Telemarketing
Outsource or in-house?
An overview
Outsource or keep in-house?
There’s no easy answer, but here are some issues and factors to consider.
In recent years outsourcing of many aspects of business has grown to its highest levels. Outsourcing of services started with financial services such as accountancy and payroll, and today every aspect of a business can be outsourced, as the boom in internet & virtual businesses shows.
Common aspects of a business to be outsourced are professional services including sales and marketing, maintenance, customer service, accountancy, IT, training, HR, legal and transport logistics.
The reasons for outsourcing
Let’s now look at the benefits of outsourcing:
· Cost · Experience · Expertise · Reliability · Scalability
Let’s look at each of those in detail to understand fully the benefits.
Cost
For any company, cost is vital, as is cash flow. In all aspects of outsourcing the hourly rate is always higher than the straightforward hourly staff cost of an in-house operation, however the client pays a set amount, with no further costs to add. No NI, no PAYE, no holiday or sick pay, no management costs, no associated rent or rates or fuel costs. As a result, the client always knows what the service will cost and what the deliverables will be. The cost element can also be seen as a return on investment and efficiency savings
Experience
An outsource partner should be chosen on the basis of proven experience. The level of expertise that a client will require may be at a cost that many could not afford on a fulltime internal basis. The expertise offered is based on how to deliver results or how to provide a superior service to that of an internal
resource. Expertise will be based on relevant experience of a sector or service. A large brewer may choose a logistics company that specialises in brewing companies. A firm of builders’ merchants needing to increase trade accounts would look to a marketing services company that has experience of that sector.
The reason to look for relevant experience is that a client will gain benefits from working with an Outsourcer who knows their business and their industry, and can deliver relevant solutions.
Expertise
An outsource partner must be able to demonstrate real expertise in relevant fields. Areas such as IT support, accountancy services and HR provision require detailed up-to-date knowledge of relevant software, systems, professional practices and ever-changing legislation. Ask for details of the professional qualifications and CVs of people who will be assigned to particular areas of business.
Reliability
An outsource partner needs to be reliable. Reliability can be judged by past results, by asking for case histories and testimonials, from seeing an established track record of results. Ask for a portfolio of evidence from your potential outsource partner.
Scalability
As your business grows, so your outsource partner needs to be able to grow with you. What capacity is available, what resources are in place to cope with sudden growth, with new projects, with working in new locations, potentially in other parts of the UK?
The reasons against outsourcing
Why companies keep functions in-house:
·Cost ·Knowledge ·Management
Cost
A common concern in deciding whether to outsource an in-house function is the amount already invested in a well-established department. The company has already invested in set up, infrastructure, processes, management, training and development. In this scenario, many companies just don’t consider outsource to be of benefit at all.
Knowledge
When an operation is in-house it is easier to monitor performance on a daily basis. A manager can physically see the operation, talk to staff and obtain instant feedback on performance. The level of knowledge and expertise within an established company has significant value to it and should not be underestimated in an outsource versus in-house debate. Knowledge can be seen as very similar to cost, the knowledge of the product or service, processes, management and training.
Management
In-house management are able to make quick decisions, intuitive decisions, decisions that can aid a company working in a fast changing industry. The management structure is clear, the management team is well structured and objectives clear.
So what are the other options?
While companies may look at a traditional choice between in-house or outsource, today there are other options such as co-sourcing or in-sourcing.
Co-source
Co-sourcing is a combination of both in-house and outsource. This method is common in a sales or
customer service environment. Co-source is used where a company wants to share best practice utilising in-house knowledge and outsource expertise. Some companies will use
co-source to provide a back-up or overflow service, which can be used in peak times or when staff are ill.
Co-source is now becoming popular and will continue to grow, as it satisfies the concern of losing control and solves the issue of scalability without incurring rising investment costs. Co-source is flexible, in that it can be used for small or large back up, in line with fluctuating needs. Companies are able to grow their company through this method, using in-house research and development and adding resources through the co-source partner.
In-source
In-source is defined as an outsource company providing a service in-house. An example of this is in the area of recruitment. A company with a contact centre where recruitment needs vary may have a preferred recruitment company that has a retained consultant on-site full--time. In a sales environment an outsourcer can provide a whole sales team including a manager, but the team will be based within the client’s
premises. In-source is a very good way to have on-site provision but within a set cost and at agreed service levels. The client can have the facility in place and have access to the service without issues regarding management resources and associated costs, and this arrangement also allows for scalability.
So which one is for you?
When choosing any of the four options, you need to be very clear why you are doing it. Each part has negatives and positives. Outsource is of great benefit for any type of business, but should never be entered into lightly. If an outsource relationship is to work well then initial investment in time and training is vital and an ongoing relationship, built on measurement and development. In-house always has a close management from the in-house management team, this always means you know what is happening, the
Prepared by KMB- About KMB
With KMB being a Multi-Channel Contact Centre, email, post, social media or telephony can be used to market your company, working alongside your sales and marketing strategy to achieve a genuine return on investment
With 23 years of experience to generate good quality customers for our clients, it is paramount to have well trained and enthusiastic Agents. All agents are trained and briefed prior to the commencement of a
campaign. Using contact centre technology, all calls are recorded and monitored to achieve the highest quality of results.
We have worked for a wide range of clients on a variety of successful marketing projects in the following sectors: Financial Services, Insurance, Education, Professional Services, Construction, Materials Handling, Manufacturing, Automotive, Fleet, Not for Profit, Training, IT, Telecoms, Environmental Services, Utilities, Leisure and Freight Forwarding.
KMB is a long standing member of the Direct Marketing Association (DMA) aligning closely to DMA core values and KMB Managing Director Jacqui Crawley sits on the DMA Contact Centre and Telemarketing Council and the DMA North Council.
Find out how we can help you with a customer satisfaction campaign by emailing us at [email protected] Visit our website at www.kmb.org.uk
And follow us on . . .
