Over the past six months we have noted a critical increase in press chatter regarding the realities of onshore, nearshore and offshore call center BPOs. While the appeal of low cost operations, low cost labor are appealing to numerous firms (typically those who's compensation/goals are aligned with short term cost cutting) forward thinking firms are quietly moving call center operations back to the country of origin. Why?
The short answer is, "because customers are demanding service delivery that meet their language and cultural requirements." While these cost are not presented on balance sheets they do producing glaring challenges in post call customer satisfaction surveys, net promoter score (NPS) studies and ultimately to customer lifetime value of these aforesaid customers. Sysco, Capital One, Khol's department stores, Nationwide Insurance and speciality gourmet direct market Harry & David all have expanded U.S. based call center operations while decreasing offshore exposure with great success. Others still have leveraged home agents to meet customer demands and onshore control facilities costs: Apple, Verizon Wireless, Converges and Xerox Pharma Services notably.
As a manager the financial challenges are clear. How do you control call center labor and operations costs while delivering positively on customer expectations. Migrating offshore call center operations inshore often require a one time capital expenditure (yes, a negative on your quarterly balance sheet) and a potentially higher cost of service per call (largely driven by higher labor and facilities cost). While decisions of this type are not exclusively made based on the cost of triple net leases, workstation costs or labor costs - these factor are business realities.
THE GOOD |
THE BAD |
THE UGLY |
| Offshore BPO call centers still excel at basic data entry, basic application processing and document scanning (all largely unskilled labor and/or basic IT processes). | Consumer consumers demand quality voice interaction and companies seeking customer loyalty must choose between "lower costs" and meeting customer expectations. | Political pressures both domestic and overseas create an ever growing hostile business environment for offshore operations. |
| Low value customer sales and lead generation. If your new customer acquisition model is of the "spray and pray" variety - offshore BPO call centers will likely work for you. | Business continuity risks are heightened offshore due to factors such as currency exchange rates, wage inflation, high employee turn-over rates, terrorism and other volatility. | Court of public opinion routinely produce net-negative PR for companies engaged in any form of offshore operations. |
| Hyper-specialized services such as telemedicine, claims processing, HR processing, etc. are a good fit for offshore and near shore BPOs. | Availability of English speaking workers continue to diminish as more and more companies elect to offshore call centers. As demand exceeds supply - more and more new hires exhibit lower and lower English proficiency - further frustrating American consumers. | Too good to be true financial benefits are common. When compared to domestic technology, backed by domestic agents and management onshore call centers deliver better cost control and customer satisfaction metrics. |
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