Automate the costs away?

The outsourcing industry continues to grow in the UK as more companies look to reap the benefits that outsourcer's offer: reduced cost, increased flexibility, agility, access to new locations and access to industry best-practice to name a few. Technologies like automation and artificial intelligence are fuelling change through the industry at a time when the customer journey is becoming more digital.

As an advocate for outsourcing this is good news for the industry but there is a growing trend of commitments to reduce costs through these enabling technologies at levels not seen before, and certainly not delivered as a common practice. There are exceptions of course but we should be working together with clients to prevent the ‘why’ of outsourcing to solely focus on delivering efficiencies.

With the cost to serve creeping up your typical P&L sheet it can appear to be an obvious place to attack when the purse strings need to be tightened. However, this can lead to really bad outcomes for customers and the financial health of the company looking for outsourcers to plug the gap if that is the only focus of the company and certainly if they have lost sight of the broader benefits to outsourcing.

It’s not hard to see why this might happen, certainly as the traditional brick and mortar estates have shrunk and customer experience expectations have grown organisations are now spending a higher proportion of their cost base serving customer contacts.

Transformational commitments, innovation and continuous improvements are an essential part of outsourcing and with the right insights, actionable data and an ability to bring change, outsourcer's can realise significant financial benefit. So what’s the problem?

Suppliers need access to do their own due diligence but there is also a need for due diligence on the supplier and how they will actually deliver efficiencies.

As the industry becomes more and more competitive and as customer experience estates become more mature it is dangerous to over-estimate the amount of transformation that will be realised within the timeframes set out. If through the myriad of change that exists within the complex customer experience environment, the outsourcer is unable to deliver to the extent it expected, someone is going to suffer.

It could be the outsourcer who has to take the financial hit to bridge the delta or it could be the company who is now in contract dispute with the outsourcer – Either way the customer will suffer as both parties are distracted away from the critical task of serving customers!

As I’ve already said there are significant financial benefits to outsourcing and transformational efficiencies should certainly be on the list of why you would want to outsource but to avoid these risks, let’s make sure it isn’t the only reason on the list. Bilateral due diligence is the answer!