A Word To The Wise: Talk Isn’t Cheap!


When you plan to outsource your services, you must balance many competing needs. You need the best services at the best prices, and vendors need the best profits for their investors. You can leverage the lower cost of an offshore or offsite location to add staff and improve service levels, but you don’t want to load your outsourcing service with unnecessary inefficiencies. Somewhere in this cloud of wants and needs, there is one more item that you should consider. Do you want your users to speak directly with the offshore staff, or do you want to have them speak to intermediaries? How you answer this question will impact the cost of your service, and how it functions. Surprisingly, this question is often not asked until after the price for services has been negotiated. When this question is not asked, performance problems often result, leading to redesign or repricing of the services. Let’s take a closer look at two different communication models to see how it affects the overall service model.

The core communication issue is if your users will communicate directly to production staff or if they will communicate through a small group of dedicated staff that may or may not actually produce the work product. This question is not limited to services that have been outsourced. When any service is created you need to consider this question. High volume, same day turn around services… document centers, library research, transcription, PC helpdesk, and call centers…  need a structured communication framework to ensue that there is little variation between work products, even if different people perform your work. Also, when work turns around in just a few hours, clients are often anxious about missing deadlines and want frequent updates on the status of their work. It makes sense for these communications to go through an intermediary with superior communication skills. Fewer points of communication also makes it easier to standardize communications. However, your users prefer direct communication with the person working on their project. Your customers know that when more people are involved in communication, it takes more time to answer a simple question; and more people in the communication process leads to more opportunities for a mistake or miscommunication. You could still have direct communication and high quality communication, but it requires more training for more users and hiring more expensive and harder to locate staff. If your entire service is just a handful of staff, it may be effective to have direct communicators. When the staff is much larger, it not only becomes more expensive to hire and train for all skills, it can be very difficult to find new recruits with all the necessary skills (especially if there is a ceiling on compensation).

The model that is best for you will depend on the culture of your firm, and your industry.  Law firms are typically based on a secretarial model. Lawyers speak directly with secretaries. Each lawyer may see this as centralized communication since each lawyer communicates with just one or two secretaries. In fact, it is a decentralized model since every secretary deals with a different lawyer, who may want similar projects performed to very different standards. Many failed outsourcing plans changed their service from a decentralized to a centralized model, without allowing for this shift is communication. In Investment Banks, services already made the transition to dedicated centers with a centralized model. Still, users might welcome a more direct communications model. For some services, this could be a key improvement in services… if it is carefully thought out and carefully implemented. Neither model is better. Your current communications model is usually just a reflection of the available resources, management and budget when your service was created. Outsourcing provides an opportunity to rethink how your service works.

Outsourcing projects are moving towards a more “centralized” model, because it usually lowers the cost. But this measure of cost should not drive your model; real cost reflects not just what you pay, but what your purchase is worth. When a firm begins outsourcing, the first projects are usually the easiest. If your service is later in the project list, your service may be more difficult to outsource, or may serve a more sensitive client base. Whatever the reason, later phase projects will be under pressure to conform to the model used for previous projects. Be very sure that the staff has the right model and the right communications sills to be successful.

Of course, there aren’t just two models. If you are going to expand communication, you don’t need to completely change your model. For example, you might just expand the number of dedicated communicators, or you might allow all production staff to communicate… but only for simpler subjects, leaving more sophisticated questions to a dedicated communication staff. Give this some thought as early in the process as possible, and remember… BEFORE YOU AGREE TO A RATE FOR YOUR SERVICES, explicitly state your communications model! A few other issues to consider:

  1. You can have both distributed communications AND consistent communication: However, it will bring a higher overall cost. If you are offshoring, you can redirect some savings to fund this service. You should still be able to lower cost, but not quite to the level of a centralized communications model. Ask your vendors to quantify and explain the incremental cost. Have you assumed that your communications staff must stay in your highest cost locations? If your outsourced staff was capable of higher level communication, how would that impact your total cost of operation?
  2. Additional time may be required: If you are building a center of considerable size, it may take additional time to source positions that have both the technical skills for production and the communication skills for customer service. Allow time for additional customer service training for all communicators. Also, if the location is offshore, additional time may be needed to recruit staff that have good communications skills, but that don’t have an accent.
  3. Listen to your clients: Are they asking for more contact with the production staff? If you have centralized communications, are they bottlenecked when volumes are high? Have you had complaints or quality issues because information was lost or misinterpreted in the handoff between the communicator and the production staff?

Think about your needs. Think about the feedback from your clients. Then decide which model is the best for your service. And that’s my Niccolls worth for today!

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This entry was posted in Best Practices, Common Sense Contracting, Decision Making, Delivering Services, Unique Ideas and tagged , , , , , . Bookmark the permalink.

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