Savings from offshore call centres fall in three years

The cost benefits of offshoring call centres fall away over three years, compared with staying onshore and running improvement programmes, analysts have found.

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The cost benefits of offshoring call centres fall away over three years, compared with staying onshore and running improvement programmes, analysts have found.

A study of over 50 call centres by Compass Management Consulting found that the cost benefits of offshoring decreased substantially over a three-year period, relative to an onshore environment where an improvement initiative was implemented.

Analysis of onshore and offshore environments revealed that increases of up to 15% a year in staff costs in countries such as India were reducing the price advantages of offshore call centres.

Simon Scarrott, head of business development and marketing at Compass, said: “It is not enough to simply offload problem operations and inefficient processes to other countries in the hope they will improve. The key issue is to what extent savings are real, sustainable and continue to enhance the consumer experience.”

He added: “In too many cases, service quality is being compromised by an offshoring decision that fails to deliver the level of savings anticipated.”

The research found that language difficulties could also lower productivity, with calls to offshore contact centres lasting up twice as to UK-based operations. Failures in listening or understanding customers affected 18% of calls to offshore centres, compared with 4% of calls to onshore facilities.

Each of these communication breakdowns could increase call duration by between 39% and 105%, Compass found.

The management consultancy urged businesses not to ask: “Which country is right for our call centre?” Instead, companies should investigate three key questions, Compass urged.

  • What is right about our call centre and what needs fixing?
  • How do we compare to the best call centre operations in our industry?
  • What can we learn about call centre efficiency from other sectors?

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