Outsourcing firms, especially those in the contact center space have to be that one-half-step ahead of their clientele, which tends to be fairly conservative, but which expects their suppliers to be on top of trends.
Yet this is a tail-perched-on-the-picket-fence situation because outsourcing is a notoriously highly-competitive thin-margin business and outsourcers have little spare cash. This means technology investments must have strong and immediate ROIs, yet these suppliers must find the money to have the tools to meet clients' needs.
And that sharp point is about to become even more uncomfortable with the rise of social media.
Peter Ryan, Lead Analyst - BPO and Contact Center Outsourcing & Services, Ovum says that means they need to be on top of social media for their clients. In a recent Ovum Straight Talk Daily he points out, and correctly, that social media has "has gone beyond the point of fad, with more users than ever signing up for membership on one or more platforms supporting these activities."
Ryan says Twitter now accounts for more than 100 million people as subscribers, and claims to be adding over 300,000 per day. Equally if not more importantly it attracts more than 180 million unique visits per month, of which 75 percent come from outside the subscriber base. And Twitter is just one site. Others like Facebook and Myspace also have high adoption levels.
"Ovum sees this trend continuing, especially among mobile users as many devices support social media applications," says Ryan. "This trend has not been lost on commercial enterprises, many of which are looking to enhance their standing with online customers by setting up a presence on popular social networking forums."
Alas outsourcers seem to be behind the eight-ball. Ryan says social media growth "seems to have caught most CRM outsourcers by surprise."
"It is Ovum's view that the outsourcing vendor community needs to work quickly to develop a social media support platform alongside current voice, email and web-chat deployments," he points out. "Enterprises are certain to view an outsourcer's ability to engage with end users through social networking as an emerging market differentiator, especially if it enhances loyalty and satisfaction."
Ovum also believes, says Ryan that while outsourcers need to start developing social media offerings "they need to be careful in formulating strategies that will ensure long-term vendor profitability and end-user satisfaction."
Well that's tricky and is just one of the many challenging issues involved. There's nothing so far showing that buying X solution for Y price will return Z in added business with social media products. Instead it is more if anything going to be like the negative i.e. if "you don't have it, forget it."
Many outsourcers no doubt painfully remember the CRM boom back in 1998-2000 when they purchased, for roughly the same rationales as for social media tools the-then-only-models available i.e. the big-ticket top-heavy/consultant-loving, painful-and-forever-to-install applications. Only to find out that many existing and prospective clients didn't really want the solutions after all or they had different CRM applications and couldn't talk to the outsourcers' without even more money being sent, and little to show for it.
After losing money outsourcers really couldn't afford to spend (though with the CRM vendors, systems integrators and consultants happily tripping to the bank) they wised up and said "we can link into any CRM system" and leave it at that.
Here's another pratfall: which locations are best suited to handle social media response? The tendency to take fast-growing work like this is to shift it offshore to cut costs, says Ovum. Placing the brakes on offshoring though is the need to maintain quality, and quality is everything in social media. Offshoring programs have run into flak because the agents can't relate to the customers. And for social media you need agents with superior comprehension and writing abilities, which are far better than those typically found in contact centers at the money they can pay.
Equally if not more importantly social media is media. Individuals with media skills i.e. know what to say, how to say it, still don't come cheap even with the dying of journalism thanks to the Internet. And they're not exactly the type of people who willingly wander into a contact center, least of all one run by an outsourcer, whose centers are typically at the lower end of the pay scale and seek a job.
One option identified, and correctly by Ovum, is home-based agents. My take is that they typically have the skills needed for social media; these employers are smarter and have better writing abilities. Home working, especially those setups that do not require agents to visit premises offices makes the recruitment pool virtually unlimited. Yet Ovum says clients may be reluctant to do just that.
The holdback is psychological. Despite overwhelming evidence showing that home agents, and teleworkers in general are more productive than their premises counterparts and that contact center agents are subject to more monitoring and controls than astronauts or test pilots, too many outsourcing clients don't trust their programs to go to home.
"If this channel continues to grow as rapidly as expected in the next 12 months, reflecting past growth rates, it is conceivable that lower-cost locations offshore would need to be leveraged to recruit the appropriate numbers of agents to provide the required support," says Ryan's report for Ovum. "However, with quality concerns omnipresent, some clients may prefer to opt for a home-based agent model. The flipside of this is that it could elevate data protection and employee supervision fears among prospective clients."
The bottom line is this though: if companies want to tap into customers via social media, either internally or via outsourcers they have get over their fears and send their work home: where the qualified people are who can make this channel happen. Only with the savings/benefits with home agents can outsourcers find the money to invest in the training and tools for social media to make such programs. Only then can they carry out the last lines from the Ovum report:
"Once outsourcers are able to overcome such operational challenges and demonstrate thought leadership in how to optimize end-user experiences, it is highly likely that they will find social media provides an ongoing complementary stream of revenues in addition to traditional customer-facing channels."