Eight in ten organisations that outsource their customer
service and call centres will fail to achieve targets for costs
savings, according to analyst firm Gartner.
In addition, 60% of organisations that outsource parts of the
customer-facing process over the next three years will see
customers switch to rivals and find hidden costs that outweigh any
potential savings they derive from outsourcing.
"Our research shows there are significant risks associated with
outsourcing customer service," said Alexa Bona, research director
at Gartner, speaking at the firm’s Customer Relationship Management
Summit in London.
"Historically, outsourcing has been seen as a way to reduce
costs by getting others in cheaper locations, or with greater
economies of scale, to own the processes that are not core to the
business. Companies are encountering problems because they don’t
approach this strategically. They usually lack information to make
meaningful cost/benefit analysis and often focus on inappropriate
or unmeasureable service levels and cost metrics."
According to Gartner, successful outsourcing can achieve cost
savings of between 25% to 30%. However, Bona warned that a poorly
managed outsourcing deal can reduce the quality of the customer
experience, dilute the brand values of the company and fail to
deliver cost savings.
She added that most companies neglect to manage the customer
service experience sufficiently and often lock the organisation
into long-term outsourcing contracts without conducting appropriate
pilot testing.
To ensure successful customer service outsourcing Gartner
recommends that companies create a customer-facing processes. It
said that businesses should judge the supplier based on customer
satisfaction or other quality metrics to measure and motivate
outsourcers rather than "operational metrics" such as the number of
calls handled by the supplier.
Users should also not underestimate the management time required
to make an outsourcing relationship work, added Gartner.
Gartner has predicted that the worldwide market for customer
service outsourcing is set to grow from £4.4bn in 2004 to £6.4bn in
2007.