Government customer service outsourcing has never been more in the media spotlight. With talk of Centrelink outsourcing due to spiralling call wait times, and NSW Government outsourcing shared services onshore as well as to India, it’s time to look at what is being outsourced and why. We asked customer service outsourcing expert, Sharon Melamed, her thoughts.
Which areas of business lend themselves to outsourcing?
There are five types of customer service outsourcing that are popular in government – some tactical, some strategic:
1. After-hours call centres are commonly outsourced by councils, which have an imperative to offer residents a round-the-clock service. On the flip side, councils are less likely than their state or Federal counterparts to consider outsourcing their “business as usual” hours.
2. Overflow: Where call volumes are higher, Federal Government agencies in particular use third party customer service outsourcers to provide “overflow” service supplementing their own internal contact centres. This helps in environments with lots of peaks and troughs or seasonal call patterns. Overflow is also referred to as “surge capacity”, but these terms are sometimes just used because of negative connotations with the word “outsourcing”. Overflow centres also provide the advantage of site redundancy in business continuity planning.
3. Campaigns: When government introduces new policies or short-term initiatives, outsourcers can provide speedy ramp-up/ramp-down capacity. For example, the customer service associated with the national Census, which runs every four years, has been outsourced for many years. If a State rolls out a new eticketing system on public transport, again there will be a large spike of activity around launch, which cannot be managed with existing infrastructure and resources, and is better managed by an outsourcer.
4. Specialist functions: Areas which require a highly specialised skillset, such as multilingual or telephone interpreter services, are often outsourced. Another example is health information or advice, as we have seen with the establishment of Healthdirect, an entity funded by both Federal and State governments, with the task of procuring and managing outsourced vendor relationships.
5. Strategic, long-term outsourcing: This is typically where a government entity decides that running customer service functions is not their core competency, and they outsource lock-stock-and-barrel to a third party to access best practice and lower cost to serve.
What are the perceived obstacles to outsourcing?
The biggest obstacles are the political environment (including proximity to election time, and which party is in power); concerns about security; and a sense of ceding control. Concerns about security are often unfounded, as outsourcers are subject to the same security requirements as internal operations – from personnel background checks and clearances, through to installation of intruder-resistant mesh in the ceilings of contact centre facilities! It’s really a misconception as well that outsourcing means surrendering control – quite the opposite, unlike an internal contact centre, external customer service providers are subject to a contract and penalties for non-performance, with extreme rigour around reporting and process. At the end of the day, it should be about, “can outsourcing deliver better customer service outcomes and offer better value for money”?
What are the main benefits the public sector can reap from outsourcing?
In the current economic environment, the focus is on fiscal responsibility and contestability. With that comes the realisation that public sector is not necessarily always the optimal provider of customer service, from a cost and quality perspective. Sometimes the private sector, or even the not-for-profit-sector, might be a better solution. If another entity can offer a better level of service with the same budget, then it should be considered. Outsourcing also gives the opportunity to leverage a more agile workforce, global best practice and new technology.
Matchboard is partnering with Criterion Conferences on the Enhancing Public Sector Customer Service conference in Melbourne in February 2017. Attend to develop strategies for measuring and meeting changing customer expectations.