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"The midmarket is riding in on the capacity that's been built by the big companies," says Pawan Verma, a director at PricewaterhouseCoopers Advisory. "With VoIP [Voice over Internet Protocol] and all the investments in capacity the service providers are making, there is finally a value proposition in the midmarket. For midmarket companies to be successful in a globalized arena, they need to be able to scale on a dime, focus on their core competency with limited resources and retain customers across the globe. Call centers are not the focus of most of these companies."
Yet for many CIOs, any type of outsourcing is a hush-hush topic. Few companies are willing to speak openly about their outsourcing arrangements, even when they are domestic. "They prefer to not let their customers know that they don't do direct support," notes Katherin Dockerill, senior vice president of marketing and business strategy at Stream, a Dallas-based outsourcing company that runs contact centers in the U.S., Europe and Asia.
And while the market continues to grow, Gartner Inc. analyst Esteban Kolsky says the expansion rate for all outsourcing has slowed to 2% to 3% a year, which is less than half of what it was previously. "Outsourcing is increasing, but the vast majority of businesses still don't outsource," adds Forrester Research Inc. analyst Elizabeth Herrell. "It's not really a dramatic savings once you get done with everything. The results have not been what a lot of companies expected."
Factor in the cost of outsourcing a call center and the potential for things to go awry, and no wonder companies are wary of making the jump. "Most people will need to spend more money than they expect," warns Stan Lepeak, managing director of research at outsourcing consultant EquaTerra Inc. "People hear you can do it 40% cheaper in India. That's only if you do it right. Most buyers are happy. But there have been notable problems. You want to avoid being one."
As a rule of thumb, Herrell says, companies tend to run their own call centers until the number of operators hits triple digits. "At 100 agents or less, you don't see any outsourcing," says Herrell. "It becomes more appealing and cost-effective with larger call centers." Here are steps to figure out if an outsourced call center is in your future and, if so, how to go about finding and managing one.
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