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MyCustomer.com

The changing face of the call centre outsourcing sector

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13th Sep 2007
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The call centre outsourcing sector has come a long way in the last decade. MyCustomer.com takes a look at how it won the business world over and talks frankly to those who know best about the past, present and future of the industry – the service providers themselves.

By Neil Davey, editor

It seems strange to think that call centre outsourcing was ever a niche sector. But going back to the early 90s it was a nascent industry populated by only a handful of large players and used by few outside of the large multinationals. Flash forward to the modern day and it’s a vast sector with firms of all sizes utilising services from a myriad of providers. Even the services themselves are barely recognisable.

“In the early days, call centre outsourcing was a relatively niche sector, dominated by a few large operators such as Sitel. The concept of outsourcing a call centre facility was not well-known and consequently was used typically only by large blue chip companies,” says Dino Forte, director at Converso Contact Centres.

Dino Forte"Many of the outsourcing pioneers had to learn by trial and error about the complexities of providing high quality services whilst at the same time managing customer expectations." Dino Forte, director, Converso Contact Centres

Still in a nascent stage and with no business cases or experience to learn from, the sector had to feel its way for several years. “Many of the outsourcing pioneers had to learn by trial and error about the complexities of providing high quality services whilst at the same time managing customer expectations," Forte continues. "This was exacerbated by the fact that they did not have the same technology at their disposal, so were relying on many antiquated manual and paper-based methods.”

Whilst technology was certainly an issue, there was a greater challenge facing the early service providers. “Going back to the 90s, the lack of awareness of how to use outsourcing was probably the biggest issue,” explains Cormac Twomey, UK managing director of TeleTech. “Companies didn’t know what role it played, or how to get the greatest advantage from it. A lot of the challenges at that time were about how outsourcing worked, how firms contracted for it and how it could be measured.”

Faced with the task of touting this new concept, convincing companies that a provider could represent their brand with the same dedication as themselves was a particular challenge. “In the early years outsourcing was seen as an action of last resort and was therefore largely tactical such as outsourcing overflow volumes or short-term contacts to manage business peaks,” adds Mike Purvis, UK MD of Transcom. “This prevented the outsourcing providers from adding any real value to the operations and prevented the clients from releasing the true value of the partnership.”

Technology boom

However, the information technology boom of the 90s, spearheaded by the internet, was to revolutionise the telecommunications sector. For call centre providers, the number of services that could be provided began to swell. Casting an eye over the technology that is at the disposal of the modern outsourced service provider, it is easy to forget the radical changes that have taken place.

“One of the most obvious differences between providers today and early providers is the technology that is now available, and not only technology that is used to contact customers, but also that which is used within the contact centre,” says Ann Sinclair, programme manager, customer experience at Fujitsu Services.

Mike Purvis"In the early years outsourcing was seen as an action of last resort and was therefore largely tactical such as outsourcing overflow volumes or short-term contacts to manage business peaks." Mike Purvis, UK MD, Transcom

“For example, agents can now access a much wider range of information about their customers to help them deal with complex queries. IVR has also improved immensely so that it is much more intuitive for customers to use, and also makes it easier for them to make simple queries like checking account balances. Agents can also use technology to deliver a better experience to customers. For example, e-mail, SMS and remote control technologies can all play a role in making it as quick and easy as possible for customers to resolve problems, as well as ensuring they have the information they need should a problem re-occur.”

Meanwhile, the improvement in pan-continental communications ensured that offshore and nearshore locations became popular options for those firms looking to outsource their call centres.

Technology alone, however, would not be enough to win the confidence of the market at large. “The service provision industry hasn’t won the hearts and minds, it is more of an acceptance of the value of it as a business tool – as an option that can be used to address the challenges of the objectives that firms face,” says Twomey.

Forte suggests that this has been aided in no small part by the growing maturity of the suppliers. “As the industry has matured, the quality and professionalism of suppliers has also improved dramatically,” he says. “For example, quality controls detailed in contracts and service level agreements have helped to boost accountability and transparency between the outsourcer and the company they were working on behalf of.”

“The principal difference is that outsourcing is now seen as a strategic initiative and not just a tactical way of reducing costs, although this is still one of the principal drivers,” adds Purvis. “Organisations outsource to achieve a number of other objectives such as improvement in service, avoidance of capital expenditure, certainty of budgeting by moving variable costs to a fixed contracted cost and moving the risk of transformation to the outsourcer. To meet this challenge outsource service providers have had to become more sophisticated in the way they contract business and conversant with the organisational and industry issues each client is faced with. In short they have had to become experts and not generalists.”

What will and won't change

And looking in their crystal balls, what do the service providers see for the future of their businesses and sector? “The industry is at a transition point at the moment,” says Twomey. “But the conversations that are being had today are around creating the personalisation that is presently missing in the customer experience. In the traditional contact centre environment you may have several thousand advisors and so if you rang that number today, the chances that you will reach the same advisor twice are very slim.

"The conversations that are being had today are around creating the personalisation that is presently missing in the customer experience." Cormac Twomey, UK managing director, TeleTech

"That engenders a lack of engagement at agent level. Are they really engaged in solving the issue if the likelihood of dealing with that person again are so remote? So it is a matter of creating that link between customer and frontline employee so that there is ownership of the service and solution. Wouldn’t it be great to know that you can call back and there is an 80 percent chance you will speak to someone on the same team and a fair chance you will speak to the same person? That would provide a different kind of experience. So service providers are very much moving to that kind of place.”

Purvis sees other possibilities in the future. “The evolution of outsourcing will involve organisations starting to outsource the effect of customer contacts and not just the contact itself,” he explains. “As an example outsourcing service providers will be incentivised and ultimately paid on driving customer satisfaction and revenue per customer not on how many contacts they answer and how quickly they can process these.”

But not everything will evolve as rapidly as the contact centre service provider sector has over the last decade.

“The main thing is what is not going to change, and that is that people will still want to deal with people,” concludes Mark Kirby, managing director of GoResponse. “We have had all these scare stories about how the internet will change things, and that people will not, for instance, want to buy mail order over the telephone. But every time there are these changes in consumer technology, the one constant is that people still want to deal with people.”

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

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