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Contact Center Outsourcing Black Hole Costs North American Companies Over $300 Million Every Year
12 Mar 2007
Potential Savings in U.S. and Canada Through Improved Forecasting, Reporting and Control Could Pay for 16,000 Agents, Argues Exony
Better management of outsourcing providers would save North American companies over $300 million a year in improved contact center performance as well as enhancing service for customers. This is according to research and analysis by interaction management software provider Exony, which believes that organizations that outsource contact center operations could realize annual contract savings of 4.5 percent by targeting 10 key areas for improvement. These areas 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 5 per cent, or just over 3,000, of North America’s 60,000 contact centers are outsourced . Furthermore, of a total of more than 3.3 million agent positions in the U.S. and Canada, 10.5 percent or 354,000, are outsourced. Exony calculates that improving organizations’ ability to measure and manage their outsourcing providers would save $900 per year for each of these outsourced agents, amounting to an annual total savings of $319 million in North America alone. These savings could pay for an additional 15,948 customer service agents , 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 organizations 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 fueling a $300 million-plus black hole that is costing companies in the U.S. and Canada dearly. Already, around 50 per cent of companies that outsource are dissatisfied because expectations are not being met and our research demonstrates that these 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. 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 organizations 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 recommendations for taking action to improve call center efficiency, taken from its outsourcing white paper, are:
1 Better routing and reporting on calls – savings through better integration and reporting on telecom 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, organizations can measure performance and decide whether to continue, amend or terminate contracts.
4 Picking the most effective outsourcer billing method – better management information enables organizations 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 organizations 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 waste.
7 Better visibility of agent churn – more granular reporting enables organizations to pinpoint newer or less productive agents and negotiate lower rates with outsourcers.
8 Cost savings by not relying on outsourcer-produced reports – if organizations 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 center 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) solution is designed to provide a full view and complete control of a Virtual Contact Center and its resources. Exony VIM empowers business managers to utilize 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 center networks.
Virtual Contact Centers and Outsourcer Management, Exony’s latest business white paper, outlines the advantages of VCCs in both customer service and efficiency terms and how to improve the way organizations measure, manage and contract with their outsourcer suppliers. The paper demonstrates how an improved ability to measure and manage a VCC can deliver major savings, irrespective of contact center size. Based on more than 20 years’ work in the contact center marketplace, it is available to download for free at http://www.exony.com/solutions/white-papers
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