Definition of Outsourcing in a Call Center
A call center is a business that specializes in receiving and sending telephone calls to customers. Telemarketers, or customer support staff overseas, make telephone calls to U.S. customers of a bank, for instance, to sell them products or simply answer questions if necessary. You can call your bank on a toll-free number without realizing you are actually making an international call to a call center in south Asia.
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Outsourcing
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Outsourcing in a call center is subcontracting an offshore company that specializes in making and answering telephone calls on behalf of a corporation in the United States, for example. An increasing number of corporations are doing that because of the low cost of skilled labor in emerging economies such as India, which has become the global center of outsourcing business. Outsourcing services account for 26 percent of the total exports from south Asia. The advantages it has over its competitors is that it is an English-speaking country with computer-literate manpower.
Infrastructure
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To consolidate its edge as Asia's No. 1 destination for outsourcing, India is upgrading its infrastructure in cities where such businesses are based, namely Bangalore, Delhi, Mumbai, Pune, Kolkota and Chennai. In these cities, communications, roads and power are being upgraded to international standards. The other reason why India edges out its competitors is that within its borders, it has highly regarded software companies. India's market share in outsourcing is 46 percent.
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Globalization
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With low-cost labor and efficiency in producing merchandise or service in emerging markets such as India and China, U.S. corporations have had to adjust by seeking a share in what is now called "frugal innovation" to remain in business. The lower the cost of production, the more competitive a company remains in today's global marketplace. By outsourcing, companies reduce the cost of doing business while making sure that quality is not sacrificed.
Division of Labor
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In economic terms, by outsourcing a call center, a company is actually applying the principle of division of labor and economies of scale. With advanced communication technologies, division of labor is increasingly taking the shape of outsourcing. Various departments are being placed in different parts of the world while working on the same tasks. A call center in India, for instance, might be doing customer service or selling products for Citibank in the United States. By economies of scale, the cost of production per unit reduces as a business expands.
Results
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The whole concept of outsourcing a call center is to deliver results. The outsourcing company must be able to tell whether by outsourcing, the company is generating more revenue from sales, for instance. One way of doing that is by conducting a survey. By talking to its existing customers, a company is able to determine whether an outsourced center is not just cost effective, but also is meeting its objectives of helping to boost profitability by increased sales, for example. That is why a corporation has to take into account the reputation and the capability of a call center before contracting it to carry out its telephone services.
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References
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- Photo Credit call center image by Aisha from Fotolia.com
