Outsourcing, Offshoring and Insourcing

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Many of the topics covered by this blog have experienced an avalanche of attention due the central focus of the U.S. presidential campaign. As a result, I thought I’d use this space to clear up some of the common misconceptions around the terms being bandied about on the campaign trail and in political attack ads.

In a recent campaign stump speech, President Obama blasted Mitt Romney for his campaign’s assertion that there is a difference between outsourcing and offshoring. I’m sorry to say it, but President Obama was misguided in his claim that the terms are synonymous.

Outsourcing vs. Offshoring

Outsourcing is defined as the practice of subcontracting goods or services to a third party. By definition, Outsourcing is an arrangement in which one company provides business services for another company that would otherwise be handled internally. While the terms are often used synonymously in the public lexicon, they are in fact very different. For example, a firm hiring a commercial cleaning company to provide janitorial services is essentially outsourcing their cleaning duties.

Offshoring generally refers to the practice of hiring a company in another country to perform such duties, although it can also describe a firm’s establishment of a wholly owned subsidiary overseas to carry out business functions. Businesses in “First World” countries often engage in offshore outsourcing to save money and improve efficiency.

What is Insourcing?

This is where it gets confusing. Insourcing is defined as the practice of farming out work to a business unit under the same ownership. Using this definition, a firm setting up a plant or manufacturing facility in China would be insourcing. To be fair, this is not how the term is commonly used. When President Obama refers to “insourcing”, he is describing the practice of bringing jobs previously outsourced to offshore providers back to the U.S.

Make sense?

Efficiently Blending Call Center Services

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Blended Contact Center ServicesThere is an ongoing debate among corporate and call center executives regarding the efficacy of multichannel contact centers. Most seem to believe that blended contact center utilization allows firms to efficiently and seamlessly boost inbound and outbound functionality while cutting costs and increasing flexibility.

Considering the swift escalation of email correspondence and other methods of online centered customer contact, the public may quickly change the way in which call center outsourcing is viewed. For instance, what was once termed “multi-channel contact center” might in the near future become redundantly known as “call center”. The range of standard contact centers that deliver uniquely inbound or outbound service is shrinking. Supplying customer service across a number of interaction channels, also recognized as multichannel contact center outsourcing, is commonplace currently for contact center service campaigns.

Unfortunately, it doesn’t always work. Quite often, dialer and ACD software isn’t always suitable, as reporting and dial-in and dial-out lines are typically separated. The use of multiple lines can be expensive and defeat the often well-intentioned attempts at blending call center functionality. Added lines can be expensive on their own merit, and combining them can cost firms time in terms of reporting drudge-work.

Most small to mid-sized call center customers expect more than just one particular service from offshore providers. Companies also expect to see economies of scale when purchasing both inbound and outbound services. Entrepreneurs wish to broaden these services spanning several channels, including the world wide web, email correspondence, virtual chat, and other self-help offerings. Firms that outsource contact center services notice that self-working assistance for simple communication extend commercially beneficial solutions to entirely assisted telephone based customer service. Recent transformations in customer behavior demands that call center outsourcers evolve personal support channels well beyond soon-to-be antiquated phone support.

Time is money. Customers have endured taxing and time consuming customer service nightmares, and to avoid repeat performances, more likely to email or make use of social media to obtain help with a dilemma. Call centers must have the necessary reporting and tools to allow ACD use across multiple lines and channels. Doing so will allow companies to centralize decision making and improve customer service. To reach your multichannel objectives, call centers must effectively combine channels in such a way that saves your business time, while still making your customers happy.

Though interactive voice response (IVR) continues to be a core element of essentially all contact center companies, its use is slowly, but proportionately dropping as various other kinds of customer service come to be available.

The heart of the matter is that not every company requires identical features and services from call centers. Businesses with substantial size and low sales per customer may possibly prefer more self service, while companies with more expensive merchandise or service could possibly choose to invest in highly involved assistance. Typically, the businesses that are anxious to spend in current technology are the ones with the greatest volume of call center traffic. In the event that a brand new function runs properly for them, they can possibly preserve a huge deal of cash in the contact center. The trick is to find a company that can affordably offer the proper blend of services, reporting, and tools for the right price.

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