Outsourcing vs in-house contact centers

Which is right for your business?

When it comes to managing customer interactions and support, businesses have two main options: outsourcing their contact center operations or handling them in-house. Both approaches have their own set of advantages and disadvantages, and the best option for a particular business will depend on a variety of factors such as size, budget, industry, and business goals.

In this article, we’ll take a look at the pros and cons of outsourcing versus in-house contact centers, and help you decide which option is right for your business.

What is contact center outsourcing?

Contact center outsourcing is the practice of hiring a third-party company to handle customer interactions and support on behalf of a business. This can include phone, email, chat, and other communication channels. Contact center outsourcing is often referred to as “call center outsourcing”, as it typically involves handling incoming and outgoing calls.

Contact center outsourcing is a popular choice for businesses looking to reduce costs and improve efficiency. By outsourcing their contact center operations, businesses can tap into the expertise and resources of a specialized provider, which can lead to improved customer experiences and increased productivity.

What is an in-house contact center?

An in-house contact center is a customer service and support department that is run and managed internally by a business. This means that the business is responsible for all aspects of the contact center, including hiring and training staff, managing operations, and handling customer interactions.

In-house contact centers are typically more expensive to run than outsourced contact centers, as businesses have to bear the costs of setting up and maintaining the department. However, they offer more control and flexibility, as businesses have direct oversight of their customer service and support operations.

Pros and cons of contact center outsourcing

There are several advantages and disadvantages to outsourcing your contact center operations. Here are some of the key pros and cons to consider:

Pros:

1. Cost savings: Outsourcing your contact center can be a cost effective option, as you don’t have to bear the costs of setting up and maintaining an in-house department. This can be especially beneficial for small businesses or those with fluctuating customer demand.
2. Improved efficiency: Specialized contact center outsourcing providers often have access to advanced technologies, such as call center software, and processes that can improve efficiency and reduce response times. This can lead to better customer experiences and increased productivity.
3. Access to expertise: Contact center outsourcing providers typically have a team of trained and experienced professionals and customer support representatives who are experts in customer service and support. By outsourcing your contact center, you can tap into this expertise and benefit from their skills and knowledge.

Cons:

1. Control and consistency: One of the main concerns when outsourcing your contact center is that you lose some control over your customer service and support operations. You don’t have the same level of oversight as you would with an in-house team. This can be a concern for businesses that value control and have their customer experience as a core business activity.
2. Communication issues: With an outsourced provider, there may be location related barriers such as time differences and language variations to consider. This can increase your costs of travelling between sites and can make it difficult to coordinate and communicate effectively with your contact center team.

Pros and cons of in-house contact centers

Here are some of the key pros and cons of having an in-house contact center:

Pros:

1. Control and flexibility: One of the main advantages of an in-house contact center is the level of control and flexibility it offers. You can tailor your customer service and support operations to meet the specific needs of your business and have direct oversight of your team. This can be especially important for businesses that value a strong company culture.
2. Improved communication: With an in-house team, you don’t have to worry about time differences or language barriers, as everyone is located in the same place. This can make communication and coordination easier and more efficient.
3. Quality control: With an in-house contact center, you have complete control over the training and development of your team. This can lead to a more consistent customer experience.

Cons:

1. Higher costs: One of the main disadvantages of an in-house contact center is the higher cost of running and maintaining the department. You’ll have to bear the costs of hiring and training staff, as well as setting up and maintaining the necessary infrastructure and support teams.
2. Limited resources: An in-house contact center may also be limited by the resources and expertise available within the business. This can make it harder to scale and adapt to changing customer needs.
3. Decreased efficiency: Without the specialized tools and processes of an outsourced provider, an in-house contact center may struggle to achieve the same level of efficiency and productivity.

How to decide between outsourcing and in-house contact centers

So, how do you decide whether outsourcing or in-house is the best option for your business? Here are some factors to consider:

1. Size and scale: If you have a small or medium sized business, outsourcing your contact center may be the more cost effective option. On the other hand, if you have a large business with a high volume of customer interactions and where CX is a core business activity, an in-house contact center can potentially be more efficient and cost effective.
2. Budget: Your budget will also play a role in your decision. If you don’t have the resources to set up and maintain an in-house contact center, outsourcing may be the better option. However, if you have the budget to invest in an in-house team, this may be the more flexible option to cater to your business needs.
3. Industry and customer needs: The specific needs and expectations of your customers and industry will also influence your decision. For example, businesses in the healthcare or financial industries may have more stringent regulations and customer expectations, which may make an in-house contact center more appealing.
4. Business goals and values: Finally, consider your business goals and values when deciding between outsourcing and in-house. If you prioritize control of your CX the most, an in-house contact center may be the better option. On the other hand, if cost savings and efficiency are your top priorities, outsourcing may be the better choice.

Conclusion

Deciding between outsourcing and in-house contact centers is a complex decision that requires careful consideration of your business needs and goals. Both options have their own advantages and disadvantages, and the best choice will depend on a variety of factors such as size, budget, industry, and customer needs. By carefully evaluating the pros and cons of each option, you can make an informed decision that is right for your business and your customers.

TSA are Australia’s market leading specialists in CX Consultancy and Contact Centre Services. We are passionate about revolutionising the way brands connect with Australians. How? By combining our local expertise with the most sophisticated customer experience technology on earth, and delivering with an expert team of customer service consultants who know exactly how to help brands care for their customers.