Offshoring has been an option for many years, with businesses primarily looking to reduce the cost of customer service. In the 1990s, while China became the world’s factory floor, India became the undisputed offshoring giant for services like IT and call centres.
Offshoring hasn’t been the most popular choice with many Australian customers, who complained about what they perceived as a downgraded customer service – not to mention the loss of local jobs.
Many businesses could live with these downsides due to the cost savings they achieved. However, since the start of the pandemic, there has been a pushback to onshore led by Australia’s banks, telcos, and utilities companies.
Does this mean the end of offshore outsourcing? By no means. According to Statistia, despite a slight dip in 2020, offshoring is expected to grow at a Compound Annual Growth Rate (CAGR) of 6.48% between 2023 and 2027 to be worth $450 billion annually.
This is proof, if any were needed, that there are incredible business benefits to be accessed through offshoring. These include cost reduction, access to new talent when it’s challenging to recruit in Australia, the ability to scale for growth, and – despite past reputation – improved customer experience.
Of course, accessing all of those benefits is challenging. The old ‘flat’ model of outsourcing huge volumes of interactions without worrying too much about quality is over. Customers will no longer settle for it.
Instead, businesses are turning to a premium offshore model that delivers the best of all worlds.
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The Advantages of Offshoring
Offshoring is a business strategy that companies may implement for many reasons, such as to cut costs, optimise their workload management, or reduce in-house burnout.
Customer service and CX activities lend themselves to offshore outsourcing because, for the most part, they can be conducted and managed remotely.
Here are some of the significant advantages of offshoring:
- Improved CX: With the capacity for 24/7 and multilingual support that offshoring provides, customers will feel more valued by your company. This enhances your CX, brand reputation, and customer retention.
- Reduced costs: Saving money is always a priority for businesses, so offshoring is ideal. By employing offshore-based companies with lower operational and labour costs, outsourcing clients can reduce expenditure and save money – on wages, utilities, equipment, and other overheads.
- Global talent access: By outsourcing your operations abroad, your company can access a wealth of talent from all corners of the world. This allows you to procure the best workers and find those with skills that may not be readily available in your country’s local market.
- Scalability: Offshoring increases your company’s ability to scale up and down with demand. Given the fluidity and flexibility of an offshore contact centre, your firm can grow or shrink as required with minimum fuss.
- Focused operations: Offloading back-office and non-core tasks, like back-office admin and data entry, gives your organisation the freedom to focus on primary operations. This could drive innovation, improve brand reputation, and foster business growth.
The Challenges of Offshoring
Although offshoring has many benefits, they don’t exist without pitfalls and challenges. If not properly addressed, issues like those listed below can end up undermining any of the business benefits achieved with offshoring:
- Cultural differences: Differences in culture, language, and time zones can cause problems with communication. A lack of cultural alignment can also lead to frequent misunderstandings and potentially lead to unintentional offence when staff interact with one another or with customers.
- Data security: When you utilise an offshore BPO, you place a certain level of trust in them and their cybersecurity systems. You need to work closely with your partner to build a secure infrastructure that respects the data sovereignty rules governing your sector – many Australian businesses have to keep their data onshore.
- Quality assurance: Onshore customers and internal stakeholders must be reassured that your company will maintain high service levels with an offshore outsourcing partner. Failure to provide sufficient reassurance can lead to poor customer retention and stunted growth.
The good news is that many companies have successfully overcome these challenges to develop productive and prosperous offshore operations.
Premium Offshore Outsourcing
Rather than focusing solely on cost savings, premium offshoring is an approach that aims to deliver the best balance between quality of service and cost.
Customer experience is at the heart of this approach, which is designed to deliver the best mix of outsourcing strategies for your company. Premium offshoring is composed of the following elements:
1. Smart-Shoring Strategy
A smart-shoring strategy is built on the understanding that contact centres are no longer just cost centres; they are centres of value creation. Great CX pays. There are more effective approaches to achieving your business goals than simply offshoring everything to reduce costs. Instead, your outsourcing strategy needs to impact both sides of the equation – cost and value – to deliver the most significant gains.
The smart-shoring approach involves utilising a blend of onshore, offshore, and automation solutions designed to deliver the best possible customer experience without compromising on cost efficiency.
