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Out of sight, out of mind

Wed 1 Sep 2010
FYI, this story is more than a year old

Companies have been outsourcing sensitive functions like payroll since the 70s, but when it comes to the outsourcing of CRM they get nervous about the IT aspects of such a move. Why?

 Outsourcing CRM – call centres in particular – has the potential to cut costs as well as providing better scalability and management. I’ve heard most arguments against such moves, invariably involving the word "hacking”, but in today’s hyper-connected world it makes little difference to digital security whether your data is housed within your company’s local network or in Bombay.

Big business has led the way in outsourcing and as a result of the significant investment they have made, many specialist outsourcing organisations have come and gone over the past 10 years. The successful CRM suppliers quickly realised that in order to stay in business they needed to ensure they were able to keep their client’s data secure and, as such, have security expertise in place that rivals what many organisations are able to provision internally.

That said, any move toward outsourcing should entail a significant amount of due diligence. At a bare minimum you should, from an IT point of view, review any proposed outsourcing supplier’s track record, determine whether they have any relevant security certification, and review their disaster recovery abilities and their security operations and procedures. When performing this audit, written responses are not sufficient.

Go on-site and evidence the suppliers’ disclosure – if you lack the resource to perform this audit, engage a third party to do it for you.

 All outsourcing agreements will involve a stringent SLA and in that agreement should be very clear ownership of data by your organisation – not just the original data at handover, but also all subsequent data generated as a result. Incredulously, this is often overlooked and causes real headaches.

Technology should not be the barrier in outsourcing; rather business aspects of such an arrangement need to be carefully considered at an organisational level.

This external party may become the primary contact point for your customers, so evaluate the commercial and strategic risks. A common oversight when engaging an external CRM supplier is not managing the outsourcing supplier properly. There should be very clear interfaces with the supplier that will enable an ongoing, close relationship. This is critical to ensuring your supplier is on-brand when communicating on your behalf. If you don’t get this right, by outsourcing you could potentially lose control of your voice and with it your customers.

At some stage in this journey the question will also arise of whether to look domestically or offshore when seeking an outsourcing provider. Today’s global economy and communication technologies mean geographical location isn’t critical. There are many financial, and in some cases legal, advantages to looking offshore; however you must be mindful of a few issues that may not be immediately apparent.

One of the most difficult issues to discuss is cultural difference. This is a delicate issue, but one that must be considered. Reflect on the following two scenarios:

1. Telecom came under heavy fire late last year when it outsourced its 018 service to the Philippines. The complaints were fairly focused — the call centre people now taking 018 calls had no local knowledge and struggled with New Zealand placenames. In response, Telecom has subsequently invested heavily in training, but the bottom line is this frustration will always exist to some degree, as the call centres are not in New Zealand.

2. On the other side of the coin, many local research companies have also outsourced their call centre operations offshore. I participate in a reasonable number of IT-specific telephone research polls, some lasting up to two hours, and they present no issue. The person calling usually displays the height of professionalism and sometimes English is their second language. The difference, however, is that local knowledge is irrelevant to the service.

When looking offshore, one big attraction can be the comparatively low salary costs. On the one hand this represents a significant cost saving, but could you be lowering the "fiscal incentive” required for your competitors to buy access to your data — maybe to the point they find irresistible?

Lastly, from the safety of New Zealand we seem to forget about things like civil unrest, coups and war. They happen. If you outsource your operations to an area that is subsequently affected by any of these, you need to have a continuity plan.

So, is outsourcing your company's CRM putting your customers’ data at risk? I can’t answer that for you; there are too many variables, but the IT aspects are the least of your worries.

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