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Evaluating Outsourcing Customer Service Cost: Is it Worth It? - The Connection - Blog

Evaluating Outsourcing Customer Service Cost: Is it Worth It?

Most companies perform some kind of customer service, whether that involves handling and processing orders, back-end support, or both. In many companies, the ongoing debate is: should we handle the process internally, or would outsourcing customer support be more cost effective?

Many companies view this question as one of cash flow — how much (more) is outsourcing than managing customer support in-house. But evaluating and comparing these options is more complex than simply cash flow. Here are some other key factors:

Labor Costs (and sometimes the only cost that is considered)

We all get that there is a differential in base wage from internal vs. outsource, but internally we also have the somewhat hidden costs that include benefits, sick pay, vacations, holidays, and the training and management of the agents. Then we need to figure in the cost of recruiting associated with the original hire and then the recruiting, rehiring, retraining costs associated with attrition. And now that we mention attrition, are we factoring in all of those costs?

Other Hard Costs

Companies that operate in-house call centers often do not realize, are not aware of, or do not include all the hard costs, so they do not have a complete picture of what they are spending to do it themselves. Therefore, they do not realize the true cost of insourcing.

This is one reason companies come to us. We help them see what other costs are involved that they may not have considered. Costs often overlooked include the space to house the agents, furniture, equipment, managers, trainers, Quality Assurance personnel, investments in technology for a voice platform, voice analytics, reporting platform, etc.

Opportunity Cost

It is also important to look beyond direct expenses.  There are MANY opportunity costs associated with running your own internal contact center including items such as:

  • What if you’re out of space and considering an extra 5,000 sq. ft. on the floor above? How much square footage are you utilizing to house CSRs?

  • Are you factoring in all the overhead associated with an additional X employees?  Perhaps the CSRs and all the associated supervisory and management personnel are putting you over the line for certain HR regulations. And if it’s not HR, it’s any number of administrative costs associated with having an additional team of employees.

  • Do you have the critical mass to scale up all the technology needed to successfully operate a 21st-century contact center? There are a lot of systems required — telephony, workforce, HR, payroll, quality assurance, etc.

  • What is the ongoing capital investment for technology, security, reporting, etc? Is it possible that you could wind up limiting investment in equipment, R&D, etc., for your core business because of the ongoing investment in a call center?

  • And what is the opportunity cost if you operate your own center and then don’t keep it current? How will that affect your ability to perform the customer service and support function at the level that you and management determines is necessary to support your customers.

And then there is the human side — how you are utilizing your people? It is one thing if you have 50,000 employees and you need an extra 20 people for the call center. But what if you have a 100-person company and you need 50 people for your call center? Or you have just 50 regular staffers but need 100 to handle customer service?

If your company is virtual — a very small staff using cloud-based services — operating a call center requires that either you shift your focus or hire a new set of people to ramp up a quality contact center. It gets worse if call center needs are likely to fluctuate for seasonality or other reasons. Now, the tail is clearly wagging the dog. With all the systems and support required, you are now in the call center business instead of focusing on your company’s core offering.


Is outsourcing customer service cost worth it? Well, the contact center is on the front line, dealing directly with your customers every day. You do not want to cut corners and deliver a bad product to your customers as their first impression, or any impression.

If your internal call center is already a solid operation, then the cost may be worth it. Otherwise, spending a little more to outsource to ensure customer service excellence will be money well spent, and in reality, once you have all the costs at your fingertips, it may really not cost any more at all.


Publish Date: January 29, 2019 5:00 AM

2020 Buyers Guide Speech Technology


Agara is an autonomous virtual voice agent powered by Real-time Voice AI. It is designed to have intelligent conversations with your customers, vendors, and partners without any assistance from human agents. It can handle a wide variety of calls including inbound customer care calls, outbound lead generation calls, appointment scheduling calls, and overdue payment recovery calls.

Agara is available for several industries including banking, insurance, retail, e-commerce, airlines, and telecom. Powered by advanced Real-time Voice AI that understands speech in real-time, automatically determines the right process to follow and guides the caller along in the process with natural conversation.
PH: +1 (512) 333 4634

Call Center Studio

Call Center Studio
Call Center Studio is the world’s first call center built on Google and is one of the most secure and stable systems with some of the industry’s best reporting. It is one of the most full-featured enterprise grade systems (with the most calling features, one of the best call distribution, outbound dialing features and integrations—including IVR, AI Speech Recognition, blended inbound/outbound calling and includes Google’s new Dialogflow and Speech API. Call Center Studio is the absolute easiest to use (with a 10 minute setup), and is the price performance leader with lower equipment cost and less setup time.
PH: +1 512-872-7565

Call Tracking Metrics

Execute automated actions based on words spoken by your customer.

Our intelligent word detection and transcription tools make it easier for you to decipher the content of your customer conversations and automate action based on those insights.

Transform the audio of your calls into speaker-organized scripts so you can easily search your call log for specific words from a conversation, or automatically detect when words of intent are spoken by your customer.

Listen in on and highlight common patterns in order to execute triggers to initiate a new action or workflow, such as emailing a manager if the word “cancel” is spoken on a call. You can also set up to automatically redact content from a transcript, such as sensitive health information transmitted on a call.
PH: 8005771872


Daisee builds technology that empowers people to solve problems by making interactions simple and smart so they can have a more significant impact, be more productive and be better at what they do. We believe incremental improvements carry huge potency and provide exponentially greater change for the better.

Genesys customers can now automate risk and quality management using Daisee’s speech and sentiment analytics and remediation workflow software. Daisee helps improve customer experience, ensure regulatory compliance, identify missed commercial opportunities & training requirements as well as provide valuable insights back to the business directly from the frontline – the true voice-of-...
(read more)
PH: +61404697151


Advanced speech recognition and natural language expertise that routes callers by simply asking ‘how can I help you?’. It allows customers to use their own words to ask for what they want and steers them to the right place.

Menus are eliminated altogether and contact centres can use a single inbound telephone number.
PH: 01442 458300

MattsenKumar LLC

SmartSpeech – The Best In Class Speech Analytics Software

An all-inclusive speech analytics application that enables you to visualize your audio using state-of-the-art speech recognition, transcription, and text analytics technologies.
PH: +91 99026 10044

Voci Technologies Incorporated

V-Blaze Speech to Text
Our GPU-accelerated, AI-based technology enables you to deliver greater insights to the contact center by transcribing audio into analyzable text.

- Transcribe large volumes of recorded audio quickly
- Integrate transcripts with your analytics or business intelligence platform
- Reduce your hardware footprint and minimize total cost of ownership
PH: 412-621-9310


Voxjar is your one-stop-shop for driving better phone calls with your customers. We're a modern Conversation Analytics and Call Coaching Platform.

- Custom Charts and Dashboards give you the freedom to analyze calls from the highest level down to the details of each conversation.

- AI-Powered Speech Analytics transcribes, searches, and analyzes your reps' phone conversations, at scale.

- Quality Assurance and Call Coaching tools let you evaluate and improve agent performance with a human touch.

- Long term recording storage for historical analysis

All of these together provide the holistic, easy-to-use software that you need to manage a modern call team and create better con...
(read more)

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