Outsourcing 101: In-House vs Outsourcing and Cost Concerns

Sean Neighbors, TaskUs SVP of Global Product Offerings, talks about the most difficult topics surrounding outsourcing customer service.

Published on October 31, 2022
Last Updated on October 31, 2022

With volatility, uncertainty, and nuances of the current global economy, organizations are focusing on cost rather than growth— further challenging the outsourcing of customer services with misunderstandings, misconceptions, and prejudices about what they can offer businesses.

To tackle these issues and biases head on, TaskUs launches Inside Out, an online series where leaders dive head first and talk about the ins and outs of outsourcing and customer experience management. Spearheaded by TaskUs Experts, Inside Out will enable companies to make intelligent decisions on optimizing their business, minimizing costs, maximizing revenue, and of course, enhancing the experience of the customer, regardless of industry.

The series is an opportunity for companies to learn what BPO customer service can do for their businesses despite the challenges of the economy. In the first episode, Sean Neighbors, Senior Vice President of Global Product Offerings of TaskUs, answers some of the toughest questions and concerns surrounding outsourcing—its challenges, benefits, and strategies. “We're going to bring together people in and outside the company to share the true meaning of outsourcing and how to make decisions about it.” 

In-house vs. Outsourcing

“Why even outsource?” When it comes to customer experience management, one of the biggest questions companies ask is whether to keep CX in-house or to outsource it. The top concern around outsourcing is ownership—keeping their branding, knowledge, and business close to who they are. 

Sean acknowledges the difficulties of planning outsourcing customer service and the unfamiliarity that intimidates companies that are not as familiar with it. There is a lot to be tackled, from understanding the financial components to identifying the metrics, expectations, and the collaboration process to achieve digital CX satisfaction. "We're here to help people understand all those items and make them feel comfortable about outsourcing customer service," he said. "You can do it better, cheaper, and more effective in an outsourced environment."

He added that the series would tackle in-depth the topic of choosing the best BPO customer service partner you can be comfortable with. "We're going to have a whole section on how do you screen, identify what the job is, match those skills directly with the outsourced environment, choose a location, choose the cost component that fits what you're looking for, and then build the training to make sure that the output is there."

In addition to focusing on what outsourcing customer service can offer, Inside Out will also cover everything related to outsourcing, such as workforce management, finance, contract management, and other areas. 

Overcoming Prejudice in Outsourcing

A lot of prejudice against outsourcing customer service stems from disappointing experiences from previous BPO customer service providers, putting companies back in the dilemma of whether to operate in-house or outsource.

Over the years, Sean has encountered clients who had gone through the same experience and refused to work with a similar outsourcing team. To help clients understand what went wrong, he explained the various factors to consider before outsourcing customer service. “I always say, the way you should do in an outsourcing environment, your quality of customer service, and the metrics that you have should be higher than you're able to deliver today. If you're not getting that, you should go to a different vendor,” he advised. 

“Go to somebody that you can feel, trust, and walk hand-in-hand with the things you've learned and the things that you don't like from the previous vendor and understand, what does the new vendor do? How do they do it differently? Why would I trust them over the previous one? Why would I make this decision to be connected? They're part of you.”

Establishing trust requires proper alignment in hiring, training, policy development, and other business areas. When you succeed in doing this, you will achieve positive results, effective collaboration, and favorable relationships with your partner. 

What happens to the in-house teams?

What happens to the in-house teams when a company finally decides to outsource? Sean answered, “It's typically not an all-or-nothing thing. It is building that relationship, building the fundamentals, and utilizing the outsourcer to understand how well or not you're doing it in-house. With that understanding, then you can make decisions.” He added, “If you're growing and scaling as a company, you can transition your in-house people to a higher level of work, a more Tier-2 sort of work.” He said that by doing so, you would nurture more experts within your organization to become leaders.

Scaling with an outsourcing customer service company will help you focus on your internal structure, processes, and goals. According to Deloitte’s Global Outsourcing Survey, 65% of companies surveyed said outsourcing aided in focusing on their core functions.1 You should be reducing your workload and letting BPO customer service take care and grow your customer service management while you continue working on strategic activities. 

“But, it is a progression. It is not a, ‘as soon as I do this, this all changes.’ Or it shouldn't be, because if you do that, you've lost a lot of that knowledge. Take time. Walk through this,” he advised.  

Dealing with cost-reduction concerns

Cost is crucial in deciding whether to outsource customer service. Especially with the threat to the global economy, cost reduction has become a priority.2 With that in mind, clients need to be as open and honest with the outsourcer as possible and bring cost-cutting upfront if that is what the business is looking for. “ The outsourcer should always offer new ideas and suggestions on how to bring down your cost.” Sean said. 

But is focusing on cost reduction the only solution? What does it compromise?

“There are many things that factor into the overall cost. You have a per-work model, a per-hour model, and a per-task model. You have multiple factors that drive that cost. But more than anything else, it's about the people sitting in the chair doing the work.”

“If you care about the people, put those people first, and put them in a people-first environment, you'll be able to drive the process, technology, and other things that drive your overall cost down. If you only care about the cost, you're not caring about the things and the factors that build into that cost.” 

Oftentimes, an improved customer experience takes priority over cost reduction. BPO customer service companies can provide something that aligns with your cost and performance goals.

Ins and outs of outsourcing with Us

It’s natural for businesses to be skeptical of outsourcing. Change isn’t easy and one must consider numerous factors before pressing the button. Finding the right partner may not always entail working with Us. Nonetheless, we will always assist you in determining what you truly require to know which partner suits you best. Want to know more? Inside Out will soon cover other areas of outsourcing that will surely benefit your business. Watch out for our next episode!

  • 1^Outsourcing and Shared Services 2019-2023
  • 2^2020 Enterprise transformation and cost reduction survey
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