Gartner: Step Carefully in Outsourcing Customer Service

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    Gartner is garnering a lot of attention with its proclamations that the majority of organizations outsourcing customer service and call centers will fail to achieve cost targets and can lose customers in the process. Hear, hear! I've worked for some organizations that outsourced customer service and others that considered it a valuable differentiater, I say, it's tough to do it right when you're an outsider who gets no exposure to the entity being serviced. (In the last place I worked, it was even tough to get our "audience experts" to spend any time among the audience they served and represented at tradeshows or other activities. The very prospect seemed to make them nervous.)

    But back to the real story. According to ComputerWeekly.com, here's what research director Alexa Bona said at a recent summit in London:

    Historically, outsourcing has been seen as a way to reduce costs by getting others in cheaper locations, or with greater economies of scale, to own the processes that are not core to the business. Companies are encountering problems because they don’t approach this strategically. They usually lack information to make meaningful cost/benefit analysis and often focus on inappropriate or unmeasureable service levels and cost metrics.

    Yet, Ms. Bona said, eight of 10 organizations fail to achieve targets for costs savings. As Nick Huber reported, 60% that "outsource parts of the customer-facing process over the next three years will see customers switch to rivals and find hidden costs that outweigh any potential savings they derive from outsourcing."

    So what's to be done?

    …Gartner recommends that companies create a customer-facing processes. It said that businesses should judge the supplier based on customer satisfaction or other quality metrics to measure and motivate outsourcers rather than "operational metrics" such as the number of calls handled by the supplier. Users should also not underestimate the management time required to make an outsourcing relationship work…

    Here's other coverage of the same topic:

    ComputerWorld: "Gartner: Customer-service outsourcing often fails"
    http://www.computerworld.com/managementtopics/outsourcing/story/0,10801,100203,00.html

    Geek.com: "Outsourcing can cost more"
    http://www.geek.com/news/geeknews/2005Mar/gee20050307029461.htm

    Cnet.com: "Gartner: Outsourcing costs more than in-house"
    http://news.com.com/Gartner+Outsourcing+costs+more+than+in-house/2100-1022_3-5600485.html

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