/cultural barriers
- hiring/retention
• Workplace culture
- synergy among teams
- long-term realities
- quality assurance

“It was a brave move because we’re not a huge company like a bank,” says Nick Rea, operations director at Ambition 24hours. “Having made the decision, we flew to South Africa to look at similar operations that sold products back to the UK.”

The back-office operations were the first to be outsourced. Once they were up and running efficiently, the call centre went live. Although, attracting and training the right staff for the switchover to VoIP took some effort. “We find it easier to recruit now we’re established,” Rae adds.

“Job security is very important in South Africa. In the UK, there are high turnover rates in call centres but you can get a job fairly quickly. We had to show potential staff we were a solid organisation and the right people to work for.”

He believes the secret to success is rewarding staff. The company pays over local rates and even though it has made cost savings, most of it is being ploughed back into the company to reward staff and improve customer service. For example, the company is currently installing a gym, something Rea says would be difficult due to space and rents in the UK. He believes added value means happier staff, which in turn means more productivity and better retention rates.

There have been challenges, as Rae freely admits. Initially, there was some apathy from customers who were used to dealing with a specific call agent in the UK and public transport for staff has been an issue. Costs have been higher for building and staff security as well.

When recruiting, the company also had to consider accents “more acceptable” to the UK market, although Rae adds the firm made it a policy never to lie about where the call centre was located.

Overall, though, the experience and customer feedback has been positive for Rea. He agrees that for those considering off-shoring, it is important to make sure the type of work the off-shorer does relates to the business function you want carried out, and not to presume that a project that wouldn’t work in the UK would automatically work somewhere cheaper.

“If you have an outsourcer who is only dealing with outbound product sales, they might not be able to do anything more complex,” he explains. “Also look at their financial status: do they have the resources to run a campaign and to continue to run it once it is off the ground?

“You need to deal with an outsourcer that understands your market and can advise you on what can and can’t be done,” Rea adds. “For people getting off the ground, don’t look at outsourcing as purely a cost-saver. It’s about giving something back to the customer and improving the service all the way through.”

Do’s and don’ts checklist
  • Have a single point of contact for the provider. They would be experienced, knowledgeable, analytical and able to make decisions on behalf of others.
  • Provide good forecasts of contact arrival volumes and distribution patterns.
  • Be cautious and lean towards overstaffing early on as some won’t meet standards.
  • Consider the transition in phases. It’s likely to take new agents 60-90 days to gain proficiency.
  • Be involved in agent selection process and ensure needs are aligned with provider and the transition timeline.
  • Make sure there are good training materials, role plays and adequate resources and support. Consider added time and costs of training the trainer.
  • Set testing milestones for technology being transitioned or implemented with internal team.
  • There is nothing worse in a new call centre than inexperienced staff and inaccurate forecasts. A lack of preparation will lead to angry and exasperated customers.
  • Don’t overload agents from the offset.
  • Hiring for the sake of it makes it difficult to let go of and replace under-qualified staff once employed.
  • Don’t treat the new team as a vendor. Save criticisms for senior management while encouraging and supporting teams.
  • Ron Abel, managing director CRM, EquaTerra

Read more features, practical case studies and white papers about contact centres.

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