Why do you think companies outsource, what benefits does outsourcing provide them?
In the past, it was all about cost savings and 'labor arbitrage', but today outsourcing is much more of a strategic tool. It's not about 'sending non-core functions out' anymore. In fact, I've seen that just the opposite is true in contact center outsourcing: companies are realizing that some of their most important customer-facing (and revenue producing) activities are better accomplished through outsourcing.  Outsourcing contact center operations lets companies scale up quickly to meet the demands for campaigns or seasonal promotions, it lets them pick the best provider for a particular challenge (complex communication, large volumes, cross selling, etc.).


What would you say are the top risks of outsourcing?
Well, we've certainly seen many cases where major outsourcing initiatives have failed to deliver the anticipated benefits. The news is full of stories where companies are renegotiating major outsourcing deals, switching providers or falling back to in-house contact centers. The ultimate risk is the financial downside and, worse, the impact on customer relations that a poorly executed contact center outsourcing strategy can bring. If a company neglects the importance of outsourcing governance they are likely to see poor performance and missed financial and customer satisfaction objectives.


What challenges do companies face when outsourcing their call center functions and how should they minimize risk to their core business?
In my experience, the top challenges are:

• Building an appropriate portfolio of contact center capabilities: defining the in-house and outsourcing capabilities mix for best performance, flexibility and scalability
• Optimizing contact center selection for particular objectives: particularly for outbound campaigns, the selection of the right provider is key to realizing the objectives
• Ongoing outsourcing governance: managing the outsourcing relationships, tracking performance and constant communication are key

What are the top 3 questions a company should ask a potential outsourcer?
In my experience, there are some fairly simple but often overlooked questions which a company should ask when selecting their outsourcing service providers:

1. What is the provider's track record in meeting SLAs and performance indicators in similar contracts?
2. What is their technology capability for tracking performance, agent activities, etc.?
3. How do they manage all aspects of ongoing outsourcing governance: tracking, communications, issue resolution, reporting, etc.?

What industry sector outsources the most?
My experience is that financial services and telecom companies are the earliest adopters of major contact center outsourcing initiatives and are the sectors seeing the most success.  Both sectors share some common attributes:

• Very large subscriber bases
• High volumes of customer interactions
• High growth rates
• Highly competitive markets

These characteristics present some particular challenges that are very well suited to outsourcing.


How have the campaigns and projects companies outsource changed over the last 5 years?
I alluded to this before.  In the past, outsourcing was mostly focused on finding 'non core' activities and looking for the lowest cost service provider to manage the process. This was the first wave of outsourcing that has really played out. In the past five years we've seen that outsourcing has become the enabler of what some call the Extended Enterprise or even "Corporation 2.0" - where companies are redefining their operations around a more loosely coupled organization structure defined by processes and business objectives. My feeling is that over the next five years companies will stop referring to 'outsourcing' per se as the structure of corporations is redefined. The Extended Enterprise will be a given (at least for those companies that succeed).


Do you feel that a client of an outsourcer should have unrestricted access to agents/reps working on their behalf and why do you believe this?
This is one of the challenges of outsourced contact centers, how much visibility and control does the client side have? How much do they need? It's really a question of outsourcing governance. That is, how do you work most effectively with your service providers? What happens "after the ink is dry" on the contract? This is where outsourcing success is determined. So, clients should think in terms of how they are able to build solid outsourcing governance relationships with their provider: manage communications, track performance, handle issues and, in general, have a very efficient way to get the transparency they need into the operations and performance of their outsource service providers. But if you think about the benefits of outsourcing: the leverage it provides, the ease of matching capabilities to requirements, the ability to scale quickly, none of these are best served by micro-managing down to the agent level.


What management and motivation challenges do outsourcing companies face with their staff?
As companies have transitioned to contact center outsourcing, the real challenge is in outsourcing governance. How do the in-house managers get the visibility and level of control they need with multiple outsourcing providers?  We've seen quite a few companies that struggle with this in the early implementation of their outsourcing strategies. In terms of motivation, every company will likely face their own set of challenges. In general, if the in-house staff realizes that being effective managers in this new type of corporate structure will in fact open up major career opportunities, the motivation issues take care of themselves. We've seen that successful in-house outsourcing managers are essentially writing their own ticket as they are proving their outsourcing governance abilities and are able to allow their companies to succeed in their outsourcing initiatives. Believe me, every CEO appreciates it when they are able to deliver the promised benefits and bottom-line impact of their extended enterprise strategies.


How can outsourcers and clients ensure a fair partnership agreement?
In part it's dependent upon what happens up front: vendor selection and contract negotiation. There are some good, specialized advisors out there that can help companies handle this part of the outsourcing lifecycle. But we've seen too many companies that try to manage their outsourcing operations just by the contract document. SLAs are important, incentives are important, but the analogy I like to use is that managing by SLAs alone is like is like trying to manage an employee by the letter of the job description used in hiring them. This type of management neglects the importance and benefits of building the ongoing relationship, establishing effective communication, and responding to new challenges. So, the key in outsourcing governance is really outsourcing relationship management - establishing a strong basis for ongoing success in this new type of organization structure.


What role do associations play in helping companies select and use outsourcing services?
I think there are some good organizations out there. I'm active in the International Association of Outsourcing Professionals (IAOP), and I know the Sourcing Interest Group has strong corporate participation. These types of organizations can help in providing peer expertise and fairly neutral recommendations in best practices and service provider selection. If you look at the educational content provided and the types of industry events that the associations hold, you'll find a good reference source.

About Vinay Gupta:
As co-founder of Janeeva, Vinay is developing a new type of web-based software as a service (SaaS), focused on managing the complex business relationships emerging within today’s Corporation 2.0 organizational structures. He has served as President of three venture backed microelectronics technology companies and was co-founder of BlueGill Technologies. Vinay is an Adjunct Professor at the University of Michigan School of Business and is a frequent speaker on Business Strategy and Outsourcing topics.

About Janeeva, Inc.:
Janeeva is focused on enabling corporations to rethink their organizational strategies and build a flexible, high-performance, connected network of specialized external service providers. Janeeva provides web-based, on-demand tools for managing outsourcing governance. Janeeva''s customers include major financial services, healthcare, insurance, telecom and technology companies.