Outsourcing is the process of obtaining goods or services by a business firm from another firm. In such an arrangement, the firm that contracts the process is known as the client and the firm that delivers is known as the service provider or vendor. Outsourcing has been prevalent in the business world for ages. Initially this practice was primarily confined to the manufacturing industry wherein business firms in developed economies engaged in ‘contract manufacturing’ or ‘outsourced manufacturing’ to third world countries to reduce production costs.
Outsourcing in the services industry emerged much later. It started in the early twentieth century, with businesses hiring specialized agencies to manage their non-core functions such as legal, accountancy, taxation, public relations, and advertising amongst others to external service providers. Outsourcing non-core functions to external service providers allowed businesses to focus on their core business processes and reduced their operational costs leading to increased productivity.
In today’s business parlance, outsourcing refers to the practice of outsourcing non-core business functions of an organization to a third party business process outsourcing (BPO) services provider. Similarly, call center outsourcing is the process of contracting the management of voice based customer service processes to specialized call center outsourcing companies.
Call centers defined simply are workplaces wherein human agents receive or make outgoing telephone calls to existing or prospective customers of a company. Outsourced call centers are specialized call center outsourcing companies that manage inbound or outbound call center processes for their clients.
The modern day outsourcing industry began in the late 1990s with major advancements in the field of technology, telecommunications and wide scale spread of the internet. New age technology tools and advanced telecommunications networks reduced the cost of voice calls between nations and made it possible for organizations to deliver voice based support services to their customer from remote locations at a fraction of prevalent costs without affecting the efficacy and performance of the process. Realizing the potential of this business model to lower their operational costs, a majority of global corporations started setting-up their customer service centers in off-shore destinations like India, the Philippines, Eastern Europe and other low cost South East Asian nations. In the early days, most organizations operated on a captive off-shore call center model which meant they owned and operated the call centers in a low cost destination and reaped the benefits of low labor costs – ‘labor arbitrage’ – offered by these destinations.
Concurrent to these developments, a set of entrepreneurs in these low cost destinations began experimenting with a similar business model and started establishing third-party outsourced call center companies in these countries. Also known as non-captive BPOs, these companies provided outsourced call center services to multiple clients and were independently owned, as opposed to captives, which were owned and operated by a single company.
In the initial years, voice based call center processes was a major driver for the growth of the global outsourcing industry. Destinations such as India, the Philippines, Poland and Romania were the destinations of choice for most global corporations as they provided a large pool of highly skilled, educated, and ‘neutral accent’ English-speaking natives. Also, most of these resources were young and fresh out of college, which meant they could be hired at reasonably lower costs compared even to local labor markets. With all the right ingredients, the global business process outsourcing industry grew exponentially in the following years providing economic growth and employment to millions in these new geographies. It also brought about a paradigm shift in the manner organizations operated in an increasingly globalized business environment.
Global BPO Market Growth
The size of the global business process outsourcing market was estimated at USD 162 billion in the year 2015 according to a report by global research and consultancy firm Gartner Inc. The report stated that the BPO industry had grown at a compounded annual growth rate (CAGR) of 6.3% between 2001 and 2015 and was expected to grow at a compounded annual growth rate (CAGR) of 4 percent for the next five years till 2020. Another report, in the same year by Global Industry Analysts Inc. projected the global market for business process outsourcing services to increase to grow to USD 220 billion by the year 2020. The standalone market size of the global contact center industry, a subset of the BPO industry is estimated to reach USD 9.7 billion by the year 2019 according to a 2016 report by global research firm Technavio.
Statistics clearly prove that the global BPO industry is on a roll and continues to grow at break-neck speed. Amongst the various sectors that are expected to show tremendous growth are insurance, banking and financial services, technical support, telecommunications, consumer goods and retail, e-commerce, travel and logistics, manufacturing and public services and government. The United States would continue to be the largest market, for call center outsourcing services followed by Europe and Asia Pacific regions.
