Spend Matters welcomes this guest post from Sanyam Khurana of GEP.
Customer is the king – an axiom from time immemorial. To ensure the customers received a king’s treatment, companies have always made the effort to build the product or service around them. Of late though, the customer has become more demanding for services and products customized to them. From a spade of choices, they want everything on the platter. In case of service sector, impeccable quality and value for money is a must, whichever service we may shop for. However, given the plethora of services available by market players in the field of contact centers, it becomes increasingly difficult, just about short of a “nightmare,” to select the right service provider. Outsourcing of contact center services is widely adopted among major companies to obtain a high level of support and service offerings with multilingual capability. It yields higher cost savings as compared to performing the function in-house. Outsourcing the non-core activities with the services provider having multifunctional and multilingual capability enables corporates to focus on their core business and reduce other fixed costs. However, selecting the right service provider for a contact center becomes baffling. Whichever service provider one may select, it inherently comes down to the parameters and processes one needs to look out for to make this herculean task easy.
Selecting the right engagement model
Defining the scope of which business processes are to be outsourced, complexity of identified processes can help eliminate hurdles. Industry operates between different models, and the right strategy should lead to the right model in hiring the contact center supplier. Labor and technology are major cost components driving the contact center – a mix of both yields the various models present in the market.
- A staffing model can be adopted when the business processes are controlled internally due to IPR or other regulations and volumes are not high.
- A completely outsourced model is usually adopted when call volumes are high and complexity of processes being dealt with are less stringent and tactical by nature.
- A client service model (hybrid of staffing and outsourced) can be adopted when redundant services can be outsourced to a third party while complex, confidential ones are retained in-house.
Each of the models has its own pros and cons. The factors to decide which model to go for depend on the requirement, complexity, language capabilities and service levels needed. Selecting the right model and managing suppliers in all three models is the responsibility of the organization that is outsourcing the function to ensure smooth run from transition to operations.
Outsourcing of jobs has emerged as the favored option during the last 3 decades, with South East Asia attracting a lot of business and investment. Asian countries particularly from South East Asia have been consistently ranked as top outsourcing destinations by the leading Tholons report. However, increasing dependency on the Internet and the need for stable telecom/IT services are the primary concerns when locating operations offshore. Given the constant political and economic upheavals happening in some of these preferred outsourcing destinations, the first response of a government in times of political crisis is to shut down the Web. This has a massive impact on the nation's global sourcing infrastructure to support global businesses. Significant cost savings from outsourcing to these locations might not be viable if the business cannot be operated long-term. This could entail transitioning services to emergency back-up centers in more secure locations. Companies need to consider whether alternative countries/locations, which might be smaller and/or less affluent players, have a similar level of technology and skill. The unpredictability of problems like those that occurred in Egypt and Middle East, can surface and seriously impact the security and availability of key support services. It is important to know exactly how and where the service provider backs-up all critical data and what protections it has in place in the event of a disruption. Disaster recovery planning is a key consideration for any outsourced and offshore scenario. Political risk analysis should be a key feature of the overall risk profile of any country where critical business and IT processes are being supported.
Contracting SLAs and KPIs
The pricing models generally followed in the industry are FTE, per productive hour, per incidence and transaction-based pricing. The“per transaction” is the best model adopted by most companies, as the client pays a flat rate for each transaction. However, it can be expensive to clients during periods of high demand. Corporates are increasingly outsourcing contact center services with pre-determined SLAs/ OLAs (Operational Level Agreements). To mitigate risks with suppliers, penalty/incentive clauses can be introduced in contracts with suppliers, which is tracked by pre determined KPIs such as call resolution rate. Contact center KPIs should be consolidated and standardized across the organization to establish consistent and cross-portfolio management reporting. KPIs should be reviewed in light of strategic objectives to ensure that support for contact center calls and feedback processes are driving desired behaviors. Cross portfolio reporting should be used to drive contact center process improvements while increasing customer satisfaction. Standardized KPIs will improve visibility of performance across the contact centers to enable fair comparison of performance based on like measures. The parties will partner to develop the minimum requirements for the call quality evaluation criteria and quality form to be used to determine supplier periodic overall quality score. The incentives will be shared based upon the mutually agreed performance guarantees utilizing contact center efficiency metrics, data quality and customer satisfaction results.
Diligent account management from the supplier’s side along with proactive tracking and assessment of services from business side ensures smooth and best-in-class operations. Once the relationship with supplier is established over time, many hurdles that are dynamic by nature, like reporting, ramp up/down team size, asking for additional services can be solved in just matter of a conversation. Partnering with your supplier also helps in transitioning the processes smoothly should the need arise and securing the data that has been with the supplier for multiple years. Escalation matrix/paths should also be well defined as an effective supplier management practice.
To sum it up, knowing the requirements and business strategy of the function being outsourced and the reasons behind it are crucial. Those when added to the market analysis of supplier trends and capabilities, location and geo-political conditions can help build a sound contact center service strategy. Ensuring the strategy is well executed is the job of the customer with a strong contract and supplier performance management practices. Keeping these in mind can definitely reduce this sourcing nightmare to a regular fun and enjoyable job.
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