„Make or Buy“? No easy decision when it comes to customer contact processing

Despite the progress of digitalization, the number of client contacts to be processed manually by staff is on the increase in most sales and service departments. At the same time, the customers‘/sales partners‘ expectations in terms of accessibility, processing and opening times as well as the quality of solutions are rising. If a company wants to manage the rising volume of contacts with the quality expected by clients/sales partners, additional human resources in the sales and service departments need to be developed. Against the backdrop of significantly rising levels of complexity regarding the recruitment, qualification and the long-term retention of sales and service employees, more and more enterprises are considering the chances and risks of having their customer contacts processed by external service providers.

Why outsourcing customer contacts?

Companies usually see the greatest professional added value in outsourcing customer contacts in the fact that they can react more flexibly to “volatile” contact volumes. By cooperating with external service providers, a “breathing system” leading to nearly constant service levels even in daily, weekly and annual peak phases is meant to develop. Also, enterprises are hoping for a higher degree of flexibility of service providers when it comes to an extension of opening hours or of the customer service, e.g. in the form of additional languages.

Since the processing of customer contacts is the core business of contact centre service providers, most of them display a high level of expertise in contact-centre-specific fields such as HR, IT, management control and quality management. Furthermore, there are providers who have specialized in specific processes (e.g. outbound calls) or are highly experienced in more modern channels (e.g. chats). Thus, companies can certainly benefit from the advanced level of know-how of service providers.

Apart from the work-related advantages, companies also seek to save costs by outsourcing client contacts. In principle, cooperating with external contact centre service providers opens up the possibility of more flexible costs as the cost accounting largely occurs on the basis of the work put in (e.g. in the form of processing time or processed contacts). Furthermore, service providers are mostly cost-oriented and take advantage of scale effects by cooperating with several clients. In addition, the same prices by minute/contact offered by service providers are often not feasible within the company, particularly when the external service provider “produces” the contacts in a foreign place with lower site and personnel costs.

Any hidden pitfalls?

In order to make the most of the three opportunities linked to the outsourcing of costumer contacts (increase of customer satisfaction, higher degree of professionalism and lowering of costs), a lot of pitfalls need to be steered clear of. Among these are:

• Get critics of your own organization actively involved early on and take their concerns seriously – your outsourcing plans will succeed only if as many people as possible are convinced
• Service providers need to match the company – a pure focus on subject-specific and economic aspects for choosing service providers will not lead to the best partner in the long run
• Step by step instead of “big bang“ – only little stories of success convince critics of an idea and simultaneously counteract a dependence on a service provider early on
• Realistic planning is critical to success – a reasonable time management with sufficient buffer (e.g. with regard to delays in contract negotiations, technical issues etc.) and the choice of a suitable starting point (e.g. not at the height of peak season) form the basis of a successful choice and employment of an external service provider
• Competitive thinking between internal employees and external service providers is not beneficial – only if internal and external corporate units work together on a partnership basis can clients/sales partners receive optimal treatment!
• Outsourcing of client contacts is not a unique project but a steady process – only the companies with internal resources sufficiently qualified to regularly monitor the service provider qualitatively as well as quantitatively will receive high-quality service from their service providers on a regular basis.

In addition to the pitfalls mentioned above, it is worth noting that the expectations towards outsourcing should not be set too high, particularly in the beginning: During this time, a pilot phase in which one can overcome possible starting difficulties or potentially optimize the form of cooperation with the service provider turns out to be helpful.

In five steps to a structured Make-or-Buy-decision

Regarding the topic of customer contacts, there is no ideal way when it comes to Make-or-Buy-decisions. Every company needs to determine for itself which contacts should be dealt with by its own employees and which ones should be taken care of by a professional service provider. Answering the following questions helps to make a structured decision:

1. Strategy Check

• What is the strategic position of the company on the topic of outsourcing?
• Is the customer contact part of the core value added?
• Do the employees processing customer contacts have a core competence within the company which is perhaps a USP in comparison to other competitors?
• What is the strategy regarding the acquisition and support of various customer-/ sales partner segments?

2. Process Check

• What contact reasons/ processes, possibly differentiated by customer-/sales segments, could be processed by an external service provider?
• What is the current volume of those contact reasons/ processes including process times? How will the volume as well as the process times develop in the future against the backdrop of a possibly planned automation/ digitalization of processes?
• What amount of resources will presumably be needed from external service providers, also with regard to seasonal fluctuations?
• What IT systems are required by the external service provider for processing the contact reasons and can they be employed seamlessly by the external service provider?
• How can the transfer of knowledge regarding the contact reasons/ processes to the employees of the external service provider occur and how much (non)recurring work does that imply? 

3. Quality Management Check

• What set of tools is necessary in order to continually measure and actively control the quantitative (e.g. accessibility, processing time) and qualitative (e.g. subject-related, methodical, linguistic competence) performance of the external service provider?
• How can the possibility of an effective quality management be secured by contract? 

4. Cost Check

• What (non)recurring costs does the external service provider charge? How do the internal costs compare?
• What internal human resources are necessary to accompany the implementation project and to continually control the service provider?
• What additional costs have to be budgeted for the implementation and running operations of the service provider? (e.g. access to technology, additional licences)?
• What further costs could arise for the company by outsourcing client contacts?

5. Risk Check

• What measures are relevant to minimize too big a dependency on an external partner?
• In what way does the external partner have to be prepared for emergencies (e.g. technical defect)
• What needs to be ensured with regard to GDPR/ data security? 

Even if an outsourcing of customer contacts presumably offers some advantages, a careful screening of the five topic areas presented above is necessary when it comes down to deciding which contacts should be outsourced to an external service provider and which ones should better be processed in-house. Taking the possible pitfalls mentioned above into account greatly increases the chance for a sustainable exploitation of the advantages.