| Experts
Archive |
 There has been a certain amount of scepticism surrounding CRM in the past, but now it seems like everyone is doing it. Is this the case?
Andy Wood, MD, GI Insight |  |
Communicating intelligently with existing customers is critical, and marketing spend is heavily weighted towards this pool. But businesses cannot afford to neglect prospecting activity. So, what techniques can businesses adopt to ensure that the search for new customers is both targeted and cost-efficient ?
David Jefferies, Marketing Director, Pitney Bowes | |
How can I apply the principles of unified communications to CRM to boost productivity and enhance service?
John P. Joseph, VP Corporate Marketing, Envox Worldwide | |
What makes excellent service?
Mark Greatrex, Product and Services Director, Lakeview | |
What are best practices for displaying ads in email newsletters?
Andrew Osterday, Solutions Director, eMarketing, Premiere Global Services | |
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 | Alexa Bona, Research Director, Gartner Inc. You Asked
What are the business risks associated with Customer Service outsourcing? | | |
The Expert's Answer
Research shows there are significant risks associated with outsourcing customer service. Historically, outsourcing has been seen as a way to reduce costs by getting others in cheaper locations, or with greater economies of scale, to own the processes that are not core to the business. Companies are encountering problems because they don't approach this strategically. They usually lack information to make meaningful cost/benefit analysis and often focus on inappropriate or unmeasureable service levels and cost metrics.
According to Gartner, companies that outsource successfully can achieve cost savings of 25 to 30 percent. However, Ms Bona warned that a poorly managed model can reduce the quality of the customer experience, dilute the brand values of the company and fail to deliver cost savings.
Most companies neglect to manage the customer service experience sufficiently and often lock the organization into long-term outsourcing contracts without conducting appropriate pilot testing. Also there are risks related to knowledge management and retention, accentuated by the fact that customer service outsourcing providers have staff attrition rates of up to 70 to 80 percent, compared to an average of 19 to 25 percent in in-house contact centres.
Gartner concluded that there are benefits to be gained from outsourcing non-core processes, but rewards will not be instant and organizations should adopt a controlled and phased approach. Organizations new to business process outsourcing should start by outsourcing onshore. Don't be lured by the apparent cost appeal of placing end-to-end customer services processes in the cheapest offshore locations without conducting a thorough assessment of the transition methodologies of the off-shore provider, as well as your own ability to manage off-shore relationships.”
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