There is More to Outsourcing than Cutting Costs
The outsourcing industry has long been seen as a way to cut costs, hence it has always been characterised by the “Lowest Bid” approach. But it’s time for this to change.
We are at a tipping point in the customer experience story. Businesses must understand that outsourcing is not just a cost-cutting tool. On the contrary, as customers continue to seek easy, effective, omni channel and personalised interactions with brands, it’s critical that companies meet those expectations. And outsourcing is the tool businesses need to respond to these challenges.
There is nothing wrong in prioritising cost cutting but focusing solely on it is damaging. It forces businessеs to overlook the real and actual benefits of engaging with a specialist outsource service provider.
Outsourcing has become a key element of business management in the last decades. According to Grand View Research Inc. the industry is expected to reach a market size of well over $400 billion with IT outsourcing expected to reach $98 billion by 20204. The industry’s market size in the US alone is estimated at about $132 billion.
Being pressured by the coronavirus among other factors, businesses are starting to realize that they can work with dedicated IT development teams for example, and get the same high-quality services they get in-house but for less money. This is permanently changing the way businesses are organized so in my opinion this level of growth in the outsourcing field makes sense and is likely to continue in the next few years.
So, what exactly is driving this exponential growth in outsourcing? Why has it become so popular? Some benefits include:
Another big advantage, often neglected, is that by outsourcing, businesses replace their fixed costs with variable costs, not to mention the headcount reduction that often comes as a result. In addition to that those who stay will have more time on their hands to work on the things that do matter.
There is no arguing with the fact that outsourcing is indeed a very efficient way to save money. By outsourcing their customer support, software development or other services and solutions, businesses are able to cut various costs such as IT expenses, but also hiring, general, and administrative costs.
Talking about the IT sector in particular, a study carried out by MIT Sloan, companies that spend $96 million on IT outsourcing enjoyed $121 million in cost-savings across other, non-IT areas.
Access to Technology and Innovation
However, there are numerous other factors supporting a business decision to engage with a BPO, including access to cutting-edge technologies for a fraction of the cost.
Advances in technology, specifically in automation and AI are fundamentally changing the quality of engagement and support that customers receive while also improving cost efficiency.
Despite it being one of the most popular topics lately, most of the people and businesses still don’t understand the scale of its value. And conversations around it tend to zoom in on how it can make companies more productive which does stand to reason - if implemented correctly it really does lead to greater output in less time at a lower cost.
No one likes to wait on hold to get to talk to a customer support agent. Similarly, no one likes to engage with a chatbot that can’t answer your questions properly. However, once properly implemented, an AI bot can bring significant improvement in a company’s overall customer satisfaction.
One reason for this being that chatbots can be available around the clock – 24/7 customer service. And even if it can’t answer 100% of the questions to the complete satisfaction of the customer it certainly helps in reducing the load off human employees. It will also have at least provided customers with some sense of satisfaction while they wait for the complete review of their request.
Although the initial cost of deploying an AI chatbot can be expensive, its lower ongoing operating cost means that it is much less expensive than a human employee. Hence, it will significantly speed up response times, satisfaction and improve profitability.
So, the technology complements the human agents and allows them to focus on the more complex issues.
AI can be used to reduce errors which are not just disruptive but purely wasteful. Take the US’s healthcare industry, for example, which goes through almost $210 billion of unnecessary tests and procedures every year. One of the main reasons is that patients get treatment from multiple service providers making it difficult to organize the process. AI can spot duplicate procedures and remove them from the treatment schedule.
Focus on Business Critical Tasks
Outsourcing your customer operations won’t take as much time away from your managers and executives as an in-house operation would.By keeping your top performers busy to attract, hire, train and retain talent in areas outside your core business, you're using up valuable talent and resources that can be of better use focused on your business-critical. In cases like these outsourcing may be your best bet. Examples of areas of their business that companies outsource include their back office, accounting, digital, customer service and more. This way they can stick with what they do best --and do more of it.
Ease Growing Pains
For one thing, BPOs have the tools to meet customer demand or for you to avoid unnecessary training.
Implementing a customer self-service strategy is one way. There are several online knowledge base solutions on the market with similar functionality. This will identify the key drivers or trends for customer contact.
Most Businesses already have the basis of this online with some standard Frequently Asked Questions section (FAQ’s) on their websites. Using the customer contact trends, you can then develop a library of relevant content that should answer as many of the past received enquiries. This “knowledge base” of information on customer content should be written in an informal, conversational style that can be read clearly and easily. Use video and audio where possible and avoid long written text which will put customers off searching for an answer. The net effect is that the knowledge base becomes a dynamic library of customer related contact and the Business should aim to invest more resources in to optimizing the knowledge base rather than slavishly answering the same type of call, email or any other channel.
BPOs have this kind of knowledge base already operational. They have the blueprint for it and are ready to deploy it at any moment in your business.
Dealing with customers is not something that can be taken lightly. In the era of AI and other technologies rushing onto the scene and trying to cover as much ground as possible we often forget that it’s the human touch that makes all the difference with satisfied customers. Outsourcing gives access to a pool of talent; professionals experienced professionals and managers who already have the necessary skills for keeping your customers happy.
You can skip through the growing pains that invariably come with the lack of soft skills or personnel who aren’t familiar with workflows.
A BPO can prove invaluable in bringing an improvement in reporting and can provide you with a much-desired market insight. Furthermore, a partnership with a BPO can be beneficial in improving ROI which in turn leads to a much sought-after tangible competitive advantage.
Another reason for call centers to turn to an external provider is perhaps the desire to improve service levels and KPIs. Customer effort – the work customers must do to get their problem solved – matters nowadays more than ever. As Harvard Business Review says: “Delighting customers doesn’t build loyalty, reducing their effort does.”. As someone looking from the outside, a BPO can tell you where the most friction occurs, thus help increase retention. This takes pressure off the business so it can focus on its core purpose.
For others, reasons to partner with a BPO include improved business continuity and being able to speed up the process of implementation of new and innovative solutions. This is what makes working with an outsourced service provider such a good proposition.
We are a leading outsourced contact centre and BPO service provider with global ambitions driven by our local expertise. Founded in 2008 60K is one of the leaders in its field.
We strive to provide high quality services and act as an extension of our client’s business. Through the years, we have proven ourselves as a trustworthy partner that works with global clients who are known as worldwide leaders in their respective business sector. As a professional outsourcer and a reliable business partner, we are boosting the performance of some of our smaller boutique clients as well.
For us the key to a successful business comes from within and is directly related to how positive, satisfied and successful everyone who works for us is.
If you are want to know more about outsourcing feel free to schedule a meeting with our consultants