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Assessment: Does It Make Sense?
For 1-800-Flowers, the decision to partially outsource call center operations was a no-brainer. The Carle Place, N.Y.-based company posted $782 million in revenue last year and is forecasting that sales will hit $930 million this year. The company runs its own 700-person call center. But three mega-holidays -- Christmas, Mother's Day and Valentine's Day -- account for a lot of the company's revenue. During these spikes, the company often needs to add 1,000 operators, which it does by contracting with four different providers.
"We outsource because we have to," Orsi says. "We have a steep spike on three major holidays. The concern is the peaks. How do we hire a massive amount of people for a small window?"
For other midmarket companies, the decision may not be so obvious. Lepeak, for instance, suggests that CIOs start with a thorough company assessment to determine current call center quality. Look at what your competitors are doing. Benchmark your own call center operations' price and performance. "Are there quality problems? Identify them," Lepeak says. "One way to solve them is to invest in training or technology. Outsourcing is another option."
Andy Sealock, a senior associate at consultant Pace Harmon in Vienna, Va., says CIOs have to figure out what role the call center plays in the business. What is the most crucial metric: Efficiency? Sales generation? Quality?
"Are you really committed to building and running a call center as a core competency?" he says. "There are a lot of hard things you have to be good at. You need to get really good at technology, recruiting and hiring, workforce forecasting and managing. If the answer is no or maybe, you might want to look at a call center outsourcer. But you also have to determine what your call center strategy is."
Pawan Verma notes that many upper-midmarket companies may have to sacrifice growth if they choose to scale their contact centers organically. "As you reach $2 billion in revenue, you have to have 24-by-7 coverage and peak demand," he says. "It's quite possible you need multilingual support; you have to cater to the Hispanic population -- and do all that without too much fixed cost or capital expenditure. The opportunity cost of not doing outsourcing becomes tremendous if you're a $2-billion company that wants to be a $4-billion company in a few years."
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