The Whys (and Caveats) of Contact Center Outsourcers Leveraging Operations and Technology Services

Jan 30, 2015

Outsourcing of any kind is a notoriously highly competitive thin-margin business.  Not surprisingly, outsourcers are constantly on the lookout for new opportunities to grow their volumes, expand margins, and increase client loyalty.

So it is not surprising that outsourcers are being urged to leverage contact center technologies with their clients to reach those goals. This includes managing non-voice channels and improving agent performance.  Frost & Sullivan’s reports have made that point.

That sounds fine. In fact I heard the same points 20 years ago when I began covering and working in this industry. 

But there are three caveats that deserve mention here:

  1. Hosting has made contact center technologies less “special”.  Any company can access cloud solutions without sinking huge sums on licenses and installation. 
  2. The big driver of new equipment investments has always been to cut costs: principally labor.   But customer interaction management is the prime product that contact center outsourcers have to sell. The growing demand for automated self-service and productivity-enhancing solutions may shrink the need for in-house and outsourced agents.
  3. Outsourcers have technology-enabled solutions as well as operational expertise to sell. After all they “walk the walk” every day with their contact centers. Outsourcers are highly experienced in evaluating new solutions and in optimizing existing ones to obtain the highest degree of reliability and functionality from these tools for the money.  Their business depends on delivering strong results for their clients at high levels of agent productivity.

But advising other companies to improve their contact centers, while a logical business move, risks undercutting outsourcers’ core business.  Why should companies have outsourcers handle their customers when they can provide them with their “secret sauce” to improve in-house people, processes, and technologies?

This is the same dilemma faced by outsourcers in the hosting market.  Moreover, filling agents’ screens and seats is a vastly different product set and sale compared with filling network pipes. The hosting market is also becoming very competitive with the OEMs finally getting into the game. They can undercut reseller third parties like outsourcers: while offering updates sooner and direct access to engineering to solve critical issues. OEMs also can manage companies’ hosted to on-premise (or vice-versa) solutions migrations.

Contact center outsourcers have three principal value propositions: cost savings, flexibility, and trained and experienced teams handling non-core or highly specialized contacts.  Outsourcers who specialize in fulfillment and returns management, in addition to contact center services, offer these same reasons for companies to do business with them. 

(It is those outsourcers who stand to benefit the most from the omnichannel trend as they have the proven ability to handle products, which enables them to serve online and bricks-and-mortar retailers.)

Outsourcers have to stay on top of technologies and operations best practices in their contact centers to stay competitive. But outsourcers should also offer consulting, systems integration, hosting, and omnichannel programs only if they can be executed exceptionally well, are sufficiently profitable to merit the investments, and there is a long-term commitment to support them from the C-suite.

Category : Customer Contact

Brendan Read


Brendan Read is Senior Industry Analyst with over 25 years’ experience covering business, communications, staffing, and technology. He has worked in, prepared reports, and blogged on a wide range of topics including customer contact, CX, CRM, IoT, social media, supply chain, and BC/DR. He also has backgrounds in construction, manufacturing, materials, resource extraction, site selection, and transportation. He examines the broad economic, environmental, innovation, political, and social mega trends, and their impacts on businesses, markets, and society.

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