Tendering for Call Centre Services
- by Jens Moeller © Copyright Jens Moeller Consulting Ltd 2011
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Specifying selection step-by-step
In contrast to bids from individual agencies, tenders provide the same information to all service providers and force them to follow the same structure and process for their bids. However, in order to build successful tender documents there are a number of factors that must be taken into account.
The complexity of a tender is often a controversial issue. The formal structure of a tendering process makes the evaluation and selection process a lot easier for the client; service providers find this acquisition process difficult though, as it forces them to adapt their usual pricing strategies. Also, the tender grows in complexity and volume with the size and length of the project. For these reasons there is no one size fits all approach for tenders in the arena of Call Centre services. However there are common denominators, which can be adapted to individual tender scenarios. To begin with, it is important to educate the service providers about the tendering process, either in a pre-tender document or in the tender documentation itself. A two-stepped approach has proven very successful here:
Step1 – Request for Information
In this step, basic issues such as conflict of interests or dependencies of the potential service provider are assessed; whether they can deliver the necessary quality and whether they are a financially sound enterprise. The service provider needs to bring a good fit, as more often than not, this is the start of a long-term venture.
Initially therefore, there is a rough outline of the assignment, which, besides a brief portfolio of the client, should include the reason and aim of the tender. Depending on outsourcing form or model it can be limited to specific tasks, complete
processes, including back office functions, or even the running of a complete call centre for the client.
This information is completed by formal conditions, such as the tender deadline, general business terms and conditions and required content and documents. Depending on complexity of the assigment and the associated risks (for example the inability to agree on a fixed call price), the client should provide a nominated contact and contact times as part of the initial document. At this stage it would also be wise to ask the potential service provider for their general invoicing arrangements.
It is also important for the client to outline the tender process and approach and give critical dates for submissions and decisions. The more complex the tender, the more important it is to allow interested parties to present questions about project and tender process in writing only. For large projects it is also important to decide beforehand whether to allow sub-contracting or joint ventures.
The outline of the outsourcing matter and future responsibilities of the service provider is at the centre of this step. Business information on interested applicants will tell, if their business strategy fits that of the client, whether they are a financially viable enterprise and whether they can provide the necessary resources.
Applicants should also outline their core services and if possible to categorise them into the three areas of telephone marketing, sales and customer services. It is vital to ask the interested parties to provide references for similar projects. Qualitative and quantitative data with regard to project management are standard for contracts, as are an outline on the approach to quality management (reporting on and off line), IT systems and capacities.
Step 2 – Request for Quotation
In the second step, which is also called “Request for Quotation” or “Request for Proposal”, the selected parties are asked to provide a quotation. For that the client needs to provide all relevant data necessary to submit a complete proposal. This includes a comprehensive description of their target segments, goals and strategies, regarding the activities that are to be outsourced.
The benefit of including that process in this step is that the relevant information does not need to be shared with everyone, but only selected candidates. Targets should be explained in as much detail as possible, so that qualitative goals (such as success) and quantitative goals (such as service levels and times, success and loss quotas) can be clearly interpreted and allow the applicants to draw conclusions on the requirements with regard to performance and reporting. An outline of target-service-levels, if necessary for each segment or process, is standard, as well as its equivalent to other media and reaction times.
In order to allow for resource planning, candidates will need information on potential call, fax, e- mail and mail volume by day, week and month - for a current period, but ideally over an annual period too.
Any regular peaks should be highlighted in this process; furthermore call duration, average handling time, which includes any pre- and post call administration. With regard to personnel, the required staffing numbers for the outsourced process should be indicated, as well as complexity and duration of all necessary training. The demands of internal technical systems in the data management of the potential service provider are important. They allow a full assessment of technical effort and a feasibility study.
This is how you choose a service provider
For the selection of a service provider it is advisable to approach it systematically. This two step approach has proven to be successful
For large volume contracts and complex outsourcing activities, administrative processes should be stipulated, for more straightforward services these can be agreed when contracts have been concluded.
This can also happen after an initial pilot phase, once both partners have gained a better understanding of potential overlaps.
Communication flow describes which process is to be used in which event, with which media (telephone, fax, e-mail, letter). Information on the project organisation concludes the documentation. This includes specific critical dates and phases, such as project start date, pilot phase and live services. At this point payment terms can be stipulated.
In the first instance the client should outline roughly, how they would like challenges and demands dealt with. A detailed project plan with critical paths, mile stones and dates, as well as distributions of tasks conclude this step.
Success should be measurable In the second step the applicants should demonstrate how the client would be able to measure their services and cost. Here, concepts for quality assurance, such as monitoring and reporting, should be illustrated. Controlling should include cost monitoring and billing arrangements. Applicants should outline their Key Performance Indicators (KPIs), which should be comprehensive and directly relate to the outsourced activities. Credit control process for example, should not be measured by effective contacts, but by the quota of kept payment promises. For all of such issues, the client can stipulate basic requirements. At this point they should also ask, whether unannounced visits would be acceptable in order to maximise openness.
Staffing details of the potential service provider, such as numbers of full- and part-time employees and their employment status, qualifications and call centre experience can be important indicators for the efficiency of the applicant's business. It is important though, to keep in mind that the business will need a certain amount of temporary workers to deal with peaks. Most important are details on what training will happen when. Details on the responsibilities of team leaders, the regularity of team and one-to-one meetings, as well as an outline of staff development programmes can give a good indication on the quality of leadership.
With regard to technology there should be information on what databases are used, the telecommunication set up, call handling systems, as well as CTI, IVR, voice logging unit and dialler (for outbound business). The aim of this information is the evaluation of how high the technical integration effort will be and whether the provider will be able to achieve an efficient service through state-of-the- art equipment. Security systems for data management and contracts with telephone providers, especially in view of service numbers, give insight into data security and the level of service cost. The adaptability of front office software to back office system and databases of the client are usually critical points for success, and in case of email management also the compatibility of different email systems.
The pricing structure should be fixed in the tender in order to be able to compare different offers. They should be divided into start up cost and running cost.
The start up cost usually comprise:
- Project briefing and training of employees of provider
- Project design and management: communication briefs, call flow, work flow, FAQs, policies
- Technical Integration and Set up; Pre-test: preparation, execution and analysis
The running cost usually comprise:
- Project management: online supervision and distribution of incoming calls, database analysis, as well as off-line quality control
- Handling cost, for example price per call or per hour
- Third party costs, such as line rental or portals
- Potentially additional service costs such as fulfilment.
The client should ensure that they receive the actuals for fixed price components and should set an upper limit for variables, such as echnology, training and project management.
Search and Selection of an appropriate Service Provider
The selection process should be approached step by step (Illustration). It is much better to get exact information from pre-selected candidates, than to spread the information too thinly. The selection can be simplified and made more objective through a decision matrix, a point system, or another scoring model. The final selection should only happen after a site visit to the potential provider and a final critical scrutiny of all factors.
The aspects shown in this article seem relatively complex. However, it has been demonstrated that
- With an increased formal structure of the tendering process, the outsourcing project can be implemented more efficiently – for both sides
- The necessary complexity of the tender is dependent on the extent of tendered services
- The project delay and the impact of a subsequent change in service providers justify the initial effort in search and selection
There is a market trend that both sides bring in neutral advisers into this tendering process: the service provider in order to maximise acquisition chances and minimise their risk of losing the contract; the client in order to make the outsourcing process more efficient and to minimise their cost and service risks.
Jens Moeller
This article was originally
published in the German Call
Centre Yearbook in 2003,
Marke – Kunde – Effizienz,
published by DDV (Deutscher
Direkt Marketing Verband).
