Five Procurement Best Practices for Contact Center Buyers

by Jon Browning
CEO, Strategic Sourcing Advisors

Selecting a contact center provider can be a challenge.  Do you go for the biggest brand in town or a niche provider?  Should you consider offshore options or keep the outsourced work as close as possible?  Deciding that you need to find an outsource provider is the start of a process that if approached in the right way, will help you achieve your long-term business strategy.

At Microsoft, I was responsible for leading the customer support sourcing strategy with over 20,000 agents supporting 47 languages.  During this time, our team led a two-year, cross-organizational effort to consolidate suppliers.  The project was recognized as an industry best practice by the International Association of Outsourcing Professionals (IAOP) and as one of the largest global Business Process Outsourcing (BPO) consolidations by the management consultants at COPC.

Having a well-defined approach to contact center outsourcing is vital to making good choices.  Naturally the most important questions and answers will differ based on your industry and the exact service required, but there are some common steps that I recommend based on my experience leading many RFPs for contact center business.

Here are the top five best practices that I recommend to anyone in the process of selecting a contact center provider:

1.  Define what outsourcing success means to you
2.  Don’t focus on cost alone
3.  Seek out a real partnership
4.  Define your selection criteria
5.  Talk to reference customers 

Before you start – define what outsourcing success means to you
As a buyer, you should create a set of guiding principles, have an expected outcome in mind, and research your options prior to starting the procurement process.  At Microsoft, when new outsourcing proposals were raised during the procurement process, we always put them through the filter of our Guiding Principles to ensure we remained in alignment with our overall objectives.

Outsourcing should provide new options, not restrict the strategy.  Define your location options right from the start of the process.  Are you only focused on US-based services, or offshore, or both?  Have you defined the pros and cons for these different delivery strategies?

Additionally, you should have realistic and proven performance targets for the provider – and be able to explain why they’re important.  You should be able to show how the targets were determined, how they will be measured, and the expected timeframe within which they should be met by the provider.

Finally, you should balance your provider/vendor portfolio to have the right number for your size of business.  If too few, you introduce new risks associated with business continuance, reducing your price negotiation leverage, or impacting a provider’s incentive for continuous improvement.  If you have too many providers, you can dilute the negotiating power of your business size and it can also be more cumbersome to manage several providers.

At Strategic Sourcing Advisors, we work with buyers to find the sweet spot for the number of providers and sites to maximize business leverage and efficiency.

Don’t focus on cost alone
Remember, what seems like a bargain could actually cost much more in the long run.  Less expensive providers sometimes recruit from less qualified candidate pools to save on wage expense and may not invest sufficiently in an environment that supports retention.  This can yield higher attrition rates when agents are unable to meet expectations, and may in turn lead to chronic poor performance because agents are constantly being replaced and new agents trained.

A chronically inexperienced agent team will always be making rookie mistakes.  However, when a provider draws from a more experienced candidate pool, this often results in quicker ramp up times, and agents that reach proficiency much faster and stay longer than others.

Cost is important, but it’s dangerous to let cost alone be the main driver when choosing a service provider.  Explore other variables such as talent scalability and a provider’s overall approach to your business before comparing cost because the price of choosing the wrong partner will be far greater.

Seek out a real partnership
When you begin an outsourcing relationship, you are not just choosing a vendor.  You are selecting a long-term partner who you should expect will be an expert working for your business.  They should advise you on how to improve and grow your business.

Good providers know this is expected of them but are sometimes unable to help if a buyer won’t include them as a valued partner in strategic discussions.  We outsource to companies because they are experts in their fields who have broad experience across industries.  Take advantage of this expertise and select a partner that can add value to your internal leadership team.

Some questions to consider include:
– Can the provider scale up with your business growth?
– Are they financially stable and prepared to invest in your business?
– Is your business too large or too small for the them? If the provider is too big, you risk not having their full attention on your business.  If they are too small, you could destabilize their operations if your business requires flexibility.

Define your selection criteria 
Defining your final selection criteria before you start is very important because it helps to reduce the non-business and emotional elements of deciding which provider to choose.  Your RFP team should decide early in the procurement process exactly how providers should be evaluated using a numerical score.

Factors that go into this evaluation should include management strength, performance history based on their customer references, their proposed governance model, long-term scalability, security requirements, and overall provider financial health. Pricing should be evaluated and scored separately from all other business metrics.  This provides an opportunity to evaluate quality vs. cost across the candidates.

Talk to reference customers
All reputable contact center providers will connect you to their existing clients.  Use these connections to explore how a provider is really delivering the service, and to understand the culture of the relationship between client and provider.  Determine if there are any areas the clients say could be improved.  Does every client appear to be genuinely satisfied with all aspects of the service they are receiving?

These five practices are important when considered together, but the single most important factor is to approach the procurement process with an emphasis on creating a strong business partnership.  Choosing a contact center provider that is focused on your business today while keeping an eye on future changes in our industry will help your business succeed in the long-term. 

About Strategic Sourcing Advisors (SSA)
SSA helps buyers of contact center services find the right providers and locations for their specific needs – at no cost or obligation.  Our team of former Microsoft leaders have decades of experience buying contact center services and we understand the difficulty of finding a great outsource partner in an ever-changing market.

We’ve managed over $700 million of global contact center business, working with many of the best providers in the industry.  Our team led Microsoft’s global contact center consolidation initiative, recognized by IAOP as an industry best practice.  We apply this experience to match you with the right outsource partner to accomplish your process improvement and cost reduction goals.

Jon Browning, CEO
jon.browning@ssabpo.com