Q

When to outsource call centers

Contact center expert Donna Fluss outlines the advantages and disadvantages of outsourcing contact centers, and which contact centers to outsource.

What are the main benefits/disadvantages of outsourcing my call center? What types/sizes of call centers should outsource?

This is a very complex question and the answer will vary based on many factors, such as whether you are building

your first call center or considering moving an existing one to an outsourcer. Another consideration is the purpose of the call center – if your call center is mission critical and/or addresses highly sensitive information, outsourcing is highly problematic. If your call center handles mostly generic transactions, then outsourcing could be a more practical solution.

Assuming you already have a call center today, the main reasons to outsource are:

  1. To reduce operating expenses – you'll need to save more than 15% to 20% annually to make it worthwhile. (Cost savings is the primary reason that companies outsource.)
  2. To find expertise or technology that does not exist within your own company – if an outsourcer has great depth and expertise in the types of transactions that your company handles.
  3. To provide additional resources that your company is not able to find –many times companies outsource because they cannot build and staff a contact center quickly enough to address a need.
  4. To provide back-up or contingency – this may include providing after-hours live support that is not available in your current environment or as back-up to handle an unexpected surge in call volumes.
  5. To get certain assets and full-time equivalents (FTEs) off your books.

The main reasons not to outsource are:

  1. Outsourcing could present major confidentiality risks to your company and you have no way to guarantee security of customer information or company resources.
  2. Customers will not tolerate an outsourcer – using an outsourcer will drive customers away.
  3. Outsourcing will cause a great deal of bad PR and result in a large number of lost customers.
  4. The company cannot find an outsourcer that is a good match in terms of technical expertise, culture, work ethic and/or language.
  5. It will cost more to outsource than to keep the activities in-house. (Look at costs over a five-year period)
  6. The call center is so integrated into other business activities that outsourcing will negatively impact these other operating areas and disrupt the business operation.

Organizations that probably should not be outsourced are mission-critical functions or activities that are tightly integrated into other business activities. Otherwise, anything else can be outsourced, under the right circumstances, regardless of the size of the operation. Whether or not these operations should be outsourced then becomes a matter of management priorities and cost.

This was first published in April 2006

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