The ins and outs of outsourcing | Business Reporter

8 July 2012 ? By Gemma Stroud

Should you keep your business in-house or use external contractors? We look at the pros and cons of outsourcing through two companies with very different approaches

Don?t kid yourself?that outsourcing is yesterday?s news ? participants in Inner Circle?s Customer Experience Strategy Summit made it quite clear that it is still a knotty question they grapple with.

Some businesses have tried outsourcing aspects of customer service but decided it is far too important to run at arm?s length. Others, including National Rail Enquiries, have built a hugely successful customer service business on the back of external suppliers providing everything from the technology powering the website to contact centres.

?Some people say you can?t be successful and have a strong brand identity if you outsource, but we disagree,? says National Rail Enquiries CEO Chris Scoggins.

The business provides more than 400 services to around 100 third-party clients; the company?s impressive credentials include being the most-called telephone number in the UK and the number one travel and transport website. And Scoggins says a large part of the business?s success has been as a result of its extensive outsourcing strategy.

?Outsourcing gives us cost-effective access to the best resources and thus enables us to provide our customers with the best possible service,? he says. ?We maintain our reputation as an excellent service provider by reaping the benefits of expertise available outside the business.?

It seems to work for National Rail Enquiries, which goes from strength to strength. In the last financial year, the company saw 25 per cent growth and hit 8 million users online.

However, there are potential pitfalls with outsourcing. Any project can go awry if not monitored correctly and Scoggins says businesses should be aware of this when using external contractors.

?It?s important for us that customers experience consistency across the board. Problems arise if you outsource a project and forget about it. You won?t receive quality results unless you keep tabs on it every step of the way.?

Scoggins insists that despite the business?s use of outsourcing to deliver much of the business, customer satisfaction hasn?t been compromised.

?Customer experience remains our priority and suppliers are approached as if they were any other member of the National Rail Enquiries team,? he says. ?We are always very involved with the process from end to end,? he adds.

The Compass Group has taken a very different approach. A market leader in the catering sector, the business produces four billion meals a year to over 40,000 chains and has an employee base of 388,000. According to customer experience strategy leader Claire Muscutt, keeping everything in-house has not only built an exceptional brand reputation but also developed a strong brand ethos.

Muscutt: delivering a unified message

?Keeping everything in-house has ensured that the company vision is a red thread that runs through every aspect of the business,? she says.

?We?re delivering the same message across the board to all our staff. And that?s not been lost in translation with outsourcers who don?t understand our aims and objectives.?

In recent years, the company has focused extensively on staff training by increasing apprenticeships and offering management courses. Muscutt has also headed a developed customer-experience strategy provided for all Compass employees.

She adds: ?If your employees don?t understand the challenges of the business they are not going to be able to help initiate change or deliver adequate service to clients. And in increasing training opportunities, it creates more engagement and communication between management and staff and makes employees feel valued.?

And the results have been positive. In 2011, Compass Group saw a 45 per cent increase in Net Promoter Score and 60 per cent decrease in labour turnover. Sales have also risen by four per cent, which on one national contract amounted to an increase in revenue of nearly ?2m.

?The right training at the right time is a targeted company investment,? adds Muscutt. ?Compass provides a myriad of service expectations to clients and customers alike ? staff training and development means we meet these complex needs accordingly.?

But for Chris Scoggins, outsourcing provides business with more flexibility and efficiency.

?Staff training can be costly and time consuming. We develop new technology very quickly as there are experts on hand to get the ball rolling immediately. It allows us to have a multi-service approach and avoid putting all the responsibility in one team or one supplier.?

National Rail Enquiries now outsources the majority of its business to agencies all over the world.

And Scoggins says that rather than compromise on quality, the service is improving.

He adds: ?Some of our customer-experience centres overseas have outperformed their UK counter parts. Customers are happier with the service now than they were before ? and that?s the most important thing for us.?

Which, of course, is the key to any decision to outsource customer service operations ? are you still in touch with your customers?

Source: http://business-reporter.co.uk/2012/07/the-ins-and-outs-of-outsourcing/

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