Beyond Cost Savings: Innovations in the Outsourced Contact Center
1 Jan, 2007
By: Anand SubramaniamBusiness process outsourcing (BPO) has grown immensely in the last decade. Companies are being drawn to this model by compelling cost savings, especially driven by the offshore model and the desire to focus on their core business.
The list of functions being outsourced has expanded beyond contact centers and customer service organizations to embrace a range of enterprise operations including human resources, supply chain management, procurement and facilities management. According to research firm IDC, global spending on BPO is expected to exceed $650 billion in 2006, with a compound growth rate of more than 10 percent expected through 2009. In addition to assessing what to outsource, businesses must choose between offshore and onshore outsourcing.
Early adopters of offshore business process outsourcing in general, and contact center and customer service outsourcing to offshore locations in particular, have found that saving money can also come at the expense of quality, compliance, customer loyalty and brand reputation.
The exponential growth in customer interactions and the shift to a multi-channel service environment --- supporting not only voice interactions but e-mail, chat, live Web collaboration, SMS/Instant Messaging and Web self-service among others --- have brought added complexity to the task of effectively managing contact centers, whether based onshore or off. In fact, the Internet has spawned new generations of consumers who not only like, but expect, to find a broad choice of communication channels, “self-service” options and the ability to seamlessly move from one channel to another in interactions with their favorite brands. Along with this comes an expectation of speedy response times, accurate and consistent answers, and rapid resolution and fulfillment.
Failure on the quality and compliance fronts and increasing customer expectations have presented an opportunity for BPOs to go beyond their traditional cost value proposition and bring quality and process innovation to the enterprise, while boosting their competitive differentiation and operating margins. On the other side, BPO-savvy enterprises that excel in customer service have employed strategies, tactics and technology enablers to expand the strategic business value of in-house contact centers and are now applying the same approach to take the quality, compliance and value derived from their BPO partners to the next level. Here are five such innovations and practices:
1. Deploy Customer-Interaction Hubs
End customers are becoming increasingly impatient, demanding higher levels of service from the brands they buy. This is further compounded by customers wanting and using multiple channels to get service. For example, a customer might use Web self-service, send an e-mail and then follow-up with a phone call or initiate a chat session regarding a particular inquiry. The last thing a customer wants is to be a glue across these channels and multiple interaction sessions, having to repeat content and context as he or she goes across channels or proceeds to subsequent interactions to complete a “long-lived” service transaction.
The best customer service organizations, whether in-house or outsourced, ensure seamless integration across all these communication channels, including phone, fax/postal mail, e-mail, chat, co-browsing, SMS/IM and self-service. The Customer-Interaction Hub (CIH) approach, advocated by thought leaders such as Gartner, recommends the consolidation of all such interactions in one platform that also includes business rules, workflow, knowledge base, application administration and integration frameworks. An approach that can be used by in-house or outsourced contact centers, the CIH model lowers cost of ownership and ensures a “stand-out” customer service experience provided from a complete view of customer interactions; consistent, high-quality service across channels and agents; and superior efficiencies within the contact center and customer service organization. BPOs that use this approach are able to deliver superior service for their clients’ customers, while improving operating margins.
As an example, an international bank uses the hub approach to provide unified service to treasury management clients across virtual agent self-service, e-mail and live Web collaboration.
2. Implement Knowledge-Guided Transactional and Interactive Processes
Knowledge management technologies such as a reasoning engine can go beyond informational and diagnostic customer service to guide interactive processes such as contextual up-sell and cross-sell and value-added advice, while ensuring compliance with government regulations and organizational best practices. These tools can “clone” the characteristics of your best agent across the entire agent pool and significantly increase the odds of success in your in-house or BPO-enabled service operation.
