Many customer service call centres that have been
outsourced to third-party suppliers are under-performing, according
to a report by analyst firm Gartner.
Of the organisations that outsource their customer service and call
centres - including the IT systems - 80% will fail to achieve their
targets for costs savings, according to a Gartner report.
In addition, 60% of organisations that outsource parts of their
customer-facing processes 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 has shown there are significant risks associated with
outsourcing customer service," said Gartner research director Alexa
Bona, speaking at the firm's Customer Relationship Management
Summit in London earlier this month.
"Historically, outsourcing has been seen as a way to reduce costs
by employing IT workers in cheaper locations, or with greater
economies of scale to own the processes that are not core to the
business.
"Companies are encountering problems with outsourcing because they
do not approach this strategically. They usually lack the
information to make meaningful cost/benefit analysis and focus on
inappropriate or unmeasurable service levels and cost metrics," she
said.
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 fail 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
recommended that companies create customer-facing processes. It
said 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 or contract work, said Gartner.
The analyst firm has predicted that the worldwide market for
customer service outsourcing is set to grow from £4.4bn in 2004 to
£6.4bn in 2007.