Article : Choosing The Right Call Center Outsourcing Partner
In today's changing global economy, offshore call center outsourcing has become a sensible strategy for many customer service companies in the United States. However, when deciding on an offshore partner, firms are caught in a balancing act. On one side, managers are feeling pressure to improve their customer service, but on the other, they are under pressure by senior executives and shareholders to reduce costs. Companies are attempting to meet both objectives when deciding on their offshore partners. When making the outsourcing decision, managers must first determine their decision criteria and balance cost against other priority objectives. Although less expensive outsourcing countries like India, Malaysia, and the Philippines are dominating the headlines, Datamonitor, a market analyst company, reports that many U.S. call centers are not moving overseas, but "nearshore," just north of the to Canada. Peter Ryan, a Datamonitor callc enter analyst, states, "We expect the Canadian call center growth to be swift. It will be driven to a very large extent by United States companies, because of low cost, accessibility, stability, common culture, and infrastructure in Canada" (Myron, 2003). border,
High Quality At
A Lower Cost
There are four main qualities - low turnover, proximity, cultural affinity, and political stability – that are the driving force behind Canada's lead in call center outsourcing.
Canada's low turnover rates can be attributed to high unemployment rates in some areas, and an overall stronger work ethic amongst Canadians. Datamonitor points out that some provinces, such as the Maritime provinces (eastern Canada), have experienced unemployment rates in the double digits for several years. Given this, it is likely that the higher the unemployment rate, the more likely people are to stay in a secure job. Another reason attributed to low turnover is that Canadians entering the call center industry view it as a long term career move, not just a temporary job used until a better one comes along (Myron, 2003).
This lower turnover rate experienced by Canadian call centers compared to the U.S. ultimately translates into additional continuity and greater stability for outsourcers. This factor proves to be much more important in the long run than the initial cost savings encountered in less expensive offshoring countries (McCracken, 2003).
Proximity…Leading To Cultural Affinity
AMR Research ,a technology research firm, reported three general levels of interaction in call centers (see Figure A below). Offshore centers in eastern countries such as India can provide advantages at level one, but Canada can also help customers at the additional levels of service, two and three.
Figure A: Defining General Service Levels For Call Center Outsourcing
Source AMR Research 2003
Lance Travis, VP of outsourcing strategies for AMR Research, expressed the benefits to outsourcing to Canada, a culturally similar nation that "can effectively manage your most strategic customers at the higher levels at a lower cost and you have much better quality due to lower turnover. You are not only saving money, but you are providing better service to those customers" (McCracken, 2003).
Proximity and cultural similarity also becomes an important factor with respect to the type of work being outsourced. According to Service Management Strategies Consulting, "Some projects cannot be sent offshore so easily. They need more vendor/client integration, planning and coordination. Otherwise, the result is poorly defined projects, volatile applications, or work that is frequently changing. In these situations, Canadian nearshore outsourcing offers benefits of lower labor [compared to the U.S.], and closer proximity" (Bowen, 2002).
Canada's ideal nearshore location presents a clear advantage over offshore outsourcers and translates into reduced risk for U.S. firms. Not only are operations close by, Canadians' familiarity with the American culture ultimately converts into better customer service compared to offshore call centers. The Aberdeen Group submits, "High value, low volume transactions are best done in-house or with a U.S. or Canadian outsourcer. The cost of making a mistake and potentially losing a customer is much more significant. While you can start to acclimate agents in India to U.S. culture, it takes a while, and there is something lost in the translation" (McCracken, 2003).
The political climate of an offshore provider is an important issue to research before making a long-term business commitment. Canada's history speaks for itself and helps reduce anxieties of outsourcing services to another country.
Added Bonus :
Decision –What Is Your Criteria?
A report done by A.T. Kearney evaluated 11 countries based on three criteria: cost, environment, and people (see Figure B below). To determine the right outsourcer for you, you must first determine the relative weight of importance for each category.
Figure B: Criteria And Weights In Country Analysis
About 24-7 INTouch:
Today's Tip of the Day - Listen
More Editorial From 24-7 Intouch
Published: Wednesday, February 9, 2005
Upcoming EventsSubmit Event