Who are you guys?
Selecting Outsourcing Vendors
SPICE is the metholodology I have developed alongside some of the leading minds in the industry to strategise, procurement, implement, manage and improve outsourced operations. SPICE is an acronym for "S" - Strategy, "P" - Procurement "I" - Imlementation, "C" - Control & Innovate and "E" - Exit. It is the lifecycle for managing outsourcing contracts. .
I am the founder of call-centres.com with over 23 years of helping organisations to improve the quality of their outsourcing. I was the first person in The UK to gain a Masters Degree specialiaing in outsourcing. I am a published author, a regular speak on contact centres and contributor to publications around the world.
When it comes to choosing the ideal partner for your outsourced call centre, size is almost always important & the simple rule of thumb is 'Big enough to deliver but small enough to care'. The call centre outsourcing industry is a highly complex industry consisting of operators with global operations employing in excess of 100,000 people down to home and small office businesses employing less than 10. Whilst the size of the vendor is never going to be the biggest consideration in choosing a vendor, it is very helpful to consider it when making a short-list.
I am of the opinion that the concept of a global partner model (where a client chooses a global vendor to handle all interaction types in multiple geographies) is flawed in practice. There are some advantages (such as dealing with a common account management function & commonalities in technologies) but these are normally outweighed by choosing a 'best in breed' model where you choose each vendor based on the specifics of the work you are outsourcing. Each vendor has its 'sweet spot' in which they excel against their competition which may be onshore customer services, multi-lingual technical support or offshore telemarketing but in reality, a vendor regardless of size rarely has multiple sweet spots. It's also worth noting that global players rarely operate as a unified operation. They may have fairly consistent operational manuals and global technology platforms but the culture within each location is often very different. This is especially true when the vendor has grown through acquisitions. It's for these reasons that you should consider each outsourcing assignment as an individual assignment and when you are considering size, you should consider the local size of that operation as opposed to the total size of global operations.
There are a number of theories relating to the size of the project you are outsourcing compared to the size of the company best fitted to deliver this work. For example, when dealing with a vendor who are only present in one country, there is a widely credited theory that your work should be between 5% and 30% of the total capacity of the outsourced vendor. Whilst this is a highly simplistic way of looking at it, it can serve as a basis for comparison. Another theory is that your work should be among the 10% of the largest clients a vendor has. Likewise, this theory also has merit. Vendors, both large and small, will always give preference to those clients which pay them the most money. However, when it comes to finding the right size of client, it's often the size of the existing clients of that vendor which is more important than the size of your work. A few years ago, I assisted a medium-sized travel company in finding a new vendor for customer support in The Philippines. The client had chosen a specific vendor 3 years before mainly on the back of the fact that they serviced one of the world's largest travel companies but as they told me 'The call centre was only interested in the larger company'. This story isn't unique but it does show how it is generally not a good idea to choose a vendor who are over-dependent on 1 huge client.
Another size-related factor to consider is the rate of growth of outsourced vendors. If a company has stayed at a fairly consistent size for a long period, this is likely to indicate that the call centre is failing to grow its clients. Also, companies which are growing too fast may be experiencing 'growing pains'. During the excessive growth phase in India & The Philippines, many vendors were more than doubling in size every year. This led to a number of issues such as a lack of suitable team managers and a very large number of new agents. Of course, very fast growth within a vendor can be a very strong indicator that the call centre is performing well. Likewise, many small owner-operated UK vendors who aren't growing rapidly may be deliberately controlling growth to control quality.
It's also to important to recognise the way in which a vendor manages your size of account. For example, if you are looking to outsource a small piece of telemarketing work, you may think that your work may get lost within a large vendor. However, some larger vendors will have special sectors of their operation designed specifically for small or niche projects and even incubation style operations which test the viability of a project is a controlled environment before expanding out.
It's also worth noting that there is no shortage of outsourcing vendor so when considering the most suitable vendor, find the vendor which fits your needs rather than thinking you can mould the vendor to your needs. With this in mind, when considering the size of a vendor, you should remember these following rules:
- Unless there is a clear business imperative to do so, avoid the 'mega-players' in the industry. You will generally receive far better value and more attention from smaller vendors.
- Always consider what each vendor would think about your project. Is it of a size (or potential size) which would motivate them?
- Does the vendor have sufficient capacity to deliver? You should consider the vendor's current capacity as opposed to their potential for expansion. There is always a risk in considering a site which has not been operational. However, you should consider the potential size for your project. There is little point in outsourcing to a vendor without the capacity to grow as the work grows.
- Never outsource to a vendor where 1 client is more than 30% of their total revenue or 2 clients constitute more than 50% of their revenue.
- It's always preferable to use vendors whose existing client base is similar in size to your project
- For outbound projects, don't be afraid of using multiple, smaller vendors as opposed to 1 larger vendor. Lower costs and higher performance will offset any additional management requirements. The same is not necessarily as true with inbound projects.
In conclusion, always remember that size is not the most important factor but it is a consideration which can help in the short-list process.