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National BPO&O: Outsourcing, Co-Sourcing, Insourcing

Offshoring, Onshoring and Business Process Outsourcing Report

National BPO&O: Outsourcing, Co-Sourcing, Insourcing

Last month, we took at look at some of the broad strokes that emerged from the Offshoring, Nearshoring, Onshoring chapter. Taking into account that this is part of the full 2015/16 Knowledge Executive Business & Markets Insights Report, available to order here, we turn our focus onto Outsourcing, Co-Sourcing and Insourcing for this blog post.

Our surveys indicated that the industry is generally in good shape, with revenues growing, but at the same time profit margins are under challenge. The outbound space presents many opportunities, but the pressure on commercial models and regulation governing the various industries that contact centres are operating in is somewhat restrictive. The inbound opportunities exist on a smaller scale.

The debate

When deciding on the appropriate course of action with regards insourcing versus outsourcing or co-sourcing, most of those interviewed agreed that it depends on what the client’s customers want. In a customer-centric world, an accurate analysis of this is the determinant.

Some outsource service providers in the industry believe that it is time to evaluate the entire proposition, since it is no longer about lowering costs and increasing efficiencies but about delivering an excellent customer experience. Accreditation, quality and legislation compliance are paramount.

With regards a co-sourcing model, most agree it has merits but faces short-term challenges that, if properly managed, can result in long-term value. In some cases, the need to manage risk more closely, such as in the banking sector, insourcing is the preferred model.

Based on the research, the Knowledge Executive team predicts that more organisations will tend towards co-sourced or hybrid outsourcing solutions with a focus on creating strategies that result in marketplace differentiation and competitive advantage.

Tomorrow’s contact centres

Our respondents agree that there is a definite need to develop technologies and applications to ensure that self-service and social media channels are well served. The various aspects and implications of this are explored in the chapter. Ultimately, Knowledge Executive believes that determining the best approach to customer service requires an interrogation of the tools they are currently exposed to – some of them may be falling short of what the modern customer expects.

The research makes it clear that the industry is becoming increasingly sophisticated and complex, and this trend will continue. As far as optimising is concerned, there doesn’t appear to be a ‘one size fits all’ model, provided it places the customer at the centre of its strategy. With this in mind, our next blog post will focus on Customer Centric Marketing highlights.

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