Call Centre Outsourcing — Why It Makes Sense

Running a business is challenging at the best of times, but when the UK economy seems to be, at best, perpetually uncertain, it can feel downright impossible. And whatever the wider economy is doing, there will always be the competing challenges of customers demanding better services and lower prices and the need to maximise profits.

“Indeed, these competing pressures tend to worsen during times of economic pessimism. Consumers are keen to ensure they receive value, and investors, as always, want to ensure a good return. One of the tactics most often used to relieve these pressures has been outsourcing,” says Ralf Ellspermann, CEO of PITON-Global, a leading call centre outsourcing provider.

Outsourcing has been around since the first businesses were formed. Any business purchase that wasn’t raw materials was, effectively, outsourcing part of the processing or manufacturing. It was only in the twentieth century, however, that outsourcing in its modern form took off. Firms contracted with other companies to provide what had previously been considered core parts of a business. And a large part of outsourcing success was down to the savings that it offered.

“Managing an in-house call centre in the UK is both expensive and difficult. It comes at a significant financial and management cost. Alongside the need to procure and maintain infrastructure are the ongoing headaches of HR and staffing. And all of this will require some management overhead, even when things are running smoothly. Aside from the costs, running a call centre creates a distraction from the business’s core competencies,” says Ellspermann

The allure of call centre outsourcing comes primarily from the cost savings. A well-run call centre outsourcing provider will be around 10 to 15% lower in cost than an in-house operation. These savings come from several areas. Many are a function of scale. A call centre is likely to serve several clients, meaning that many of the overhead costs are shared, avoiding the premium a single operator of a small in-house provider might have. Things like specialist HR, supervision, and management all contribute to lessening the cost of call centre outsourcing in the UK.

The ongoing revenue savings of call centre outsourcing are significant. It doesn’t take a large call centre for those 10 to 15% savings to reach six- and even seven-figure sums. However, they also avoid the significant set-up costs for those UK businesses that might not have had had a large call centre function previously. The cost of securing and fully equipping premises is significant, and for many businesses, dedicating a large portion of their real estate to a call centre might not make good business sense.

And all these savings are before the business benefits are considered. The bottom line can be measured, and for that reason, costs drive many UK call centre outsourcing decisions. But outsourcing means that a non-core function is, largely, taken care of by an external partner. Customer service might be vital to ongoing success, but a well-developed contract can largely cover that, ensuring that required standards are monitored and met. That frees up management capacity, especially at the senior level, to focus the business’s core product or service, rather than the ancillary functions. Many UK businesses have found, although it may be difficult to quantify financially, that liberation of leadership capacity has significant benefits for their business.

For many UK-based companies, call centre outsourcing is an obvious decision. It brings significant organisational benefits. Customers get better service from a highly specialised third-party outsourcing provider. And with a UK provider, the company achieves up 15% savings on their costs. But choosing an offshore provider can increase those savings further. The Philippines, the world’s largest and leading call centre outsourcing destination, generally offers savings of around 40 to 50% while maintaining similar quality levels. “Customer service is vital; there is no point in saving money if the customer experience takes a hit. It is therefore of mission-critical importance to find and partner with a premium call centre outsourcing provider that can deliver the highest level of service,” says Ellspermann.