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Call center outsourcing 101: Top 10 buzzwords


Call center outsourcing is becoming a popular alternative to the on-premise, in-house call center. Organizations looking to cut call center costs, address staffing challenges or shift the focus to other areas of their business frequently consider outsourcers for customer-service support. These 10 terms will give you a clear understanding of the fundamentals of call center outsourcing.

Table of Contents

Call center outsourcing 101: Top 10 buzzwords
1. Nearshore outsourcing
2. Onshore outsourcing
3. Offshore outsourcing
4. Globalization
5. Virtual call center
6. Total Cost of Outsourcing
7. Business process outsourcing
8. Service-level agreement
9. E-outsourcing
10. Core competency 

Call center outsourcing 101: Top 10 buzzwords

Nearshore outsourcing is when an organization outsources work to a neighboring country. For example, a company in the U.S. might outsource work to Canada or Mexico. Nearshore outsourcing is practical for many organizations because the geographical proximity between the company and its outsourcer means that travel and communications costs are less expensive and people are more likely to speak the same language.

  • Learn if outsourcing is right for your call center in this expert face-off.

    Onshore outsourcing, also known as domestic outsourcing, is when an organization outsources work or has services provided by another company within the same country. Onshore outsourcing is typically preceived as more expensive than nearshore and offshore outsourcing.

  • Read about the challenges of call center outsourcing.

    Offshore outsourcing is when an organization outsources work to an area of the world where labor costs and taxes are much lower. Offshore outsourcing has its pros and cons. It is typically less expensive than running a call center in-house, but there can be trade-offs in terms of customer service and security. Those who object to outsourcing also argue that if an outsourcing relationship doesn't work out, the cost of bringing operations back in-house down the road is often higher than the initial savings.

  • Learn how to calculate the cost of offshore outsourcing.

    Globalization refers to the tendency of businesses and technologies to spread throughout the world. In theory, globalization would create an interconnected marketplace that is unaffected by time zones and national boundaries. The practice of outsourcing call center operations is one example of how globalization impacts the way businesses function today.

    A virtual call center is a call center environment where the call center agents are located in different areas around the world rather than in one physical location. Outsourcers frequently run several different virtual call center operations for a number of organizations.

  • Find out how one company is using virtual call center software to streamline its customer service operations.

    Total Cost of Outsourcing (TCO) is similar to the "total cost of ownership," except that it focuses on the cost of outsourcing in particular. The TCO includes labor costs, service fees and the cost of implementing, managing and maintaining the relationship with the outsourcer. The TCO can include the cost of training staff and purchasing additional technology that is needed to monitor and manage outsourced employees.

  • Learn how outsourced Indian contact centers are managed.

    Business process outsourcing (BPO) is when an organization contracts a specific task to a third-party provider. Usually, BPO is used to save money on tasks that the company requires but does not depend on to stay competitive in the market. BPO is often divided into two categories: back-office outsourcing, such as billing and purchasing, and front-office outsourcing, which includes customer-related support.

  • Find out how on-demand CRM can help organizations using BPO .

    A service-level agreement (SLA) is a contract between a service provider and a company that addresses what services the provider will supply. Information service (IS) departments in many enterprises now write SLAs to keep track of and measure the services provided to the company by outsourcers.

  • Get tips for preparing a SLA for call center outsourcing.

    E-outsourcing is when a business buys IT products or services over the Internet instead of creating and deploying them in-house. For example, an organization might hire an application service provider (ASP) to provide certain back or front-office applications instead of creating and installing these applications on their own. E-outsourcing can help organizations get up and running faster than if they tried to deploy the technology in-house.

    A core competency is an expertise or ability an organization has in a specific area. Many companies outsource non-essential areas of their business so they can focus their time and resources entirely on their core competency.


    Take the call center outsourcing quiz.

    Buzzword definitions provided by


This was first published in June 2008

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