In a customer survey research report, published by Deloitte multinational professional services firm a majority of BPO customers listed availability of labor and cost of labor as a key determining factor in selecting new contact center locations for their business. This was followed by consumer demands, quality of labor, political climate, language skills, and proximity to client location, regulatory environment, tax laws, and time zone considerations.
The early 1990’s witnessed massive liberalization of the Indian economy. Government controls were eased and private and foreign investments encouraged. Several important sectors, previously under the strict regulation and monopoly of the state were deregulated. It led to an era of massive investments by foreign investors and the private sector in key industrial sectors in the country. The telecommunications industry in India was amongst the biggest benefactors of this new economic wave and contributed significantly to the economic growth of the country in the coming years.
Internet Protocol (IP) telephony, an advanced technology for voice calls introduced in the country during this period drastically lowered the costs of international voice calls. This new technology coupled with favorable government policies, a large talent pool and cheaper labor costs catapulted India as the leading business process outsourcing destination in the world. With several other added advantages, the BPO industry in India transformed itself into a multi-billion dollar industry in a short period of time and provided employment to thousands in the country. It also contributed significantly to the nation’s GDP and India became the go-to destination for every large global corporate wanting to reap the benefits of outsourcing.
In the following years, several new destinations like the Philippines, Romania, Costa Rica, South Africa have emerged in the global outsourcing map. But India, continues to regain its status as the dominant leader in the global outsourcing industry with a market share of 56%.
According to a NASSCOM report, India had more than 500 BPO companies/outsourced call centers/KPOs and 150 plus global shared services centers of major corporates. The standalone revenues of the BPO industry was estimated with at USD 18 billion in the year 2012 with projections for the industry reaching an upward of USD 50 billion by the year 2020.
Call center outsourcing that primarily includes voice based BPO processes had also registered significant growth in the country in spite of stiff competition from Philippines. The bundling of new age technologies like cloud based telephony and data analytics by call center outsourcing companies in the country resulted in these companies achieving an edge over competition in the market.
Nowadays, call center outsourcing is on the rise. It is so because companies can achieve business objectives easily if they have a prestigious call center service provider on board.
Nowadays, organizations don't hesitate to outsource call center services because they know if you are not good at something, let someone else handle it. And call center outsourcing companies have always brought desired results for their clients to the table. But, is it good to believe a call center outsourcing company blindly? No of course! This is so because call center outsourcing has both pros and cons.
After being familiar with above-listed pros & cons, you are now likely to understand that if call center outsourcing is beneficial to businesses, it can be harmful too. Thus, it is prominent for organizations to always outsource call center services to a renowned vendor.
At the present time, every company wants to outsource call center services in order to enjoy the benefits that outsourcing offers. However, organizations often face unnecessary hassle in the later stages after joining forces with a wrong call center outsourcing company.
Outsourcing call center services, in a nutshell, will be fruitful for your business if you have joined hands with a right vendor, otherwise, there will only be negative consequences.
Here're a few steps that should be on your checklist if there's a wish to partner with the right call center service provider:
By virtue of this 5 step checklist, you are likely to be partnered with an ideal call center outsourcing company, which means your business will progress in a way it should be.
Currently, call center outsourcing is the talk of the town as it is helping businesses in securing a bright future. Unlike MNCs, small business owners always have confusion about whether availing services from a call center outsourcing company would be proved beneficial or not.
Today, we are going to shed light on some factors that will explain where call center outsourcing could score for your business and where it will flop. So, let's get started.
Score: Significant cost savings
The major benefit of call center outsourcing that attracts business owners is 'Significant cost savings.' By means of outsourcing, businesses can save a big chunk of money, which usually gets invested in operating an in-house call center.
Flop: Lack of knowledge about the business or products
To provide marvelous assistance to customers, it is imperative to have a good knowledge of the company and its products. This is where the effectiveness of call center outsourcing goes down. This is so because call center service providers' representatives often don't have an insight into the client's business and products, which sometimes creates unnecessary problems during customer interactions.
