Friday, August 27, 2004

Improving Outbound Sales Through Outsourcing

BY MURIEL LEGENDRE, THE PRODUCT LINE, INC.
Just a few years ago, face-to-face selling was still the primary way to market any product or service. Rare were the companies or individuals who purchased an item over the phone from an unknown caller. The changing conduct of society, the falling cost of telecommunications and the revolution in technologies have transformed the way companies are selling their products and services today. More important, competition in the marketplace and the necessity to achieve greater efficiencies have driven companies to further reduce the cost of their business operations. More and more, the telephone is a primary media used in most selling processes.
Many corporations today engage in the high-margin business of telephone sales. Programs range from single-call sales for a product or service, to lead generation for a sales team (some involving appointment set up, seminar registration or follow-up calls on inquiries made on a customer service line). There are almost as many ways to implement an outbound campaign as there are products or services to market.

Strategically outsourcing outbound sales has increased greatly among Fortune 1000 corporations whose main objective is to increase sales while reducing their costs. Some reluctance still exists, however, due to issues historically related to the outsourcing decision: lack of data control, fear of over-dependency on a third-party vendor, internal resistance, management issues, etc.

Before presenting the benefits of outsourcing, it is important to bear in mind the critical success factors for an outbound campaign. Thereafter, improving outbound sales, whether through outsourcing or internally, lies in enhancing any or all of the key areas:
Pre-direct-mail campaigns,
Lists,
TSR selection,
TSR training,
Technologies utilized,
Incentive programs,
Offers proposed to potential customers.

The Key Benefits Of Outsourcing
Understanding the key areas listed above is critical to ensuring the success of an outbound sales campaign. More and more corporations, in order to save the time and investment required to improve their outbound program, turn to outsourcing as a solution to enhance their sales while decreasing their cost of business acquisition.

Indeed, the potential benefits of teleservices outsourcing can be enormous for a company. Teleservices agencies are experienced in a wide range of business-to-business and business-to-consumer applications and enable a corporation not only to lower its costs and increase its net sales revenues, but to also free up capital investment for use in other key areas and generally refocus on its core competencies.

Reducing Your Costs
One primary benefit in relegating phone sales to a teleservices agency rather than handling them in-house is certainly the reduced cost of the operation. A teleservices agency benefits from significant economies of scale in spreading expenses among numerous clients and thereby amortizing many general operating expenses. As an example, outsourcers immediately have access to leading-edge technologies at the lowest possible cost per seat.

As technology is an area for outsource saving, so is human resources. Hiring and retaining TSRs for an outbound program requires specific expertise and systems, as well as ongoing focus and energy. By off-loading programs to a third-party vendor, this critical and tedious function can deliver tremendous time and money savings. Further, it prevents companies from bearing the cost of inefficiencies associated with potential downtime or scheduling conflicts. A teleservices agency shares resources among clients and if a campaign is interrupted for any reason, moving TSRs instantaneously to a different campaign provides a flexible and cost-saving solution for affected clients.

Another important advantage in the area of human resources for outsourcing companies is the elimination of the cost of employment taxes and fringe benefits. Companies can also negotiate the most mutually beneficial compensation plan with their teleservices agency and be charged on an hourly, minute or even sales basis. The pay-for-performance pricing plan completely absorbs the costs associated with inefficiencies, mediocre performance or test/program failure. Vendors then share in the risk and are rewarded for success when they deliver results.

Increasing Your Revenues
Reducing cost should not be the only factor in an outsourcing decision - cost-effectiveness should be thoroughly studied. In building the right partnership, outsourcing outbound sales usually can also improve productivity.

Indeed, many advantages offered by a third-party call center contribute to improving conversion ratios as well as increasing the average revenue per sale in a campaign.

Beyond accessing leading-edge technologies at a low cost, outsourcing companies benefit from performance improvements associated with the use of state-of-the-art equipment, superior campaign management tools and CTI expert solutions. The latest predictive dialers increase contacts per hour and maximize lead use, automatically reschedule any call that does not go through to a prospect and provide pertinent customer data to TSRs, thus enabling them to focus on prospective customers and consequently improve sales conversion ratios.

Another benefit provided by teleservices agencies is their in-depth scripting expertise. Vendors are experienced in testing, researching and continuously modifying scripts online to achieve the best results. They are able to develop constructive, unobtrusive scripts and ensure agents a more comfortable and successful approach.

Last but not least, teleservices agencies have a history of developing effective, sophisticated compensation plans for TSRs as well as advanced upselling and cross-selling technique training. This expertise applied to a campaign ultimately converts into more sales and higher revenues per sale.

