March 21 2007

Contact centre outsourcing black hole cost £55m pa

UK companies are wasting £55 million every year on outsourced contact centres because of poor management of providers. Research and analysis by contact centre interaction management software provider Exony identifies ten key areas where UK organisations could target improvements when outsourcing contact centre operations, leading to contract savings of 4.5% per annum.

The company has a white paper, which can be downloaded from its site.

Press release follows:

Better management of outsourcing providers would save UK companies £55 million a year in improved contact centre performance as well as enhancing service for customers. This is according to research and analysis by interaction management software provider Exony, which believes that there are ten key areas where UK organisations could be targeting improvements when outsourcing contact centre operations, leading to contract savings of 4.5 per cent per annum. These include resource administration, more accurate forecasting and using management information to ensure that service level agreements (SLAs) are met and optimum billing methods are in place.

Industry statistics show that 14 per cent of the UK's 5,935 contact centres and 581,000 agent positions are outsourced[1]. Exony calculates that improving organisations' ability to measure and manage their outsourcing providers would save £675 per annum for each of these 81,340 outsourced agents, making an annual total saving of £54.9 million in the UK alone. This would pay for an additional 3,660 customer service agents[2], dramatically improving efficiency and cutting call waiting times.

"In an increasingly competitive global marketplace efficiently delivering the finest customer service is a key business goal for organisations of all sizes," said Ian Ashby, CEO, Exony. "Managed correctly, outsourcing provides the agility and skills to achieve this. However, our analysis shows that a lack of control is fuelling a £55 million black hole that is costing UK companies dear. Already, around 50 per cent of companies that outsource are dissatisfied because expectations are not being met[3] and our research demonstrates that UK firms are spending too much on their outsource contracts. Improved ability to measure and manage is needed to plug these gaps and deliver on the outsourcing promise."

By outsourcing, companies aim to benefit from a fast and effective solution to their customer service needs, either by working through a single outsourcer or in combination with internal and external resources in a Virtual Contact Centre (VCC) environment.

Advances in IP technology mean that the outsourcing and VCC markets are expanding rapidly. The number of outsourced agents is forecast to increase by 31 per cent between 2006 and 2011[4]. However, the complexity of managing outsourcing relationships and gaining an accurate picture of operations spread across multiple sites and providers is dramatically reducing the benefits organisations are able to achieve. Issues such as increased management and reporting costs, lack of a single view of all operations and an inability to move resources in real-time are all holding back adoption.

Exony's Top 10 areas for action, taken from its outsourcing white paper, are:

1 Better routing and reporting on calls - savings through better integration and reporting on telecoms links with outsourced providers.

2 Improved management of extended networks - lower administration costs when managing resource changes, such as adding agents.

3 Enhanced contractual terms with outsourcers - through a more detailed view of outsourcer performance, organisations can measure performance and decide whether to continue, amend or terminate contracts.

4 Picking the most effective outsourcer billing method -better management information enables organisations to choose the optimum billing method for their needs, such as per minute or per transaction.

5 Ensuring contractual compliance - through a more detailed view of outsourcer performance organisations can measure and pay against SLAs

6 More accurate forecasting of current and future needs - detailed forecasting to ensure that the right resources are in place to deliver customer service levels without wastage.

7 Better visibility of agent churn - more granular reporting enables organisations to pinpoint newer or less productive agents and negotiate lower rates with outsourcers.

8 Cost savings by not relying on outsourcer-produced reports - if organisations produce their own custom reports without dealing with outsourcers it enables faster, more cost-effective service.

9 Single version of the truth - avoid inconsistencies by creating and measuring agreed metrics across the whole contact centre infrastructure.

10 Data partitioning - be able to easily provide access to specific data for outsourcers and particular managers rather than allowing full view of potentially sensitive information.

Exony's Virtualized Interaction Manager (VIM) is designed to provide a full view and complete control of a Virtual Contact Centre and its resources. Exony VIM empowers business managers to utilise resources from multiple sources, such as home and back office workers, in a seamless and integrated manner, removing both expense and complexity when managing contact centre networks.

Foot Notes

[1] http://news.bbc.co.uk/1/hi/magazine/6353491.stm and http://www.callcentre.co.uk/ccf/article.asp?ID=749

2 Source: Exony, based on average agent salary of £15,000 per annum

3 Computer Weekly, September 2006

4 Source: MBD http://212.21.97.148/magsites/cd/content/text/marketanalysis-select.asp?ArticleID=2603