In addition, a robust knowledge base can provide significant operational advantages. These include revenue-generating opportunities and operational efficiencies achieved through:
- Increased first-time fix rates
A key performance measure in many in-house and outsourced contact centers (it often comes with a contractual penalty, if not met by the outsourcer), first-time fix rates can be increased significantly by empowering agents with consistent service knowledge. - Reduced agent training times
Easy access to knowledge cuts agent training times from months and weeks to days. The more complex the questions, or the larger the number of products handled, the greater the potential for reducing training time and service costs. - As an example, a large international bank empowers agents with limited training to be effective in helping small businesses open new accounts, a complex process that typically requires several years of process and compliance training.
- Better agent leverage
With a knowledge base, agents can be “multi-skilled” to handle more products and question types than would be normally possible. This is especially important, when contact centers get consolidated during mergers and acquisitions. Agents are often required to have 20-pound brains and immediately handle questions on offerings that span the merged business entities. - Closed-loop product development
The ability to gather customer feedback in service interactions is invaluable. The knowledge base can be enhanced with this intelligence to identify and act on problem areas or sales opportunities. This can help your company build better products and services, foster closer end-customer relationships and achieve higher profits.
3. Bulletproof Your Service-Level Management Processes
Brand loyalty is being tied increasingly to how well companies fulfill their service-level promises. You can bulletproof the service-level delivery capability of your in-house or offshore contact center by applying the following best practices:
- Set service levels based on rigorous strategic and operational criteria
- Manage customer expectations through proactive, cross-lifecycle communications
- Take a Six Sigma approach to service level management, listening to the voice of the customer
- Provide emotion-aware service. While this can be done more easily on the phone, it can be implemented in electronic channels such as e-mail and chat, by looking for certain keywords and phrases and routing the interactions to the right agents or their supervisors accordingly
- Leverage robust workflow management that includes re-routing and alarms in the form of e-mail or pop-up alerts that get triggered in the case of impending service-level breaches at the agent or the queue level. This may include alerts sent to supervisors
- Use service-level analytics and real-time dashboards for timely corrective action to ensure service-level compliance.
4. Extend BPO-Enabled Customer Interaction Management to Supplier, Employee and Partner Interaction Management
Interactions are fast becoming a key driver of competitive advantage. It’s then no surprise that innovative companies and their BPO partners are starting to leverage robust interaction and knowledge management systems to go beyond customer interactions to optimize interactions with employees, suppliers and demand-chain partners.
As an example, a large BPO, focused on human resource management, uses a customer-interaction-management system to handle employee interactions for multiple enterprise clients; while a leading offshore BPO uses a customer-interaction-management system to manage accounts-payable interactions and fulfillment processes with suppliers for a large automotive client in the U.S.
5. Risk-Proof Your Offshore Outsourcing Strategy
BPO-savvy companies have been able to leverage offshore outsourcers successfully by using proven best practices to reduce risk. Among examples are:
- Carefully assess if a BPO strategy, onshore or offshore, is the right fit for your enterprise and your current situation
- Select BPOs that can provide multiple references in your sector, while bringing innovations and proven best practices from leading companies in your sector
- Outsource electronic channels such as e-mail and chat before phone customer service. This neutralizes the accent issue
- Outsource less complex service tasks such as informational customer service before more complex types of service such as diagnostic and advisory customer service
- Look at potential ROI and not just the cost when evaluating BPO alternatives
- If you do not have a knowledge-powered CIH in place, pick a BPO that has a CIH infrastructure that enables a complete view of the customer and allows you to seamlessly add new interaction channels such as web collaboration and SMS
Done right, BPO-enabled contact center and customer service innovation, onshore, nearshore or offshore, can drive cost savings, brand loyalty and competitive advantage for the enterprise. The aforementioned innovations and best practices, applied appropriately to a business, can create a win-win situation for BPOs and their clients, where BPOs are able to differentiate themselves, deliver process innovation and enhance their operating margins, and clients are able to leverage BPO-enabled innovation for cost savings and competitive advantage. In-house contact centers, too, can benefit from these best practices.
