The 3 Steps to Outsourcing

Phase One: BENCHMARKING. Call Centres or internal T.M Departments need to know how well they are performing on two basic criteria: Call Outcome and Call Production. By evaluating and justifying Campaign costs through comparative studies, a benchmarking process can determine whether a Call Centre meets Best in Class or even World Class benchmark standards. Productivity and Customer Service Benchmarking allow management to keep their Call Centre on track and running the right campaigns.

Today call centres have become the critical key to enhancing and creating customer relationships (customer service and customer value). For this reason alone frequent performance benchmarking is vital for a call centre or in-house T.M. Dept to ascertain if they are the producing the best available customer service and return on investment.

Many World Class call centres/companies have realized the most effective means of benchmarking is to outsource some of their non-core activities. The very process of outsourcing ensures that they obtain critical performance comparison reports from bidding best of class vendors and subsequent real-time reports from the successful best-in-peer-group provider. These performance metrics provide a score card/invaluable guide to: a) rate their ability to supply their own customer needs, b) spot any performance gaps or service levels that need attending to and, c) demonstrate first-hand the benefits in outsourcing.

Phase Two: a) Reviewing the long-term competitive strategic plans of your organization; and b) developing an outsourcing strategy plan.

Phase Three: Below are some issues to be addressed when deciding what campaigns should then be outsourced.

1.	Current levels of Campaign profitability.
2.	Potential growth of campaign.
3.	Can the Customer Needs be better met by outsourcing?
4.	Can some of the project activities be better automated?
5.	Will you lose any follow-on client service opportunities.
6.	Are there any fulfillment, billing or processing problems that could occur with outsourcing.
7.	What level of Customer feedback reporting would you require.
8.	What changes to your contact management reporting system are required if you say: outsource 1st level calls and maintain 2nd level calls?
9.	What campaign planning needs to be made for any technology and knowledge transfer?
10.	Are your resources better utilized through outsourcing 'non-cultural' campaigns and concentrating on core programs that better fit your expertise?
11.	Can you obtain any necessary management buy-in for the need to change?
12.	What are all the costs and intangible benefits of outsourcing? Don't just measure the cost savings of outsourcing in dollar value only - gauge also the intellectual and emotional savings i.e. your trying to get the right results internally versus handing the activity over to someone who already is.
13.	Do you need to integrate any of your I.T. systems with the service vendor?
14.	Can you manage an outsourcing program?
15.	Can you locate a service vendor who: a) is experienced in running similar campaigns and, b) you can successfully work with?

Comparing the tangible costs of an In-House C.C/T.M. Dept. to a Service Bureaus Program quotation

A warning. Only after carefully weighing and estimating the value of the above listed intangible benefits to outsourcing should you begin to examine the hard/tangible costs.

Consider also the fact that you are going to rest easier by reducing your stress levels. Why? Because your problems have now become theirs. Also consider the value of having access to a professional service as your business and program needs change. And, they will change. Be sure to evaluate all the issues. The 'soft' ones may be more difficult to quantify, but they are as just as or even more important. What maybe at first seems to be a high hourly rate quoted by the service provider, could be a bargain and a means to enhance your company's shareholder value

NEXT, ensure you have tallied the total hard costs of running your program in-house before comparing the two sets of costs against the service bureau's program quote. Internal Operations often incur hidden costs, or costs distributed across multiple departments - which can require sophisticated cost-allocation systems to correctly estimate the program's costs/expenses.

Include also in your calculations such costing as : your facilities floor space, furniture, office equipment etc, the repetitive advertising, hiring, training and staff turnover costs, program mistakes and lost time, payroll expenses such as taxes and insurance, benefits, holiday, telecommunication and computer maintenance and upgrading costs, management etc. - these alone can add 25% to 75% extra costs over the dollar-per-hour rate you pay.

Some Case Examples:

		Many U.S. and European corporations have/or are in the process of relocating customer service departments or outsourcing various call centre activities to Australian/Asian call centres. Banks, Airlines such as Swissair and, I.T. Companies, large worldwide corporations such as American Express, IBM and GE, and in the last few months a wave of Web businesses are just a few examples.
	Some typical Activities outsourced include:
	Outbound
	-	customer surveys
	-	market surveys
	-	sales lead generation
	Inbound
	-	out-of-hours call handling
	-	information services
	-	peak call overflow
	-	response to TV. and 1.800 advertising


	Some Global Companies who have established Australian Call Centre programs:
	American International Assurance	Kodak
	Amfac Chemdata	Levi Strauss
	Apple Computer	Merrill Lynch
	Astea International	Microsoft
	Beiersdorf	NEC
	Boeing	Nortel
	British Airways	Nutri-Metrics
	Cable and Wireless	Orix
	Chubb	Panasonic
	Coca-Cola	Prudential
	Delta Airlines	Sony
	Du Pont	Toshiba
	Ergon Energy	USANA
	Fuji Xerox	Unisys
	Fujitsu	Worldcare
	Gambro	Zurich Insurance
	Japan Airlines