Creating competitive advantage with offshore – don’t lose sight of your core service and quality goals

There are many commentators who are happy to spell out the benefits of offshore outsourcing. However, despite the clear financial benefits of moving contact centre operations overseas, organisations are still often unsure about just how to integrate new offshore resources into their contact centre strategy.

In this article Sabio’s Founding Director Adam Faulkner looks at some of the more practical implications of offshore integration, and recommends that organisations should retain control of their broader contact centre infrastructure and technology if they are serious about using service to create real competitive advantage.

As a contact centre consultancy, we’re regularly approached to help organisations determine whether offshore should be part of their contact centre strategy. Not surprisingly, we always answer “it depends”! That’s because organisations should first be clear about why they’re considering an offshore approach.

Generally, the main reason organisations consider moving their call centre operations offshore is to save costs and, where cutting agent costs is the key criteria, offshore certainly does make sense. However, we typically caution those organisations that are expecting overall savings of over 50 per cent from their offshore investments. All too often, companies focus on the much lower labour costs and latch onto dramatic statements – such as labour costing ten per cent of the UK rate - while overlooking the broader contact centre infrastructure that they’ll need to support them. Our experience is that when all the costs are considered, offshore savings usually work out somewhere between 20 and 30 per cent less expensive overall.

These are still impressive numbers, however – and ones that most businesses can’t afford to overlook. In much the same way that the Internet boom dramatically reshaped the customer service sector – enabling the launch of a whole new generation of service companies such as lastminute.com or amazon.com – it’s possible that offshore and its new business dynamic will have the same impact. These companies, however, succeeded because they used the power of the Internet while not forgetting about service quality. We believe that the next generation of customer service leaders will be those that take advantage of offshore economics without losing the quality and control that will enable service differentiation.

Service levels vs. service quality

Balancing service levels against service quality will be a key challenge for companies adopting the offshore model. When companies currently measure their call centre service level it tends to be based on quantifiable factors such as the speed of response or how many calls an agent answers during a given period. These are the most obvious measurements, and ones that are easily achievable in offshore locations.

Smarter companies, however, understand that service should be a strategy not just a cost. Field leaders such as Microsoft now concentrate instead on key issues such as the quality of a call, customer satisfaction and first time call resolution. The focus has moved away from agent targets to exceeding customer expectations.

For the consumer there’s nothing more infuriating then waiting in a queue for ages, getting to the front and then finding that the agent can’t handle your enquiry. Offering directory enquiry services from India is all very well, but will the agent know that the Harvester in Holborn is actually a restaurant in London?

Equally annoying is having your call answered straight away by an agent who then has to redirect the call because they can’t resolve it. The ability to offer first time call resolution in an efficient, customer-focused manner is fast becoming an important differentiator, and any organisation considering offshore call centres needs to ensure that they address this.

Turning the model upside down with IP

Until recently, traditional call centre infrastructures meant that companies using offshore call centres only had one option, with all callers being routed straight through to an offshore agent. Now, with the broader adoption of IP architectures, we are able to turn this model upside down and for the first time start connecting appropriate agents to the caller.

This has significant implications both for organisations using their contact centres to drive their ‘service as a strategy’ programmes, and for the intelligent integration of both onshore and offshore resources.

First generation offshore call centres mainly concentrated on sending calls offshore to agents in a particular location. Customers typically dialled a non-geographic number e.g. 0800, the call was then sent offshore and any control over that call was immediately lost. Now with the latest IP technology we can turn that model around. Rather than re-directing the call overseas, we can focus on bringing the agent to the caller.

Because IP is at last a reality, organisations can now start to build call centres, with agents situated around the world – they might be in Bangalore, Birmingham or Bangkok - all simply operating as nodes at the end of an IP connection. Agents simply log on to the UK switch and can be managed as part of an integrated call centre/IP telephony infrastructure. Using IP within your offshore model offers four key benefits:

• Overall infrastructure requirements are reduced, cutting ongoing support costs and initial Capex investment
  
• Call centre resources can now be ‘virtualised’ – providing real efficiencies in terms of pooling agent resources
  
• This resource optimisation means that the right customer contacts can be connected to the right call centre agents - wherever they are located – and at the appropriate cost level, enabling true customer segmentation
  
• Contact centre globalisation – organisations can now tap into labour pools anywhere in the world

Significant impact for the UK market

So it’s not about simply closing everything in the UK and moving operations out to India - using IP allows organisations to tap into lower cost overseas labour pools while maintaining the essential control over customer processes and technology that can support a ‘service as a strategy’ approach.

What’s clear is that there will still be a real impact for UK plc as some jobs will be moved offshore. Historically this shouldn’t come as a surprise, the UK has been losing jobs to offshore locations since the nineteenth century, and our higher labour rates mean that the export of service jobs to lower pay economies was inevitable.

We believe that by adopting the ‘bringing the agent to the caller’ model, UK plc can address some of the key issues around setting up a contact centre offshore. Yes UK plc will lose some jobs, but if organisations can optimise resources so that low-cost offshore labour pools handle transactional enquiries while UK agents retain the higher value enquiries, there is still a strong opportunity for contact centre sector growth in the UK.

For some major organisations, a hybrid approach where offshore operations in India are used as part of a broader contact centre strategy, and agents in India are used to handle transactions that would simply be too expensive to service in the UK.

Clearly for major organisations where cost is important – and the agent still remains the most expensive part of any contact centre operation – the jobs will go. But where quality is important and as ‘service as a strategy’ starts to play a stronger role in UK organisational thinking, those jobs are far more likely to remain in the UK along with the management of the contact centre process and its technology.

Keeping the customer satisfied

The general consensus to date has been that most people who have experienced a call that has diverted out to India have found the quality of the transaction low, with the language barrier and heavy accents proving a barrier. Not surprisingly, many customers feel they are being short-changed on customer service.

Providing key areas such as training and quality of service delivery can be kept in the UK, and providing the right agents can be connected to the right customers, organisations have an opportunity to address this. Smart companies understand that service is a strategy, not a cost, and will be prepared to invest in a contact centre infrastructure that ensures quality of service is not affected – while at the same time taking advantage of the clear cost savings that offshore locations can offer. Using IP technology will allow companies to achieve this.