Is outsourcing in the cards for you in 2003? Are you convinced that outsourcing will by definition save you lots of money? Or are you being directed to explore outsourcing options even though you don’t think anyone can do as good a job as your team? This article tells what you can reasonably expect.

Truth #1: It’s easiest to find an outsourcer for simple tasks and large volumes
Most outsourcers do best with simple tasks such as customer service or desktop support, and will be motivated to work with you if your volume is high (dozens to hundreds of headcount). This does not mean that it’s impossible to find an outsourcer for complex tasks and small volumes, but expect both a longer search and a higher price tag. I once found several solid candidates for a client who needed to outsource a couple of agents’ worth of SAP support, so anything is possible… but low-complexity, high-volume work is much easier to outsource.

As a consequence, it’s often very difficult to find competent, affordable outsourcing for off-hours work or non-mainstream languages. If all you need is a voice on the other end of the phone, you should be able to find a nice array of candidates. Otherwise, you probably will have to do it yourself.

Truth #2: You can only outsource what you know well
(Good) outsourcers won’t even talk to you unless you can describe in great detail the type of inquiries you get and you can create a credible volume forecast. If your metrics are weak and you cannot provide that kind of information, dedicate time and energy to getting to know your business better: you can’t expect an outside party to divine what you need.

If your operation is just starting out and you have no data because you have no history, don’t look for an outsourcer just yet. Instead, build a small internal team and learn about the business so you can make a good outsourcer selection down the line. At that time, the internal team can morph into the escalation team for the outsourcer.

Truth #3: Outsourcers do not have armies of people waiting to handle your work
Many of my clients are surprised to learn that outsourcers do not have agents sitting around waiting for work, and certainly not for tasks that are above a basic level of complexity. Outsourcers have efficient systems and processes to hire and train agents, but most arrangements will need to start with several weeks of hiring and training, more for complex support tasks.

As a general rule, plan for a minimum of three months between the start of your search and the go-live date if your requirements are at all complex. Six months is a more realistic timeframe especially with complex products and larger volumes.

Truth #4: Outsourcing requires a fair amount of management
No one cares about your business like you do. You cannot expect to hand off everything to the outsourcer and never worry about it again. You must designate a relationship manager for the length of the agreement. With sizable outsourcing contracts (say, dozens of agents), the relationship manager will have a full-time job. Smaller contracts should be manageable on a part-time basis, but weekly attention is required.

Truth #5: You need a system to handle escalations
Outsourcers can do something that many support managers can only dream of: they can take their toughest cases and simply escalate them back to their clients. The temptation is so great that most outsourcing contracts provide for a cap on escalations, that is, no more than x% (often 10% for technical support) of issues may be escalated back to the client. Regardless of the contract, you need to set up a way to handle such issues, especially if you are outsourcing complex support for which the escalation ratio is always higher.

Truth #6: Outsourcers have little interest in proactive support
Outsourcers are almost always compensated on responding to customers’ requests with no incentives for them to work on contact avoidance. In fact, many compensation schemes are based on how long it takes the outsourcer to handle customer issues, with no incentives to increase the efficiency of the agents.

One of the classic methods to improve proactive support is to use data collected by the support staffers to determine common issues and find other ways to address them. Be warned that outsourcers have little motivation to collect good data so be prepared to work with the one you choose on this point.

Truth #7: Outsourcing may save you money, but it’s not a given
Almost all my clients who are considering outsourcing support would do it to save money, and they believe the savings will be substantial. The reality is not as rosy. Outsourcers keep costs low by 1) operating in low-cost areas (usually) 2) applying efficient processes to hire, train, and manage staff and deploy tools and 3) spreading their costs across several accounts, thereby exploiting the “Big is Beautiful” principle of support. If your own costs are high, your processes are inefficient, and you are looking for readily available skills, you should see significant savings, providing you manage the relationship effectively. Otherwise, your savings won’t be spectacular: remember that the outsourcer has to make a profit, too.

Ready to go?

Start with realistic expectations (the 7 truths). Negotiate the contract carefully. Manage the relationship every day. Enjoy the savings and the peace of mind. Good luck!


About the author
Francoise Tourniaire is the founder and principal of FT Works, a consulting firm that helps technology companies create and grow their support operations. She is the author of “Successful Support Outsourcing”, a practical guide to selecting and managing support outsourcers. You can find a full description at http://www.ftworks.com/SuccessfulOutsourcing.htm. The “Big is Beautiful” principle of support is presented in her book “The Art of Software Support” published at Prentice Hall. You can contact Francoise at 650-559-9826 or FT@ftworks.com.