Call Centre Outsourcing Blog

04.06.07

How to select a Call Centre Outsourcing provider - decision criteria

Some of you have asked me to talk about decision criteria, how to select a call centre outsourcing company. Outsourcing call centre services can be seen as a wheel of steps which continues to turn over and over again. Only repetition and improvement will enable top performance in outsourcing. Thus, never forget that outsourcing vendor selection can only be as good as your outsourcing model. For instance, you will not make a good decision if you are looking for "a telemarketing company" measuring their call durations because you pay them per call minute. And in reality you are looking for a partner to take over complete processes such as "order taking" or "appointment setting". In that particular case, you would be better off looking for a Business Process Outsourcing provider (BPO) and charging per process result. e.g. per order or per made appointment.

That said, let's talk about the selection criteria, once you have your outsourcing model in place and know who you need.

1.  Provider History

Check which USPs and key strenghts made each provider what the company is now. This is very important to understand whether your challenge is something they have often done before so they have a knowledge advantage you can profit from.

2.  Company Structure

Not every BPO company is fits every project structure. In some cases you want a more personalized service of a medium sized business and the owner in charge. In others you depend on sheer size and the provider's capabilities to offshore low cost operations. In any case, these data have proven to play an important role across project types:

• Company size and capacity: don't only think of number of seats, but also business figures that indicate the role of the call centre service you want to outsource within the BPOs business so far.
• Number of employees, separated in part-time and full time: don't believe the saga, that full timers are always the better choice. In telesales outbound, for instance, the job can be so exhausting, that 4 hours selling per day is more than enough. Further, I have seen many excellent part-timers who just can't work the full day because of family or other duties. A middle age mother can be much more convincing on the phone than an 18-year old eager to shape his profile, yet lacking life experience. On the other side, part-timers require more attention by the management: agent turnover and training times are higher, workforce management becomes more challenging. In some case it might be good to have some freelancers flexible to jump in, when peaks cannot be managed otherwise or when sales challenges require absolute top performers - who are often self employed.
• Technical data: it is not only the number of PBX lines, but both the scope and scale of technical infrastructure. Some projects require modern channels such as SMS or text campaigns, some workloads can only be managed at a certain price level, if high quality speech technology and automation tools are in place. Be sure you write down the infrastructure you need and compare the offers. Don't think BPOs are all on the same level.
• Language: this can be crucial for the decision whether to offhore or not. If top language skills are required, e.g. for complex sales processes, home based players have an advantage. At the moment we see more and more companies restricting offshoring to their back office processes and take the customer interaction processes back home. Further, if you need many different languages this might have an impact on where you look for vendors. Some countries like Ireland, the Netherlands or recently Poland focus on building such multi-language call centres.

3.  BPO's view on your challenges

• Have the call centre outsourcing companies mirror the way they see your challenge. Check whether you can see they have understood your key goals, issues and whether they are keen and creative to meet, respectively resolve them.

4.  Project description

Team work during the project is crucial. You want to understand who exactly is in charge on the provider's side in which case (and especially in urgent cases out of office hours!). You need an understand how they will proceed once they have you signature. Does it convince you? Is it tailored to your challenges or just another standard proposal?

5. KPIs and measurement

Sure, Key Performance Indicators (KPI) will be defined at a later stage. But right now, you want to understand whether the provider already has an idea about how to measure project success - tailored to the goals you had set out in the first place! In any case, the BPO company should already have a methodology in place, how costs and performance are measured.

6. Transparency is key

Try to get an idea what the contract would look like, maybe the Call Centre Outsourcing company sends you an anonymous sample. What does the invoice look like? Will the fee be charged per month or otherwise? When will commissions be paid? Maybe you want to be sure that the end customer will not cancel his order before you pay commissions.

7. Prices for Call Centre Outsourcing

This is a topic for itself and I will talk about it in the next blog entry. In any case, it is good to have a proposal even before negotiations will start. Because you don't want to waste time , you will put together a shortlist first. One of your criteria will surely be, whether you can afford the price. On the other hand, it is a strategic mistake not to leave the Outsourcing company any air to breathe. Meaning: in a commercial world each company needs to make some profit. Knowing that the margins in this business can be quite low (depending on scope, scale and quality of services) this is an important factor to avoid later project breakdowns or serious performance problems. But again, let's talk about this next week. See you then back here on the Call Centre Outsourcing Blog.

The next posting is next week. Send your topic enquiry now to info@jmoellerconsulting.com!

23.05.07

Cost comparison Call Center Outsourcing vs. In-house Call Center

I have been in the USA for a while and now I am back for some fresh ideas. For many people make or buy is largely a question of cost. Over the years I have gathered some issues which from my experience are main drivers for the cost of outsourcing and the alternative in-house. Of course, there are many forms in between which I already spoke about in this blog. But these factors might give you some point to start from. Again, I will be happy to discuss your comments.

