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Sykes Exec Gives Advice on Outsourcing

Sykes Exec Gives Advice on Outsourcing

November 15, 2010
By Brendan B. Read, Senior Contributing Editor

Outsourcing or business process outsourcing (BPO) contact center services is receiving arguably greater attention as a strategy and a tactic in this slow-moving economy, for it offers a means to cut costs and improve service and sales and revenues with the flexibility to scale up and down: without the burdens of capital and direct operating expenditures.


At the same time there are caveats with outsourcing. Chief among them is entrusting organizations’ most viable assets: their customers to third parties, i.e. will their agents be as effective to maintaining and building relationships as one’s employees. There is also the issue of which “shore” -- onshore, offshore/nearshore -- and at home for outsourced programs to land on and be handled.

To get a handle on outsourcing’s whys and hows, TMCnet recently interviewed Michael Clarkin, vice president of marketing for Sykes, one of the best known third-party contact center firms.

TMCnet: What contact center functions and programs are best suited for outsourcing? Which ones should remain in-house?                                                                             
MC: Rather than focus initially on specific functions and programs, it’s wise to take an honest and objective look at the company as a whole. Is it prepared from an operational and cultural perspective to set up an external operation as an extension of its own in-house team? Once these hurdles have been overcome, it’s safe to begin identifying functions and programs to be outsourced. Business functions that can be successfully outsourced share three common characteristics:                                            

A. A well-defined processes or workflow

Without this, a successful transference of a business process to a provider with a lower cost structure stands little chance of succeeding. If the processes are well defined and the skills well understood, then hiring, training and operating is very transferable to another provider, even if the work is sophisticated. 

B. Any work that is not "core competence”

Core competence is about skill, not strategic importance. Even if a particular function or program is highly strategic, if the company doesn't possess the depth of expertise and experience at it, finding an expert outsourcing partner is a good strategy. 

C. Any task that has proven to be difficult in terms of hiring and retaining staff

For example, in technology companies, customer tech support is often an entry-level engineering job, and most engineers would rather get promoted to something more strategic, such as a QA or designer job. However, for an outsourcer, those tech support jobs can be very high-end—a position that reps aspire to, and will stay for a long time. If the external provider can hire and retain better than you can for a given role, that role is a good candidate to be outsourced.                                                                                               

TMCnet: What BPO programs are best handled onshore, at (a) formal contact centers or (b) home-based agents, and which ones are ideally suited for offshore?

MC: You can look at processes and programs and use them to determine the appropriateness of outsourcing, but making a decision regarding on/offshore depends largely on the readiness and preparedness of the company to embrace the idea that an external party is part of the company as opposed to competitor to the company.  The criteria for deciding whether to choose onshore or offshore can have several factors to consider:

Does the company have a global “cosmopolitan” view that allows it to embrace the distance and cultural differences between the company and the offshore center? The most important factor to consider is how much communication, management, and new processes need to be put in place to be able to treat an offshore location like you would one that is closer in distance, time and culture. For a business process that is new, evolving, being developed or reengineered, sometimes having that team down the hall or across town is valuable, so that you can have your staff there if needed.

Be careful of the assumption that onshore gives a better customer experience than offshore. The data comparing on and offshore contact centers Customer Sat scores in an apples/apples basis usually comes out equal, or offshore better. Call center jobs are more appealing to candidates in most offshore locations than they are domestically, which means a higher education level and talent is often available and interested in taking on these roles. For those locations, these are jobs where an employee can exercise both education and language skills, get global job experience, and work in a field with more prestige than it might have in small town USA.

Home-based agents work great for a couple of different applications. For processes that require a unique skill or profession, but the candidates for those positions might not be so interested in the call center work environment, at home opens the candidate pool. Think about licensed insurance agents, certified nurses, CPAs or lawyers. It is also great as part of blended solution, so if there is consistent base of customer demand or calls, but peaks due to seasons, events or other external factors, at-home agents are an easy-to-train, flexible workforce since so many of these kinds of employees work part-time and don't have the burden of having to drive to work.

TMCnet: If an organization is considering sharing the same functions that it handles in-house with an outsourcing firm e.g. spreading the load, after-hours, seasonal what are the best means of ensuring that the outsourcer performs at least as well as the in-house center(s)?

MC: Is the company prepared to invest in developing a third party's capability to behave like an internal organization? This includes both training staff and delegating a level of trust by creating a layer of management infrastructure that's different from the in-house operation. Successfully transferring operations to an outsourcer requires well documented processes that lend themselves to smooth adoption by your external team. Any vendor who provides good value for money will help you do so. The two key factors that ensure comparable performance are: 

A. Invest in training and certification of staff

Outsourced operations often underperform because the in-house skill was retained in tribal knowledge, and so doesn't transfer well. Making sure all of the tribal info gets into formal training, and then verify that the outsourced team has practiced and truly learned how to perform each and every task—not just the common tasks, but also the exceptions.
 
B. Delegate the same authority and permission

If in-house staff has the latitude to waive a fee, grant a reprieve on payment, or simply handle a complaint without escalating, then the same authority must be part of the outsourced process. Customers are very sensitive to those differences, and will complain quickly if a rep isn't empowered to solve. They will assume that the rep isn't trusted enough to handle, and the rep will assume the same and behave less an advocate of the customer, and more a victim of the policy or process. The ability to analyze, redesign and improve processes for how your customers are treated is a differentiator among outsourcing providers. Lots of companies can mimic your processes, but are they helping to improve them and behaving as a true strategic partner to your business?  


Brendan B. Read is TMCnet’s Senior Contributing Editor. To read more of Brendan’s articles, please visit his columnist page.

Edited by Tammy Wolf



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