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To outsource or not to outsource: is that even the question?

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21st Sep 2007
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When should you outsource your call centre? It’s a conundrum facing more and more businesses every day. But Rob Lewis argues the question could be masking an even trickier issue: how to make call centres more effective - wherever in the world they are.

By Rob Lewis, staff writer

Taking your contact centre out-of-house is considered to be a major transition in the CRM world, something that spells death or glory for your brand. In reality, all contact centres face the same challenges – it’s just whether you choose to take them elsewhere that makes the difference.

The continued growth of outsourcing means every business or customer relations professional needs to take a view on it. Strange, then, that so many companies don’t have a set policies on the matter. Recent research found that only 19 percent of US businesses had an outsourcing strategy and the situation in the UK is hardly fairing any better.

"We wouldn’t argue that customer contact is always necessarily best done in-house but the thing to recognise is that customers have a choice." Mark Bramley, head of sales and service, First Direct

Some sectors, of course, have answers to the outsourcing argument from the outset. Financial services, for example, would face shareholder revolt if they ignored the potential cost savings on offer. However, that doesn’t mean they necessarily endorse it.

First Direct is a rarity amongst British banks: a business that has not only decided to keep its contact centres in the UK but in-house as well, a policy on the firm’s agenda since it was founded in 1989. Despite this, it’s quick to refute the notion that it is some sort of anti-outsourcing champion – after all, it’s never tried it.

“We wouldn’t argue that customer contact is always necessarily best done in-house but the thing to recognise is that customers have a choice,” says Mark Bramley, head of sales and service at First Direct. “We know that our call centres work for us.”

This is rumour control

If First Direct’s contact centre policy is unusual, its apparent modesty over publicising that policy is equally striking. It’s a sign of how legitimate and fundamental outsourcing has become to the business world. In fact, far from blowing his corporate trumpet, Bramley seems keener to dispel some of the myths that still surround taking the brand out-of-house. For example, while he’s careful to point out that in-house centres allow you to apply your own recruitment standards, he doesn’t believe outsourcing means a de facto lower quality of staff.

“I know a lot of outsourcing organisations that have put a lot of effort into making the customer experience as good as it can possibly be,” Bramley says. “The success we’ve had isn’t just because we’ve got in-house call centres. It’s about the type of call centres they are, the training and investment we’ve put into them, the reward and recognition schemes we’ve initiated, our recruitment efforts, and the fact we can offer competitive products.”

Bramley is justified in referring to First Direct’s success. According to statistics from market research firms MORI and NOP, the company has been the most recommended bank in the UK for the past 13 years. Its customer satisfaction levels are far higher than many organisations that can meet their market face-to-face, which suggests it is doing something right.

So, is this a case for the ‘if-it-ain’t-broke-don’t-fix-it’ approach to outsourcing or something more? “We do an awful lot of customer research and we know what our customers want,” Bramley concludes. “We could take the cheaper option and outsource but for us, that would be commercial suicide.”

Quality is universal

While in-house activity is core to first direct, keeping things inside the company doesn’t a guarantee a level of quality, any more than outsourcing means satisfaction has to nosedive.

Phil Morris, chief executive of outsourcing consultants Morgan Chambers, is in agreement. “The tenure of the people providing the service is irrelevant,” he says. “The nature of the service they’re providing and the controls around that are what is actually relevant. It’s not about whether they are paid by an external organisation; if you’ve got them measured and motivated in the right way then it will work.”

"It’s not about whether they are paid by an external organisation; if you’ve got them measured and motivated in the right way then it will work." Phil Morris, chief executive, Morgan Chambers

All too often, it is not something people actually consider. In this context, the in-house versus outsourcing debate is a distraction from the real issue – how to make contact centres function properly in the first place. While it’s easy to count up your savings, achieving the metrics and management techniques needed to achieve real performance are still very much in development.

Inbound call centre metrics have drawn fierce criticism from commentators such as Professor John Seddon and outbound metrics barely exist. “I don’t think they’ve ever been got right,” says Morris.

It doesn’t help that there’s a political and popular climate that prevents collective debate. “There’s been a hell of a lot of negative press coverage over the years,” admits Bramley, and all of this despite the fact most economists don’t view outsourcing as a threat to the economy of any country in the world.

Many companies refuse to speak to journalists about contact centres full stop and those few voices speaking up from outside the corporate world, such as consultants like Professor Seddon, have little praise for the status quo.

If any company is to perfect its customer contact strategy, this subject needs to be a matter that can be openly discussed in the business world. Whatever the terms of the contract, in reality, outsource providers are facing the same knowledge gaps their customers do.

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

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