Why Onshoring Your Call Center Make SenseBy Jeff Wissink | Posted 2012-07-03 Email Print
Know the Risk: Digital Transformation's Impact on Your Business-Critical Applications REGISTER >
U.S.-based call centers are getting smarter about their internal cost structures, blurring the once-obvious financial advantage of offshored customer care centers.
By Jeff Wissink
For many consumers, a service call evokes frustration. The customer has a problem, can’t find the solution online and grudgingly picks up the phone, anticipating a language barrier and cultural disconnect with an overseas call center agent.
That customer service experience is the product of many cost-reduction initiatives throughout corporate America over the past 15 years. What started as a way to cut costs has, for many companies, ended with a customer satisfaction issue.
Internal company cost pressures made offshoring the call center a fairly common business practice. Management (and, frankly, the consultants who advised them) found the lure of potential cost savings, deep resource pools and “follow the sun” support cycles appealing enough to risk communication, cultural and information security problems.
It was a simple decision. Any process that was considered low-value or not a core part of the business needed to be simplified and automated where possible, or simply shipped offshore. India, the Philippines, Eastern Europe and other nations became business process outsourcing (BPO) hubs for many basic company functions, ranging from finance and human resources to front-office functions such as customer call centers.
Call centers in particular became an ideal opportunity for offshoring. Executives saw them as necessary yet costly, and despite the fact that they are customer-facing, not terribly strategic. In recent years, however, these decisions have been reconsidered, and there have been many highly publicized cases where companies have decided to bring call center operations back home. However, the offshore cost savings remain, and companies have been forced to balance the desire for a quality customer interaction with bottom-line pressures.
While it’s easy to measure the difference between per-minute talk time charges for onshore versus offshore call center agents, it’s a lot more difficult to measure the benefit of onshore call center agents. How do you measure the financial benefit of a happy customer?
There have been many attempts to quantify the customer satisfaction benefits, including the development of survey tool and myriad methodologies proffered by consulting firms and research organizations, such as the American Customer Satisfaction Index (ACSI). But “hard-benefit” numbers are tough to come by, making the ROI of moving a call center back on shore a difficult (and therefore politically treacherous) path for many organizations to take until the problem becomes so severe that there is little choice.
The fact is that call centers are anything but low-value because they provide an unbelievable opportunity to interact with customers. Companies spend millions of dollars every year marketing to existing and prospective customers, but when those customers directly contact an organization, it’s OK to provide a merely satisfactory (or, often, dissatisfactory) level of service that detracts from the overall customer experience?
Today, U.S.-based call centers—both internal within firms and U.S.-based outsourcing companies—are getting smarter about their own internal cost structures, blurring the once-obvious financial advantage of offshored customer care centers. “Homeshoring,” for example, is a maturing business model in which skilled onshore agents take customer service calls and Web chats during specified times in their homes.
This has several obvious advantages. First, sourcing highly skilled call center talent that is not tied to geography expands the pool of qualified agents. Also, companies are not forced to incur the significant overhead costs associated with a traditional brick-and-mortar call center. Finally, since people choose to work on their own schedules and receive incentives for their work, the company benefits from highly motivated workers.
Although it’s still difficult to quantify the exact benefit of an onshored call center, the cost differential is diminishing. And with all of the advantages of using U.S.-based personnel, the decision becomes easier.
For companies that are on the fence, start small. Divert 5 to 10 percent of your call volume back to the United States—leveraging one of several U.S.-based homeshoring companies—and compare the results. If your customers are happier, it may be worth the incremental expense.
Jeff Wissink, a senior partner at business transformation firm Navint, has more than 19 years of management consulting experience in the areas of enterprise transformation, IT assessments and strategy, enterprise systems implementations, custom application development and project turnaround services.