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How Offshore Outsourcing Affects Customer Satisfaction

Posted by: | Posted on: August 7th, 2014

Many people perceive that offshore outsourcing is not dependable, and at times requires more monitoring for being in control of situations and avoid challenges that one would have originally faced in case of in-house customer services.

Offshore Outsourcing Affects Customer Satisfaction

Evolving Outsourcing Trends and The Resulting Effects on Business Growth

But things are changing for the better. With the advances in technology call center services are becoming more unswerving and are a lucrative practice than ever. When you save money on production, you can share the savings at the customer level. On top of it; you can also save a company that is in distress so that they can stay afloat. It is perceived that if a company outsources its work to an offshore company the customer satisfaction level goes down due to communication gap, lack of understanding about the company products or services.

However, this is true only when the service provider does not care to take measures to ensure they have a thorough understanding of the said services. When you opt for offshore outsourcing, it is important to get all the information about the company you are outsourcing to this will help in enhancing customer satisfaction. One of the most important benefit and the reason why businesses are attracted towards offshore outsourcing is that it is cost effective; the money saved by outsourcing can be invested back into your business, thus ensuring business growth.

Outsourcing Services – The Flip Side

However, the pastures were not always so green. There was a wide spread skepticism initially and companies avoided outsourcing. Gradually the landscapes changed, and there were some bold businessmen who made the first move. As outsourcing became popular, now the focus is no more on availing cost effective services, clients are looking for more. They want end to end quality services at effective costs.

There are two sides of every coin. There are some who are in favor of outsourcing while others have a negative frame of mind for it. Now it depends on the company whether they have the willingness to provide customer support and satisfaction. Good business practice and honesty are two key aspects which go a long way in signifying offshoring is done for the right reasons. There is lots of bad blood about outsourcing of customer service to offshore providers in U.S. press. But despite this offshoring continues to expand mainly due to lower labor costs overseas.

The other significant question that comes in mind is, that are the companies which outsource services to an offshore vendor committing a folly?. The answer to this question is very difficult without comprehending offshoring’s actual impact on customer satisfaction. Recently a survey was conducted, to meter and analyze the outsourcing and off shoring activities of around 150 North American businesses that mushroomed between the years 1998 to 2006. Not so surprisingly, it was found that there was a drop in the customer satisfaction score (as per ASIC American Consumer Satisfaction Index measured and tracked by National Quality Research Center at the University of Michigan) of the companies who had outsourced customer service solutions to an offshore/onshore company.

Mitigating Risks and Delivering Customer Satisfaction

Now this drop in customer satisfaction is associated with the drop of approx 1% to 5% in the market capitalization of a company. Now, that’s not a price that companies would like to pay for the meager benefits of availing low cost services. So now, the challenge that an outsourcing companies faces is that how to mitigate these risks and deliver a service that is palatable to customers. Besides, companies should also keep in mind, that they consider all aspects of off shoring, and instead of opting for vendors who promise dirt cheap rates, they should look for a complete solution where in addition to low cost the vendor also has a good infra, best resources, experienced employees, and the necessary certifications. Here due-diligence prior to choosing an outsourcing service partner is the key.

Recycling The Money Saved via Outsourcing

Efficiency in customer service can be achieved by using technological innovations and advances to your benefit and hence make offshoring and outsourcing a valuable proposition. Often overseas service providers, house the best technologies that are capable of doing the said task in record time and with the highest accuracy. Often it happens so, that an onshore service provider cannot match up to these competencies of an overseas/offshore vendor. An effective way to mitigate the damages of outsourcing to the wrong service provider is to invest the money the company saves to enhance the quality of the company’s products or services, or to cut prices, rather than register the saved money as profit earned. According to offshore outsourcing statistics, this is not happening in most cases.

If a company can save more by sending customer service overseas it will have more opportunity to devote at least some of that money to develop its business. On top of it irrespective of whether you are considering to offshore customer service or not, you should deliberate whether back-office functions encompassing information technology may be suitable for offshoring.

Chirag Shivalker
About the Author: Chirag Shivalker heads the Content team at Hi-Tech iSolutions LLP. He has a long history in the BPM space and covers wide range of topics on BPM, Enterprise 2.0 and technology trends in business. He also enjoys writing about how active leadership and development plans can pave path for a process aware organizational culture that helps successful and sustainable process – based management.

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