Study: Offshore call center savings fall in three years

Anlysts find cost benefits of offshoring call centers fall away over three years

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

A study of over 50 call centers 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 percent a year in staff costs in countries such as India were reducing the price advantages of offshore call centers.

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 centers lasting up twice as to UK-based operations. Failures in listening or understanding customers affected 18 percent of calls to offshore centers, compared with 4 percent of calls to onshore facilities.

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

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

-- What is right about our call center and what needs fixing?

-- How do we compare to the best call center operations in our industry?

-- What can we learn about call center efficiency from other sectors?

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