15 January 2014 | Ivan Ivanov
A decade ago outsourcing was a new concept; now it is the norm in many industries. Indeed it is a significant part of the global economy: in August 2013 Gartner predicted the global outsourcing market will grow by 5.4 per cent a year for the next four years, reaching a total value of $288 billion (£175.1 billion).
Despite this, many corporate executives remain sceptical of the benefits of outsourcing. In fact, it is hard to think of an industry that has grown so large so rapidly while at the same time attracting such widespread opprobrium.
Here are five myths that hold back far too many businesses from realising the benefits of outsourcing.
- Language will be a hurdle. Perhaps the most common complaint about outsourcing to an overseas firm is that they will not have the language skills required. Yet, in new outsourcing locations like Bulgaria, language skills are a selling-point rather than an embarrassing problem.
- It might save us money, but it will compromise quality. Because much of the early enthusiasm for outsourcing was driven by the opportunity to cut costs, and because there are still significant savings to be had the entire outsourcing industry has in many minds become synonymous with cost savings. But recent research from business advisory firm KPMG found that for many companies the primary driver for outsourcing is no longer cost reduction – it is in fact enhanced quality of customer service.
- We will need to spend all our time training the outsourcer’s agents. An outsourcing firm may hold generic skills and knowledge, but it will lack specific knowledge about a company, its products, services and customers. For this reason many executives fear entering an outsourcing arrangement will result in them running endless training sessions for the outsourcer’s agents. In most cases it is only the initial training that needs to be delivered by the client company.
- I will have no control over an outsourcer. It is easy to feel confident about the quality of customer service you are delivering when you can wander over to your customer service department, walk among the agents and listen to the conversations they are having. How do you know what an outsourcer is doing? In fact, many of our clients tell us that they have a clearer view of what we are doing for them than they gained from their in-house departments. When travel company Thomas Cook first began using us for its customer service webchats it was nervous about it. It had always used a contact centre in Scotland, and so to outsource to distant Bulgaria was a risk. Yet, its team was able to monitor webchats in real-time. It could look at a dashboard showing response and resolution rates, and it could see from the low escalation and complaint rates that the campaign was running as it should.
- We will have to pay six-figure set-up fees. An understandable reluctance to pay large set-up fees has deterred many executives from outsourcing, yet the rise of cloud technology solutions, and a more flexible workforce in many countries, is enabling a growing number of outsourcers to do away with set-up fees.
☛ Ivan Ivanov is chief operating officer at 60K