MAKE

• Project Management: Supervision, continuous Reporting and working on internal organisational interfaces.
• Staff: Salaries & Packages, Training, and Staff Turnover Cost
• Processes: continuous optimisation
• Administration
• Third Party Cost: Postage, Telecommunication, Office supplies
• Technology: Maintenance and Innovation
• Office Equipment: Maintenance and Innovation
• Controlling: measuring internal costs and timelines

BUY

• Operational cost: cost per call, contact, minute, hour, recently often cost per achieved process result
• Project Management: Supervision, continuous Reporting and working on internal and external organisational interfaces.
• Staff: training regarding product and company knowledge, plus IT systems run by the client. Communication skills and often process skills will be trained by the service provider.
• Processes: continuous optimisation
• Administration
• Third Party Cost: Postage, Telecommunication, Office supplies
• Technology: Maintenance and Innovation
• Controlling: measuring internal and external costs and timelines

Superficially, the tables look quite similar. The devil hides in the detail. Outsourcing provides a clear picture about the operational costs while in-house centres often do not measure all their costs clearly enough. Communication skills will be trained by the Outsourcer, but on the other hand there are more interfaces to consider. Project management costs will tend to rise with the distance to the provider. Wages and their influence will be discussed another time.

The next posting is next week. Send your topic enquiry now to info@jmoellerconsulting.com!

23.04.07

How to sell Offshore Call Center Outsourcing Services

This topic is a long story. I assume all of us have been following the pros and cons of offshore outsourcing in the media over the last few months. I have discussed before that companies are going various directions - some withdraw to their home country, others insist on the advantages of the offshore business model. Today, for instance, I read in the papers that the probable merger of ABN Amro and Barclays Bank will shift even more, largely Back Office jobs to India. Now, the offshore model is not dead at all. But the landscape is changing with the operational costs. And clients' demands have never been as diverse as now. From my perspective, offshoring is not all that bad. It depends on how you set up the project. From the other end, the vendor's side, this means to listen hard what changes and how it changes these days. This is why I thought it might be a good idea to write down some key experiences about clients' perceptions of the offshore approaches and how to meet them. Check my new ebook "How to sell Offshore Call Center Outsourcing Services" which I mainly focused on Offshore players and clients in the regions Europe and North America.  

The next posting is Mid May. Send your topic enquiry now to info@jmoellerconsulting.com!

16.04.07

How to write a Call Center Outsourcing Contract

Which issues need to be considered in a Service Agreement for Call Center Outsourcing?

There is obviously no general advice what exactly should or even must be ruled in each and every case. Also, I must emphasize that I am not a legal expert, but a Call Centre Consultant. Thus, here is some advice how to set up the rough contents of an Outsourcing Service Agreement (the general framework) and such contents of a Service Level Agreement (terms & conditions for a specific project, subject to change frequently). For the final wording of the agreement I recommend always co-operating with specialized lawyers. The following details are also documented in my book “Call Center Extern”, if you have any questions, just send me an email to info@jmoellerconsulting.com.

1. Subject of Agreement

2. Outsourcing Provider’s services and obligations

The next posting is next week. Send your topic enquiry now to info@jmoellerconsulting.com!

29.03.07

There are more options than Offshore & Onshore

Outsourcing provides lots of opportunities if one does it right. I have seen dozens of different outsourcing models, some of which have proved quite successful for the respective company. But each case is different. Generally, there is the question whether to spin off a separate company first. Some companies do that on order to gain more freedom regarding their salary structures - which can be quite static in some industries. Joint Ventures can also be an option. For example, I have seen a large BPO company running a JV for insurance customers witht their client. Thus, vertical and call center expertise can be combined. Once one has opted for outsourcing, there are local BPO providers who have their management in the local country, but running offshore operations as well. This might sound like: "Why should I do this, then I can hook up directly with an offhsore BPO provider." Not necessarily, since the larger players in offhshore countries are often themselves outsourcing at least parts of their "production" to smaller players. If one goes down that route, the local "management office" might be worth a try.

The next posting is next week. Send your topic enquiry now to info@jmoellerconsulting.com!

19.03.2007

Offshore or not Offshore?

Recently we have seen it in the news everywhere: companies like e.g. Lloyds were cited to have retreated from offshore outsourcing. Their customers, they say, have complained. There are cultural differences that did not seem to be appropriate. If we look closer at it, though, we see that they still offshore parts of their Back Office operations. This raises an interesting question: can we see a trend there like years ago, when front line operations were "outsourcable", but not second lines with the experts? The answer is as usual: it all depends on the company's individual challenges, situation and goals. What's more is that others go exactly the opposite way. Barclays Bank have just announced they will offshore operations for their Credit Card Services from Manchester to India.

If we have a look at other countries we see that the core trends are quite similar. Customer Management budgets are cut or fixed while challenges are rising (both more contacts and higher complexity of cases). Ma companies are looking to outsource at least a part of their call center operations to so-called low wage countries. Usually, the lower the wages, the higher the project management costs will be. The key question, therefore, is to compare both sides of the story to see where the biggest net effect can be achieved.

Unfortunately, reports to the Board need success figures at least per quarter - but often monthly. It looks like this is the root cause why long term impacts are not prioritized as high as the mentioned short term cost effects. Such impacts include, for instance, churn rates of customers because of bad experience or negative word-to-mouth "propaganda". Some of these effects can be made tangible by means of a Customer Lifetime Value concept. Key of such concepts are Kex Performance Indicators that are not made bottom up like the classic call center measures (Service Level, Call Durations etc.) but broken down from top management perspective to that level. If we would integrate long term impact of outsourcing models into our strategic decisions, we would have a better view of which option is good for us. Because this is all that matters.

What is your opinion? Send me your comment to info@jmoellerconsulting.com!