This strategy allows organisations to enjoy the benefits of both onshore and offshore operations. High-value or high-impact activities, for example, might be retained onshore or even in-house. Simplex or volume activities can be outsourced offshore – or even automated – to access cost savings. This mitigates any potentially negative impact of offshore outsourcing.
2. Cultural Synergy
Cultural differences between the country where your offshore operation is located and your customers’ location can impact the quality of service delivered. If your offshore agents and customers cannot connect or find a shared cultural language, the customer experience will suffer.
At the same time, your company’s managers and other staff need to communicate effectively with the managers and frontline workers in your offshore contact centre. Miscommunication leads to poor goal setting, misunderstanding of objectives, misallocating resources, and poor results. A premium offshore outsourcing solution seeks to close the gap between in-house and outsourced teams, whether onshore or offshore. This includes training offshore teams in the nuances of the culture and language of their customer base and ensuring they are equipped to deliver a service that feels local to customers.
3. Onshore Management Team
A vital feature of a premium offshore outsourcing solution is that your contact centre should have an onshore management team to oversee your offshore operation. This ensures seamless integration between the onshore and offshore teams, and your other internal teams, and helps uphold the highest service quality standards. The onshore management team provides guidance, support, and oversight, ensuring the offshore team is aligned with the company’s goals and values.
4. Commitment to Customer Experience
Your chosen contact centre outsourcer must commit to a great customer experience, whether delivered onshore or offshore. The goal should be to provide a seamless, frictionless customer experience that drives customer satisfaction and loyalty. By focusing on value creation and customer experience, and with the strategic use of an onshore management team, it’s possible to redefine what offshoring can achieve.
It’s the best of both worlds.
1. Building Cultural Synergy
A new regional airline in Australia was looking to establish a digital-first customer engagement model solely through async messaging and wanted to maintain its ‘Aussie’ brand tone in all customer comms.
TSA Group built a specialist team based in our Philippines contact centre. Candidate profiling and AI were used to recruit people with the right skills and personality, and we focussed on creating a connection to the brand and customers through language, contextual and cultural alignment training.
The technology was set up to include TSA’s knowledge management system, and we created pre-canned responses for consistent customer messaging and efficiencies. The results have been highly effective, with only 4% of chats needing voice escalation.
The client says that appointing TSA is their best decision since launching the business.
2. Enhancing Customer Experience
A leading Australian telco company approached TSA Group seeking assistance to enhance its customer experience. The offshore team that TSA Group recruited and trained handled a high volume of simplex and routine customer interactions, freeing up the client’s onshore team to focus on more complex customer issues.
The offshore team was trained to handle a wide range of these less complex customer queries, from billing inquiries to technical support. This enabled a seamless customer experience, regardless of the nature of the customer’s question, and ensured that customer calls were always answered promptly. We saw a significant improvement in customer satisfaction scores due to this activity.
3. Agile smart-shoring delivery for CX
A leading global car manufacturer needed a partner that could meet their budget constraints, consolidate their contact centre function, and retain and engage their employees while delivering a premium customer experience for each brand.
TSA Group suggested a premium offshoring model, which included smart-shoring. A team in the Philippines handled simplex enquiries, whilst senior team members and leadership were based onshore in Australia.
TSA’s Support Cell was built to help embed knowledge in the first six months. Client-approved Certification Pathways promoted ongoing agent development and reinforced the client’s brand identity.
All the client’s targets were met within the first six months – including a lower than 2% abandon rate, a CSAT score of 4+, and improving dealer sentiment. The knowledge management system now holds over 700 processes, and Support Cell has been redistributed to support other areas to allow for ongoing process improvement.
The Transformative Power of Premium Offshore Outsourcing
Offshore outsourcing has many advantages, which is why it has been so popular for many years. However, it also presents companies with some steep challenges that can be difficult to navigate.
A premium offshoring model is the most effective way to optimise cost reduction and improve CX. It should incorporate both onshore and offshore contact centres to leverage a global talent pool, onshore management to ensure cultural and business alignment, and a commitment to CX.
A well-executed offshore strategy mitigates the challenges and amplifies the benefits by consistently applying appropriate resources to maximise CX and optimise spending.
Premium offshore outsourcing makes it possible to deliver a customer experience on par with onshore teams while enjoying an offshore model’s cost benefits.
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.