Why ‘cheap’ outsourcing is not the best approach
As a trusted Business Process Outsourcing (BPO) partner, we’re often approached by companies whose primary driver is to reduce costs within their business. And whilst cost reduction should always be an outcome of any outsourcing programme, we always advise our clients that it shouldn’t be the only focus.
This may sound a little counterintuitive. After all, surely the sole point of outsourcing is to achieve cost reductions within a business?
As a BPO with over 21 years of service under our belt, we will always strive to deliver economies throughout the lifetime of a relationship with a client. But the primary driver for outsourcing back office and customer service functions should be the freedom and flexibility it gives the rest of the business, alongside the delivery of Operational Excellence, by working with a partner who has extensive experience of designing and running comparable operations.
In any highly-competitive industry, and particularly in the UK Energy market, it’s extremely difficult to differentiate your business. And with increasing regulatory attention on customer service – after a series of well-documented failings from a number of Energy Suppliers – it’s critical that your operational processes are delivering. But that focus on Operational Excellence can take up significant chunks of management time and effort, meaning there is little remaining band-width for developing those key points of differentiation.
By outsourcing back office and customer service processes to a trusted and experienced partner, who has the in-built expertise to manage resource planning, IT requirements and specialist training, you are reducing time spent within your business – which, in turn, reduces internal costs.
Any emphasis on getting a ‘low cost’ service – reducing unit costs of labour and transactions – will almost certainly result in a lack of concentration on that key deliverable of ‘operational excellence’. Instead it will be a race to reduce costs, without any focus on excellent service delivery.
It will also mean that the relationship you have with your provider can only be focused on delivering a low cost service leaving no head-room to deliver service improvement or added value functionality.
Here at Abtran, we strive to deliver cost reduction as a by-product of constant service improvement, process optimisation, automation, building a close partnership, gaining a detailed understanding of your business and using our expertise to leverage economies of scale. Outsourcing at its best must be an equal partnership – and if cost reduction is the only objective – that partnership will not have solid foundations.