Outsourcing Your CXM Operations for the First Time – Here Are 10 Things to Consider | Blog

Over 70% of all Customer Experience Management (CXM) services are delivered by in-house teams, making this a huge potential market ripe for outsourcing. With our estimates pegging the global market at $325 to $350 billion a year, less than 30% ($89-$91 billion) is currently outsourced. Outsourcing can deliver numerous benefits for enterprises. But before jumping in, there are many planning, strategic, and tactical considerations to understand and address. To learn more, read on.   

Driven by COVID-19, outsourcing of CXM grew last year after a long period of remaining stable at about a 25% share of the market as the pandemic disruption led many enterprises to seek additional support to continue servicing their customers when their teams were unavailable or to respond to increased demand.

Another contributing factor to the growth was increased government spending on COVID-19 related services such as tracking and tracing vaccination programs, which were predominantly outsourced operations. Our blog CXM Market’s Dream Run – What’s Driving It And Will It Last? explores this in more detail.

We predict the outsourcing trend will continue to grow as enterprises realize that outsourcing of CXM can deliver the same positive results as in-house teams – helping to remove cost from the business and simply allowing them to focus on their core business by having a third party manage the complexities of large customer-facing operations.

If you are a new or less experienced customer of these services, many factors must be considered to ensure the transition to an outsourced environment goes as smoothly as possible. Here are 10 critical elements to think about:

Business requirements
  • Understand what you need a service provider to deliver. Be clear on your business requirements and required Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) at the outset of any discussion
Documented processes
  • Document processes that a service provider can follow and use to train agents
    • If you don’t have your processes documented, be clear with service providers that this is the case and you may either need to build this in parallel to running the Request for Proposals (RFPs) or ask the service provider to build them before go-live
Sourcing strategy
  • Develop a strategy that specifies where you want support to be delivered from (onshore, nearshore, offshore or no preference) and determine if you are going to go with a sole supplier or multi-supplier strategy. This will be key before starting any procurement process as it will influence service provider selection
Technology strategy
  • Understand the digital transformation strategy for the business to ensure the service provider can support the changes required
  • Develop a clear technology strategy for the “run” business – are you going to dictate what technology is used for activities such as CRM or are you happy to leverage a supplier’s offerings?
    • This may be further complicated if you want to have multiple suppliers within your ecosystem as you need to be clear on where ownership of each technology will lie
Understand the supplier landscape
  • Understand the supplier landscape and the strengths and weaknesses of all the possible suppliers, including their footprint as well as their investments in technology and agent engagement. If you have unique or niche needs, are there suppliers in the market that can meet your requirements?

 

Understand the difference between procurement of goods versus services
  • Realize that the procurement of services is very different from the procurement of goods. While internal procurement teams are very effective at buying products, they may be less used to procuring services of this type and require additional support
Clear baseline of cost and performance
  • Understand the starting position in terms of cost and performance to baseline the value that is delivered through outsourcing as part of the business case
Business continuity planning
  • Factor in the use of service providers to existing business continuity plans for the current operation and plan for any potential impact or changes required
Stakeholder alignment
  • Align key business stakeholders with the use of outsourced service providers to ensure their support throughout the journey. Surprised stakeholders are much harder to placate than those that have been involved in the process from the start
Future expansion plans
  • Understand the expansion (or contraction) plans of the business to ensure any service provider selected can support future as well as current demand

While outsourcing can achieve many transformational business outcomes, know it is not a fit for every organization or in every context. Taking these right first steps and addressing the key issues above, will help set the foundation for a successful solution and prevent potential problems from transpiring at a later date.

To discuss embarking on outsourcing, please contact Sharang Sharma, Practice Director, [email protected]; David Rickard, Vice President, [email protected];  or Shirley Hung, Vice President: [email protected].

Learn how Everest Group helps CX managers deliver greater business value through CXM strategy optimization here.

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