Score: 24/7 support
24/7 support is another attention-grabbing aspect of call center outsourcing. Call center service providers always increase their clients' business availability by rendering immaculate customer service round-the-clock.
Flop: High security risk
'Security risk' is what comes with call center outsourcing as a negative facet. To outsource call center services, companies have to provide crucial and classified customer data to the vendor, which indirectly, increases the probability of a leak. It can't be neglected because this not only leads to a tarnished brand image but also results in high customer defection.
In this day and age, where business owners are supposed to play every card right, getting a prestigious call center service provider on board is imperative. This is instrumental because a renowned call center outsourcing company always helps its clients to run a business with flying colors. Owing to the very same reason, every organization shares one common goal: 'Hunt down the best call center service provider.'
When the talk is going over successful call center outsourcing companies of US, you will always find one name in the list: 'Go4customer.'
Since 2001, Go4customer has been providing call center services to its clients. With the experience of more than a decade, Go4customer has always surpassed clients' expectations.
In order to ensure there's no drop in the quality of call center services, Go4customer always stays abreast with the ever-growing technology, thereby, enjoying a long-term relationship with clients.
Here's the list of call center outsourcing services Go4cutsomer offers to its clients:
So, if you own a business and want to take it to the next level with the help of a prestigious service provider, you can choose Go4customer for call center outsourcing.
Call center outsourcing has always been surrounded by myths and misunderstandings. Even, some companies prefer to bear a loss, but don't agree to outsource call center services. This happens because they believe all the misconceptions surfacing on the internet.
Today, we will lift the curtain on top 5 myths revolving around call center outsourcing:
Myth #1: Call center outsourcing is more expensive than running an in-house call center.
This can be all but not the truth. Why? Because, call center service providers always help their clients to save a significant amount of money. Plus, it is also ensured that all the operations get carried out to perfection.
Myth #2: Nobody uses the phone, thus, there is no need of call center outsourcing.
Again, this is not true because 60% of customers make a call whenever they have queries or want satisfactory resolutions to product-related issues. This is what the latest industry reports have revealed. Hence, call center outsourcing is important.
Myth #3: Call center outsourcing is only beneficial for big businesses.
This is what SMEs usually think, however, this is not more than a misconception. Outsourcing companies offer prodigious call center services for small businesses at a nominal rate as well.
Myth #4: Better quality can be ensured by running an in-house call center.
Guess what, this is also a delusion! Customarily, ensuring better quality while running a call center is quite difficult because there's a high possibility that you may need more resources to do some specific tasks perfectly. This is where the significance of every call center outsourcing company snowballs, as call center service providers always have more than enough resources to seamlessly take care of all operations.
Myth #5: Customer needs won't be taken care of properly by an outsourced call center.
It is not true either because call center service providers that possess a colossal experience of rendering customer service always know how to live up to expectations during support interactions. Therefore, call center outsourcing could be the key to securing a stronger customer base.
In today's era, it is a daunting task for companies to run a multichannel call center. This is so because securing desired results while running a call center is no longer an easy task as you have to be ready with all the required resources that include avant-garde technology, robust infrastructure, and most importantly a horde of support agents.
Bringing such resources could be very expensive, which is evidently not good for the business's bottom line. This is where call center outsourcing comes into the picture. It is because companies can enjoy seamless business growth after joining forces with a prestigious call center service provider.
Here're the top 10 reasons how call center outsourcing could be fruitful for businesses:
Hence, if you are a business owner and really have an unquenchable thirst for success, get a reputed call center outsourcing company on board without wasting more precious time of yours!
Call center industry has always been applauded for its contribution to keeping the whole IT sector in a prospering position. At the present time, running a call center be it inbound or outbound is nothing less than an arduous task. This is so because it is instrumental to have pertinent experience.
As we know, relevant experience can't be bought as it just could be gained after a hard work of many years. That's the main reason why most of the businesses outsource call center services.
