Call centers: The benefits and challenges of outsourcing - GE Capital

GE Capital

Call centers: The benefits and challenges of outsourcing

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GE Capital


Whether representing an initial strategy or eventual necessity, companies of all sizes invariably resort to phones to provide customer support. This support usually takes the form of a call center, with a number of agents hired to answer questions from clients, administer product support and provide services to retain or expand business. When building a call center either from scratch or by fortifying an existing center, companies often get to the point of growth where they consider tapping into the resources of an outside vendor.


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GE Capital Outsourcing is a way to disperse risk, lower costs and enable in-house talent to focus on critical issues. It also can help companies improve their own call center procedures—enabling them to glean insights and best practices from more experienced vendors. However, there are commensurate risks when a company turns over control of a service to an outside vendor. Poor customer service, data breaches and spiraling costs are all risks that must be considered and can prove costly. At GE we believe that even experienced companies that excel at operating call centers can benefit from outsourcing at least some call center functions—as long as they are aware of potential pitfalls and plan accordingly. In addition, a company must internalize the monitoring of its own metrics and overall performance of call centers, including the operations that it outsources. The case for outsourcing A company may consider hiring an outside vendor as a way to fortify its call center operations for a variety of reasons. One primary reason is disaster recovery. When considering the potential effects of disasters, many people focus on the remote possibility of extreme calamities such as hurricanes and earthquakes. But more common and mundane problems such as power failures can inhibit the functioning of call centers. Having a facility in another location minimizes potential downtime caused by such occurrences. A company can also engage an outside vendor to handle calls in different time zones— enabling a company to extend servicing hours or provide round-the-clock service. Another benefit of hiring an external vendor to handle call center functions is that this allows companies to tap into expertise that can prove useful in improving internal service. For example, if a financial services company engages an external vendor who specializes in their industry to take part of their volume, the


Call centers are a necessary part of many businesses, and companies should carefully examine the benefits of outsourcing and taking their call center operations overseas. However, they should also examine the cons carefully before making strategic decisions about moving call center operations in a new direction. company has a benchmark against which it can track its own performance on key metrics—from firstcall resolution to average handle time. Even highly experienced companies can improve their processes by gleaning insights from companies with deep, global experience in this field. It is often cost effective for companies to outsource call center services to smooth out peaks and valleys in demand and supply. For example, a company can ask a vendor to supply temporary agents during peak periods that arise due to seasonal demands or large product promotions. This enables a company to avoid hiring additional agents and redeploying staff—and to manage the workload of its existing employees. Finally, a company might consider hiring a vendor to analyze its call center performance. A vendor can provide independent, unbiased feedback to elevate customer service. The offshore option One permutation of outsourcing is offshoring, in which companies relocate a business process such as a call center from one country to another. Many companies consider offshore outsourcing for several reasons. First, labor costs can be significantly lower in some parts of the world, such as India, the Philippines and Guatemala, all of which emerged in previous decades as offshore call center hubs due to their supply of low-wage employees.

In many overseas markets, call center jobs are considered very attractive and such jobs appeal to college graduates. Thus, it is not just the abundance of low-wage employees, but low-wage, highly-educated employees that heightens the appeal of these markets. Second, overseas call centers also provide an extension of service hours, allowing companies to staff phones 24 hours a day. Handing off operations at night in the US to a center in Asia means that phones can be manned around the clock. The third argument for turning to offshore call centers is to take advantage of disaster recovery benefits. Having sites scattered around the globe may help to ensure that data won’t be lost or service interrupted in the case of a natural disaster or power outage. Potential pitfalls exist in establishing a call center overseas. Typical problems include language barriers that could hinder effective communication and customer service. As well, fluctuations in foreign exchange rates and higher-than-expected costs of doing business overseas often make overseas outsourcing a far pricier reality than companies initially expect. Companies often underestimate travel expenses, which escalate quickly as executives fly overseas to communicate corporate culture and service expectations.

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GE Capital The companies that have succeeded with offshore call centers consider their relationship with a vendor as a partnership and become very involved in recruiting, hiring, training and ongoing monitoring. Another key best practice is to ensure that offshore agents are exposed to company-specific training—knowing about stores, products and services, for example. Call centers are a necessary part of many businesses, and companies should carefully examine the benefits of outsourcing and taking their call center operations overseas. However, they should also examine the cons carefully before making strategic decisions about moving call center operations in a new direction. Key takeaways • Even the most seasoned companies should consider outsourcing at least some call center capabilities—though they should be aware of potential challenges. • Outsourcing call center functions can provide after-hours help, smooth out demand spikes, and provide coverage during outage and disaster. • Experienced companies can glean insights into best practices from established outsourced companies, enabling them to improve their operations. • Outsourcing overseas provides numerous benefits but may also entail higher-than-expected expenses and cultural challenges.

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