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Contact center outsourcing: Friend or foe?

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The pros of virtual call centers still up for debate

Virtual call centers provide agents and companies with flexibility and potentially lower costs. But can they provide equal or better customer service?

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Modernization in today's contact centers

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Contact centers may be moving to virtualization for their software, but virtualizing their people causes some hesitation.

A report from Cambridge, Massachusetts-based research firm Forrester Research Inc. predicts that 43% of U.S. workers will be telecommuters by 2016, but if call center managers have anything to say about it, their virtual call center agents will be employees, not independent contractors.

One of the biggest problems with virtual call center teams is that they often aren't as committed as full-time employees, according to Ian Jackson, managing partner at Long Beach, California-based consultancy Enshored Inc. "Workers who have committed to working in a virtual environment are then often juggling multiple conflicting commitments by working through crowd-based labor markets," he said. "Today, someone else may be paying slightly better so they are not available to you."

One company Jackson worked with, an online coupon company, switched from U.S. home-based part-time agents to a dedicated full-time team in the Philippines and immediately saw productivity, quality and reliability increase, he said.

In-house call centers still foster higher productivity

Austin, Texas-based online storage marketplace SpareFoot recently switched from an in-house contact center augmented with third-party agents to a 100% in-house model comprised of 45 agents. The goal was primarily to provide a more consistent experience for customers, according to Josh Lipton, the company's vice president of technology.

One of the biggest problems with virtual teams is that they aren't as committed as full-time employees.

"No matter what you try to do … you can't replicate the intangible experience of being part of a company and caring deeply about the customer. You're kind of a mercenary. Mercenaries can perform at a high level, but they really don't care about the battle," he said.

But in addition to everyone drinking the Kool-Aid, so to speak, SpareFoot also found that having a team that was able to bounce ideas off one another and be onboarded quickly because they were in one location helped agents to exceed previous metrics. For example, one revenue metric measured by SpareFoot is the percentage of customers that make a reservation. That number is up 30% year over year since SpareFoot went all in-house 10 months ago, Lipton said.

Dedicated employees are key to virtual call centers

Companies that have moved to virtual agents find that they have the most success with employees, as opposed to freelancers working for a third-party contractor. Seattle-based NetMotion Wireless instituted a virtual option for some of its contact center staff, particularly its overnight workers. Not only is it easier for the telecommunications company to recruit overnight workers, it also saved the company money on HVAC (heating, ventilation and air-conditioning) costs overnight, to the tune of $150,000 per month, according to Clarence Foster, director of customer support.

Hiring virtual employees expands the talent pool available to NetMotion, which because of its Seattle location finds itself competing fiercely for workers. "If you're a smaller company, that's a nice edge," Foster said. "I've talked to employees here and asked what it would take, pay-wise, for them to jump if they didn't get to work from home. It would take a 10% to 15% pay increase to do that," he added.

But to make it work, the technology needs to be in place. NetMotion has an agent in Pennsylvania who lost power after Hurricane Sandy, and because of the mobile VPN software used, the agent could put his laptop to sleep, drive to a hotel, and literally be back online taking calls in 30 minutes, according to Foster.

Additionally, tracking metrics is key to ensuring that agents perform at acceptable levels. Contact centers naturally have baked-in metrics, such as call time, when agents log in and which agent takes a call. "We have a pretty good team that is self-disciplined," Foster said. The company is gearing up for rapid growth and plans to expand its 30-agent pool within the next few years -- and continue hiring at-home agents.

Outsourced team augments existing contact center staff

Those that hire third-party agents find the most success when those agents are in a physical contact center and dedicated to the company's account. Using an outsourced provider gave SAP Latin America the expertise needed to run a contact center program, including metrics, and allows the team to scale up or down as needed, according to Adriel Sanchez, vice president of demand generation. But on the other hand, it's harder to align third-party agents with the sales team, and that's just with dedicated agents, he said.

For more on this topic

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SAP has a diverse and constantly expanding software portfolio, and agents need to, at the very least, be in the same physical location to stay on top of training, according to Sanchez. Often, the contact center is the first touchpoint for new SAP Latin America customers. "The first interaction is important, and that individual needs to know how to route, prospect and guide on that first touch," he said.

While virtual employees might be possible, Sanchez is skeptical about using them given the complexity of his company's offerings and the training required to effectively support them. "We have challenges doing it even with everybody in the same room," he said. However, he thinks it's possible for a more consumer-focused business to have success with virtual agents.

SAP Latin America uses its third-party call center much like the Boston Red Sox use the Pawtucket Red Sox: as a farm team for agents to move into the company and fill sales roles, according to Sanchez. "The people we've hired [are] pretty sophisticated," he said. That makes them perfect for open positions further down the line."

This was first published in May 2014

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