You might think that cutting costs and people are the main reasons operators outsource customer care functions, but when you ask them to supply their own reasons, they deny such base motives.
Instead, “improving customer care” is the number one priority for the UK telecoms industry when outsourcing, according to research conducted by LogicaCMG.
The study reveals that 100% of operators surveyed believe that freeing up resources to focus on customers is vital to their success in the marketplace.
All operators highlighted the main reason for outsourcing was to help them focus more on customer care in the face of intense competition. When asked to rank the key drivers of outsourcing (mean score out of five) to respondents noted: increased flexibility through outsourcing offers more ability to keep ahead of the market and concentrate on customers (4.4); improved access to skills to enable operators to develop new products and services faster (3.2); delivering new applications more quickly to maintain a competitive edge (2.6); and delivering higher quality products and services to customers by breaking into new markets (2.6).
The survey of the leading UK telecoms companies reveals that the majority of operators expect to reduce costs by an average of 17-20% through outsourcing, with some looking to cut costs by more than a third. In addition to managing costs in a competitive environment, telecom operators cited a target 5% reduction in time to market for key applications and consumer services.
All operators surveyed stated that the cost savings made through outsourcing would be reinvested back into the business as opposed to using the savings to either reduce debt levels or to place in cash holdings.
Derek Kemp, managing director, of LogicaCMG’s UK telecoms business, said, “Contrary to the typical view of outsourcing, the telecoms industry is increasingly seeing this activity as a way of reinvesting in business rather than just cutting costs. With the battle for customers still fierce, outsourcing is being seen as a route to securing competitive advantage by providing the best customer service to reduce churn.”
Other key benefits seen by operators in the shift to outsourcing include 40% of respondents noting an improvement of market and brand reputation. The study also revealed that 20% of operators have plans already in place for further outsourcing of various functions over the next two years.