In all areas of business there is a periodic question: should we consolidate our supply chain or should we consciously seek to diversify?
At Contact Centre Panel, we have heard that question being asked with increasing frequency over the past few months, by clients using customer management outsourced service providers (OSPs), which deliver contact centre services. All business operating models have been tested and altered since the start of the Covid–19 epidemic. Customer management and contact centre frameworks and approaches are no exception and the question of whether to consolidate or diversify suppliers is frequently addressed.
The argument for rationalisation – it’s obvious, isn’t it?
If an organisation is utilising more than one OSP to deliver or support its customer management efforts, then that alone might provide an obvious and compelling argument for consolidating this provision.
1. Leverage scale and cost consolidation
As any procurement professional will tell you, consolidating work currently divided across a number of suppliers offers an immediate opportunity for cost savings. These can be both:
- Direct – any OSP will be able to achieve and share economies of scale cost benefits with a client that provides them with more work
- Indirect – there will also almost certainly be indirect benefits available as duplication of effort and/or customer contact and journeys, unnecessary hand-offs and service discontinuity can be reduced through smart supplier rationalisation. Depending on the organisations approach to and resourcing of supplier management there may be considerable savings to be had from only requiring to manage one supplier. In addition, the client’s ‘share of voice’ and influence over a single supplier will be increased
2. Enable partnerships
If an organisation wants true partnerships with its OSP suppliers, it will find it easier if there is just one. Partnerships are always underpinned by relationships and cultural alignment and – if the client chooses carefully – these can be best identified and achieved in an exclusive supplier. In any event, using one customer management supplier will make it easier for clients to enter into an ‘outcome based’ or ‘vested outsourcing’ relationship. When a supplier has intimate knowledge of its client, its processes and customer base it can establish the confidence to contract on the basis of outcomes and outputs, not costs and inputs.
3. Consistency and the elusive ‘Single Pane of Glass’
Most customer experience and customer management professionals regard consistency of experience as a fundamental building block and measure of customer management effectiveness. Consistency is, of course, much easier to achieve when one supplier handles all of your customers’ interactions.
All organisations seek the elusive ‘single pane of glass’ – the ability to anticipate, observe and understand customer contact needs and experiences. To do so is typically reliant on the development of a sophisticated, integrated but flexible ‘tech stack’ of contact channels, tools and data repositories and flows. Unless an organisation has its optimal tech stack already built, ready to deploy and encompassing all customer channels and interaction modes, the challenge will be made just harder if it uses multiple customer management OSPs.
4. Exploit internal change
The legacy use of multiple customer management providers is typically an indirect function of two features of clients’ business:
- Internal divisions and silos within the client organisation which demand or tend towards requiring separate providers for separate sets of activities or segments of the total customer overall base. With separate business units or cost centres, it is natural for decision making about the use of customer management OSPs to be localised to the business unit level.
- Technology or proposition differences which historically made it impractical or impossible for one supplier to meet all the client customer management needs.
Organisational, product and proposition or technology change may make these historical decisions redundant or outmoded. The rate of business change has rocketed since the start of 2020 – correctly exploited by the business owners of customer management and customer experience, these changes can help underpin the business case for supplier rationalisation.
The argument for diversity
So, the rationale for rationalising customer management OSPs and consolidating service provision might appear to be clear and overwhelming. However, this is not always the case.
1. Flexibility and business continuity
In the broadest sense, Covid has underlined the need for all businesses – and all their critical functions – to be resilient in the face of challenges and interruptions. As a result of recent experiences, often – but not exclusively – to do with the relative ability of OSPs to deliver rapid, effective and secure home working, a number of Contact Centre Panel clients are actively seeking to expand their portfolio of OSPs in order to provide greater resilience and flexibility. This is a recognisable trend, especially amongst larger clients using global networks of OSPs and customer management providers.
2. Innovation and competition
One of the reasons to outsource customer management is to leverage and benefit from both deep functional expertise (the OSPs should be the experts) and a dedication to interacting with customers. Along with this expertise and the insight that a ‘fresh pair of eyes’ brings to any situation, newly outsourcing an activity or contracting with a new supplier can create innovation. Contact Centre Panel will always encourage clients and OSP suppliers to explore new and innovative solutions, not just outsource or change supplier for the same old approaches and techniques. Ongoing, sustained creativity and innovation is hard to achieve, but is more likely in an environment of supplier diversity and competition.
In addition, managed competition between OSPs can allow real-world benchmarking of costs, resourcing, performance metrics and customer outcomes.
3. Horses for courses
There are over 140 outsourced customer management providers in Contact Centre Panel’s network. They cover the widest possible variety of locations, scales and areas of specialism – from generalists to centres with very narrow, specific areas of expertise. For some organisations, the performance, experience and expertise of a niche provider will always place them ahead of a generalist OSP, which can turn its hand to any customer experience activity across a client’s whole customer base. The challenge of managing multiple providers, avoiding customer experience friction and disconnects, is unavoidable, but for many clients, it’s a price worth paying.
Conclusion: which way to go?
Each client’s motivation for using OSPs to provide customer management services will vary. Their business and customer experience goals, history, internal structures and culture will all have a part to play. In times of challenge and change all these factors are subject to review and alteration – and that includes whether to adopt a consolidated or diversified OSP supplier approach.
Contact Centre Panel gives clients the opportunity to review their existing OSP contracts, determine if they are best fit and secure the right approach for the on-going success of the brands customer interaction management.
Proposition Development & Compliance
Contact Centre Panel