Improving Your Overall Quality
Beyond the commonly observed benefits of reduced cost and increased sales revenue, teleservices agencies bring some additional critical benefits that further enhance the cost-effectiveness of an outbound sales program.

Accessing Call Center Expertise. Third-party call centers bring in-depth experience in handling a variety of complex and challenging campaigns. Since teleservices are their core competencies, they possess extensive cross-knowledge in all areas related to outbound sales and can impact the critical success factors of an outbound campaign. Call center specialists can pinpoint the key criteria in optimizing a lead list and identify best which caliber of TSR is needed for a specific campaign through the use of proven screening processes.

Based upon their broad experience, teleservices agencies know precisely what a direct mail piece should include or what the lag time between the receipt of a specific letter and the follow-up call should be. Equally important, part of their core business is the responsibility to concentrate on testing a program's multiple variables. Trying different scripts, offers and lists is key to enhancing outbound sales results. A teleservices agency not only uses its experience with diverse clients, but also focuses on testing to ensure the best possible program.

Taking Advantage Of State-of-the-Art Monitoring. Quality is best ensured through ongoing monitoring and the development of creative, state-of-the-art monitoring techniques. These time-consuming and complex functions stand among priorities for teleservices agencies that usually have a dedicated team in place implementing formal and customized quality assurance processes. Outsourcers selecting quality-focused teleservices agencies can expect between two percent and four percent of all their calls to be monitored, which leads to superior agent performance and productivity.

Focusing On Key Business Areas. A secondary benefit associated with the outsourcing decision is that while the teleservices agency concentrates on the outbound program and ensures that all aspects are managed to enable a successful campaign, the outsourcing company can concentrate on its core business. Entrusting the right partner to execute a sales program not only frees up time, but also assets and investment capital, which are then available to redeploy in other important areas.

Additional Value-Added Benefits You Should Expect
From start to finish, carefully selected teleservices agencies possess the tools and resources to enhance outbound sales programs. By providing services to many different clients, a teleservices agency gathers a unique knowledge of outbound campaigns and marketing tactics or geographic issues to consider. Departmental managers also act as consultants, offering ongoing, insightful advice.

Through outsourcing, your company can win access to unique outbound expertise as well as the possibility of additional integrated call center solutions. Some teleservices providers offer a wide range of services, for example, both inbound and outbound services, fulfillment, list modeling, database analysis, credit card processing, cashiering or Internet transaction services. Access to these capabilities is a convenient method to expand into new customer acquisition arenas.
Business value has become more important than cost reduction as a major reason to outsource. Outsourcing outbound sales is now a strategic tool for many corporations.

General Recommendations
Although a multitude of benefits associated with outsourcing outbound sales have been exposed in the above paragraphs, it is critical to remember that outsourcing does not always resemble perfection. In the outsourcing process, it is necessary to follow a few key steps in order to achieve the best results.

The main challenge with outsourcing lies in bringing two cultures together. It is therefore essential to carefully and thoroughly assess your future partner in all aspects of a business relationship. It is critical to select a service agency that understands your objectives and the vision for your business in order to build a mutually beneficial relationship. The major step to selecting the right partner for a company's unique needs is to identify your particular priorities for outsourcing, whether it is reduced cost, easier management, or any other objective. Vendors cannot meet objectives unless they clearly know them.

Additionally, once the right partner and the right application have been identified, other issues may occur over the phase of outsourcing, including data control, performance or management issues, etc. It is important for a company's senior management to be involved in the activities of the service agency in order to identify issues early in a program and resolve them through communication and clear goal setting.

Source: http://www.tmcnet.com/articles/ccsmag/1098/prodline.htm

Friday, August 20, 2004

Outsourcing: Gaining the competitive edge

In today's rapidly changing, highly competitive market, organizations are seeking new ways to cut costs, maximize use of resources and focus their energy on overall improvement. One way that many organizations have found to help achieve this is to take advantage of the wide variety of services available, by outsourcing many of the traditional internal service departments. This article takes a close look at the issues of outsourcing IT services, with a particular emphasis on the implications of using an external supplier for technical software development.

Why outsource at all?
In many large organizations IT is run as an operations utility several hundred IT staff. Their role is to run data centres, supply managers and scientists with the processing power required, develop bespoke applications, recommend and install "off the shelf" systems and provide help desk support. Outsourcing routine tasks to a partner allows staff to become involved in activities that create real value for the organization. The advantages in budgetary terms are the ability to turn "fixed" costs into variable costs, since staff are only on site when their services are required, combined with the ability to plan budgets more effectively as rates are fixed.