At the present time, it is imperative to have a reputed call center service provider on your side. This is fundamental because that's the most effective way to render splendid inbound and outbound call center services, which leads to a strengthened customer base and desired sales results.
By means of inbound call center outsourcing, businesses not only enjoy customer base expansion but also experience the benefits of good brand recognition. By virtue of outbound call center outsourcing, on the other hand, organizations witness high sales of products/services, which, in turn, leads to better business expansion rate.
Thus, if you are operating a business and willing to stay in the market for ages, outsource call center services as fast as you can.
"Do what you do best, and outsource the rest."
- Peter F. Drucker
Nowadays, the significance of call center outsourcing is on the boom. It is because when you let professionals handle those tasks in which you are not good at, odds of getting better results are definitely in your favor.
Evidently, we aren't trying to make any statement that running an in-house call center is a bad business practice. But there is no point in performing such tasks that are significantly consuming time and money without guaranteeing satisfactory results.
Now, the question that arises is, 'When should a company outsource?' Well, the answer is pretty simple - if you aren't convinced with the results your in-house team is bringing, choosing a well-known call center service provider will be proved a sagacious decision by all means.
Here're the 3 major factors to why enterprises should outsource call center services:
All in all, if you don't want to juggle core & non-core business functions in tandem, call center outsourcing is the option you should be choosing.
These days, organizations consider call center outsourcing is a key to securing long-term customer relationships and bolstered brand image. But the thing that puts business owners in a difficult position is, 'Choosing a trustworthy call center service provider.'
There are many vendors available in the market that promise first-rate call center services for small businesses and multinationals as well. However, you cannot trust any call center outsourcing company blindly as there are many tricksters that assure several things to just lure potential clients. Thus, choosing a truthful call center outsourcing partner is paramount.
Are you about to get a call center service provider on board? Here are some tips to take into account:
From the business's perception, every penny counts, therefore, it is imperative to talk about any type of extra charges. Additionally, many hoaxers are out there that force clients (who have already outsourced call center services) to pay additional money for carrying out operations after business hours and on holidays.
Being a business owner, you most probably have a money-saving mindset, and there is nothing wrong about that as you can secure a better growth rate if you know how to make most of every penny. At the same, however, it is important to not let your guard down while getting a call center outsourcing company on board.
Owing to the intention of saving a few extra dollars, companies regret in the later stages. This happens because they choose the wrong vendor to outsource call center services. It goes without saying, when government policies are disobeyed, legal issues are likely to come out to shatter the business's reputation and result in a mammoth financial loss.
In the business world, it is believed that success doesn't come overnight as you have to be patient for it. The same thing applies when it comes to joining forces with a call center outsourcing company. Put simply, don't be careless or impatient while outsourcing call center services.
Besides checking Google's search results, you should have a word with friends that also own a business and have an insight into how to reach to the right outsourcing partner.
In this day and age, corporations are showing a great interest in call center outsourcing as they are familiar with this fact that it can to help to build a strong brand image and keep the problem of customer defection at bay.
The major benefit call center outsourcing brings for business owners is significant cost savings. Currently, every organization (that wants to outsource call center services) is in search of a renowned vendor that has pocket-friendly pricing.
Owing to the very same reason, the economy of the USA is somewhere suffering. If industry reports are anything to go by, there's a significant drop in the economy of the US since the vendors in India, Ireland, Canada, etc. have emerged as the best call center service provider.
Currently, India is the perfect outsourcing destination for companies because call center service providers of this country are offering prodigious services at a lower rate than the vendors present in the USA. High availability of resources is the factor that puts India's call center service providers in the dominant position.
According to recent reports, US call center agents cost around $20 per hour to a company whereas Indian customer-facing employees cost only $12 per hour. It is a notable difference, isn't it? Now, you shouldn't face any problem while understanding why US call centers are going through a hard time.
But the positive fact is that 35% of MNCs are still choosing US-based call center service providers for business purposes. Therefore, it would be exciting to see how the US economy will progress in the near future.