The risks of complacency in an outsourcing partnership
Written by: Annette Timmins, Vice-President of Global Sales, TELUS International
Your current outsourcing provider’s performance meets its goals most months. Their quality scores are good. Pricing seems fair. You’ve been ignoring the increased attrition because the supplier pays for training when agents turnover. It’s not a bad situation; it’s comfortable. So, why make a change?
Comfortable isn’t always a good thing. Challenging the status quo may not be the easiest path, but without investigation you may be unknowingly missing out. What would the impact be to your organization if a new suppliers’ agents turned over at a rate 50% less than your current vendor? Imagine the ongoing impact to CSAT or sales conversions with more tenured agents answering your calls instead of new personnel constantly hitting the queue. Can you afford the cost of these lost opportunities with your customers?
Improving the customer experience and reducing overall cost of ownership is possible with a supplier that has better tools for innovation, a more knowledgeable and stable labor pool and a similar culture. You just have to figure out the best way to assess your options.
The limits of the traditional procurement process
Many organizations' procurement processes can make it challenging for customer experience professionals to identify a new outsourcing partner. Why? Because procurement scorecards normally use weighted criteria to evaluate the best offer on cost, technology stack, quality, training and other factors.
While cost is important, most supplier scorecards miss other key aspects of what it takes to create and foster a successful outsourcing partnership over the long term, including:
- How well does the supplier match up in terms of cultural affinity?
- How will the supplier grow with the client over a multi-year engagement?
- What digital innovations can they bring to the existing technology stack?
- How do they compare to incumbent suppliers?
Criteria such as these rarely show up in an RFP because it’s difficult to position the questions in a way to adequately score them. Fortunately, there is an alternative process to consider.
After working with hundreds of companies over the last 20 years that outsource their customer service and sales operations, I believe the competitive dialogue (CD) process is a great way to dig into the details to get a more expansive view of the market, and ultimately reduce the risk of changing suppliers.
The competitive dialogue process
At its core, CD is a more holistic alternative to the traditional procurement process. Not only does it help customer experience professionals assess potential partners' services and experience, it also facilitates dialogue that uncovers potential matches in culture and approaches to innovation. In a CD process, “lowest price” isn’t the basis for the award.
CD typically requires several independently facilitated workshops or sessions with key stakeholders in order for both the client and the vendor to develop trust, open communication and teamwork. The goal of the process is to efficiently enable suppliers to learn about the company's needs, while giving internal stakeholders a chance to interact with — and gauge compatibility —with suppliers in person.
With CD, you can get more targeted and innovative solution offerings that may not have been uncovered in a traditional RFP. CD can also promote a faster financial close and helps to prevent cost escalation later in the contract because of a reduced likelihood of a misinterpretation of terms.
For outsourcing providers, the competitive dialogue process is a great way to better understand a potential client’s current set of challenges, pain points and goals. It also levels the playing field by mitigating the incumbent supplier advantage of having past relationship data and enables all suppliers to conduct their own due diligence around the following areas:
- Corporate goals and objectives
- Quality Assurance and training guidelines
- Technology and software
- Desktop navigation by agents
- Workforce management strategy/goals
- Switch/queue routing
- Channel management
The real risk
The CD process may not be right for every organization, or in every instance. In certain scenarios, a traditional RFP process that prioritizes cost savings can be quick and efficient versus a CD process that may require a more concentrated investment of time and effort from the organization.
The real risk, however, is not in the way you choose to evaluate potential suppliers but in the cost of complacency. You may counter with statements about the price of changing suppliers; how switching would require a greater investment of your team’s time let alone involvement from other areas across the business, including legal, IT, procurement and training. While this may be true, not exploring what’s out there could cost you more in the long run by way of points in customer satisfaction, lost sales and at its worst, customer attrition; all good reasons for risking a change.