Outsourcing a call center: A cost-benefit analysis
One of the many decisions one must make in customer service leadership is whether or not to outsource any business process. Businesses like to outsource their call center services as they grow. This helps them save time and resources. Call center cost is one of the many concerns when it comes to business processes - do we outsource or insource? Which is more cost beneficial? To answer these questions, we have outlined below a cost benefit analysis for outsourcing a call center, along with some process-based benefits of call center outsourcing.
Understanding business process outsourcing for your company
Before diving into the details of outsourcing call center services, it is important to understand the market size of business process outsourcing (BPO). According to Statista in 2019, the global market size of outsourced services was valued at 92.5 billion U.S. dollars, increasing approximately seven billion U.S. dollars from the previous year. This number is only proof that more and more businesses are outsourcing their processes. In fact, Gartner predicts that “the BPO market is forecast to grow at a five-year CAGR of 3.5% in U.S. dollars (3.9% in constant currency) through 2023.” The report further states that “the market will be driven by robotic process automation, digital services and artificial intelligence.”
With the growth of these technologies and their key role in BPO, it is crucial to stay ahead of the times and consider outsourcing certain processes where possible. Outsourcing a call center can prove to be beneficial if you partner with the right organization. Not only does it save your business a lot of time, money, and resources, it also allows you and your employees to focus on more strategic and business oriented activities such as product development, marketing, service development and more. Furthermore, it saves you costs of buying necessary equipment and technology to build an internal call center team, while allowing you to stay ahead and evolve with the digital times.
5 ways in which outsourcing can reduce overall call center cost
One of the main discussions when it comes to outsourcing is the call center cost involved. Some companies can be skeptical about putting their customer service in the hands of another company. With the wrong partner, it can affect your customer base, your brand reputation, and your sales. However, with a right business partner, you can derive insights that might just do wonders for your business. Here are 5 ways your business can reduce overall costs through outsourcing your contact center:
- Saving on hiring/recruiting/training costs:Outsourcing your contact center needs means you don’t have to spend time and money on looking for a contractor or new employee. You also save money on training costs for new employees and at the most you might have to attend a couple of calls with your business process outsourcing partner.
- Investing in the latest technology:The right BPO partner will have the latest technology and tools to ensure that their services are up-to-date and the latest, all at a fixed cost. This saves you from investing in technology for an internal contact center, as well as having to constantly update the technology as it evolves.
- Infrastructure costs saved:Having an internal contact center means creating more space and spending more money to build the infrastructure. Outsourcing your call center services saves you the cost of all the supplies, equipment, and technology that comes with a call center.
- Refocusing budgets: Outsourcing your contact center at a set cost can help you re-evaluate your budget and focus it on other aspects of your business.
- Increased profit margins:By outsourcing your contact center services, you are giving room for your employees to be more efficient and productive. Outsourcing also gives room to reduce fixed expenses. In the long run, this increase in productivity and reduction in fixed expenses can result in more profit.
How to calculate outsourcing costs
Now that you know the cost benefits of outsourcing, how do you calculate the outsourcing costs? The first step is to identify the costs you will be avoiding if you decide to outsource your call center services. The best way to approach this is to list down the costs associated with this business process if it is insourced. Some examples are salaries, equipment, technology, and infrastructure. Once this is done, take out the variables that will no longer be paying for when you outsource the call center.
Once this is done, contact your outsourcing partner to get a quote on the total price. Once you have the total price, calculate the difference between the costs saved from step 1, and the price provided by your outsourcing partner. Below is an example of the calculation:
In-house costs that can be outsourced: $1000
Cost of outsourcing from our partner: $800
In this example, you save $200 which can be used elsewhere in your business. If the result you get helps you save costs, this justifies your option to outsource your call center. Outsourcing is almost always more cost effective. In fact, Deloitte’s 2020 global outsourcing survey found that “70% of companies cite “cost reduction” as motivation to outsource.”
Other benefits of call center outsourcing
The monetary savings will be a continuous benefit to your company as you outsource your contact center. There are also many process-oriented benefits such as:
- Contact center analytics:The right outsourcing partner will have access to technology that allows you to gather data and analyze it. Tools like AI and chatbots can gather relevant information about customer interactions which can be used to better understand your business pain points and how to improve your customer service.
- Omnichannel engagement: Outsourcing your contact center services to the right partner can result in the right form of customer service. A traditional BPO may still focus on calls and emails, but the new-age BPO knows that a customer contacts you on multiple platforms. Enable customer interactions across any digital channel, with support for phone,SMS, and chat.
- Improve customer service response time:Now that you have a dedicated team to handle your contact center, the response time to get back to customers will improve and result in a happier customer.
Things to consider when call center outsourcing
Finding the right partner is important when outsourcing any business processes. As times are getting more technologically driven, it is key to find a partner that is able to support you as tech evolves. Specific to call center services, it is crucial to consider some of these points when looking for your next BPO:
How can I implement new contact points such as sms and chat in my contact center?
What kind of technologies are you using to create a better impact on customer service?
What impact does AI have on your business?
What is your digital transformation plan or how are you staying relevant to the constantly evolving digital times?
How can you help me save on call center costs while staying digitally relevant?
Many companies today are outsourcing their contact center services. The key concern is finding the right partner to work with so that your company’s customer experience is maintained and improved where required. Asking the questions above can help you evaluate different aspects such as cost benefits, technological relevance, and operational efficiencies of your potential outsourcing partner.
Why InflectionCX?
InflectionCX offers AI-powered BPO services for businesses to transform their stakeholder engagement. Our team of highly trained professionals utilizes Inflection’s AI software stack to deliver cost-effective, superior experiences to businesses and our agents are trained in voice and multi-channel support that transforms the customer experience. Moreover, bolstered by massive infra savings, our smart BPO can perform tasks with a far lesser workforce then traditional solutions, helping businesses to save money.
Contact us today to explore how Inflection can help you deliver superior experiences within your budget!
