Over the last two decades, most of the organizations in America and Europe have outsourced their call centers to developing countries. This phenomenon has proved to be feasible for the organizations to maintain a leaner structure and improve their bottom line.
Call centers are the customer service department of a company which help the customers with their queries. There are various processes that are associated with a call center like technical support, medical transcription, sales etc. During the 1990s, when companies were focusing heavily on Return of Investment (ROI) and Total Cost of Ownership (TCO), some companies in Europe and America realized that outsourcing their call-centers can make a huge difference to the bottom-line of the company.
It also made them to focus more on their core businesses and make their company structure leaner. Since then, call center trends have indicated that outsourcing is one of the most effective ways of cutting down costs. Call centers have mushroomed in the developing countries like India and Philippines and have become a major industry which employs millions of people.
Advantages of Outsourcing your Call Center
This is the biggest reason why companies outsource their call centers. According to estimates, companies save anywhere between 30% to 50% by taking their call centers offshore. Developing countries have higher levels of unemployment and per capita income is low, which means easy availability of cheap labor. For example, the average salary of a call center agent in the US is around $40,000, whereas the average salary of customer service agent is around $3000. Also, the cost of setting up the infrastructure, hardware, software, transportation etc. is considerably lower in developing countries. This allows an organization to save a lot of money and resources.
Increased Focus on Core Business
Most of the call centers are set up for customer service. While customer service is crucial for the organization’s success, it is important to focus on the core areas such as production, sales and distribution. Outsourcing your call center can allow you to invest more time and effort in the core activities of your business. This in turn can result in better organization of the available resources. Outsourcing helps you to ensure that someone else is taking the responsibility of resolving the queries of your customers.
Ease of Expansion
If you have not outsourced your call center and are thinking of expanding it, then you are looking at a major investment. With the increasing costs of properties in America and Europe, even a minor expansion can mean that you have to spend quite a lot of money. However, outsourcing your call center can ensure that you can expand your support staff and infrastructure without incurring any major costs.
When you outsource your call center to a third part vendor, you enter into a risk sharing agreement with them. This gives your business a sense of security that risk would be mitigated in case of any unforeseen challenges. Businesses that diversify themselves are at a lesser risk, and can sustain the upheavals in economic situations.
Most of the third-party vendors that provide outsourcing services have a highly qualified and trained staff which ensures that your customers are satisfied with the service. This saves you the tedious task of training people and then getting them to ensure that they resolve the customer’s queries in the first call itself. (First call resolution is an important parameter in a call center which determines how effectively an agent can resolve an issue).
Outsourcing allows your business to have a better flexibility as the third-party vendors often hire extra staff that can take care of the increased call-volume in peak times. It also allows your business to be unaffected by local factors. For example, having an offshore call center can allow you to have your customer service available during Christmas or Easter.
These were some benefits of offshoring your business. This article would not be complete if we do not mention the challenges that outsourcing has posed to the host countries. In America, outsourcing has become a major political issue and featured prominently in the Presidential campaigns. It has led to a large-scale unemployment in America, and has had an impact on the average salary of American customer service representatives.
Another disadvantage that has come to the forefront is the difficulty cultural and linguistic barriers pose to customers. There is a marked difference in the way English is spoken in America as compared to that of India. Most customers complain that often they have to hang up because they are not able to pick the accent. These challenges are hard to ignore, so it is imperative that steps are taken to counter them.