By negotiating a framework agreement with a supplier which defines the main issues of importance to the organization (e.g. performance issues, quality etc.) it is simply necessary to negotiate the scope and targets for each individual contract. The need to issue an invitation to tender for each project is removed. Thus, the need to spend time seeking suppliers with relevant skills, reading numerous proposals, meeting countless suppliers and evaluating benefits for each contract is removed.

In an ideal partnership both parties benefit from a well negotiated outsourcing arrangement. The purchaser receives a faster response to requests for support and gains access to new ideas, methods and technologies enabling the provision of an improved service to internal customers. The partnership promotes an understanding of company style and culture which means that the supplier is easier to manage than a group of ad hoc contractors. Long term, the supplier's recruitment policy can reflect the needs of the purchaser.

Why separate software development?
One of the main concerns expressed at organizations which have taken the step to outsource is that they will not be dealing with suppliers who fully understand their requirements. This is particularly true for technical software development. To ensure that the diverse projects run by scientists and engineers are carried out using the most appropriate technology and by people who can understand and work closely with technical staff it is imperative to keep this area of outsourcing separate from the provision of general IT services. No one supplier can possibly excel in all IT areas. Finding specialist companies for each business sector allows you to take advantage of their innovative approach and experience. The multi-supplier approach also ensures that you are not limited by the quality of a single supplier's skills and technologies. Scientists and engineers requiring software have more confidence in suppliers who can demonstrate a real understanding of their needs, and with a track record of similar projects.

Possible pitfalls
Signing long term contracts or tying in to one supplier can make an organization vulnerable to escalating fees, inflexible services and inappropriate skills. Alternatively, if outsourcing is carried out in an ad hoc fashion then the project managers simply move from doing the work to managing a group of uncoordinated suppliers. Any solution should ensure that suppliers have the incentive to work together to provide a seamless service, resolving inter-contract problems themselves.

If outsourcing is carried out in a rational way, using suppliers specializing in each of the services to be outsourced, if these selected suppliers provide a seamless service to the organization and if the organization reviews its needs on a regular basis, then you have a recipe for a partnership that will give you greater job satisfaction and help increase efficiency.

Source: http://www.tessella.com/literature/Articles/TessArchive/outsourcing.htm

Wednesday, August 11, 2004

CRM Outsourcing
There are many factors to consider when outsourcing a project. Contrary to current popular belief, the decision is very rarely made due to cost. Actually, cost is usually about the same. In many circumstances, key customer information is an asset not considered acceptable for outsourcing. Many companies have complex integrations which are too difficult to manage between outsourced and internal projects. Business who's CRM implementation is tightly integrated into backend services find it almost impossible to outsource due to multiple integration points and methods. I have found that because of a continuous evolution of learning and changes as a CRM product is used, outsourcing is a bad idea. Much more can be accomplished with an internal staff able to quickly adapt and change as business needs dictate.
For some companies outsourcing is the only solution. Few companies actually have the expertise necessary to complete many of the complex tasks necessary in a CRM implementation. Staff size and their capabilities are high on the list of reasons to outsource. For some CRM is an add-on rather then an integral part of current internal systems.
As you can see there are good arguments on both sides why a company may or may not outsource part of, or an entire CRM project. I think these decisions will continue to be made on a case by case basis.

Sunday, August 08, 2004

The Roadmap to Outsourcing
Creating a Roadmap
Today outsourcing of some type of business element should be on the roadmap to mortgage lending success. For example, the goal of reducing the cost of doing business across the mortgage banking enterprise may bring in representatives from the finance department, human resources, secondary marketing, servicing, operations and sales. Choosing between centralized and outsource tasks is an alignment issue for the entire team and its culture. Without matching business requirements or direction between the teams, there is no way to reach the organization's preferred business destination. Is it loan quality, new loan market share, customer retention or the need to speed up loans to market that is the driving force on the roadmap to success? The pressure may be in any one or a combination of these areas. Once determined, finding ways to outsource for optimum efficient cost reduction becomes more effective and much more embraced by the organization as a whole.
The Art of Building Small
Outsourcing tasks or outsourcing entire departments is not just for the large, rich and famous anymore, but also the astute business owner who plans to upsize the organization. For example, mortgage brokers who are at the threshold of full blown mortgage banker status have two basic choices:
1) Build the infrastructure like our grandfather did with all the departments fully staffed, needed equipment purchased with the costs of floor space to hold it all, and lest we forget, hiring executive talent with the appropriate mortgage expertise to execute and manage the plan. All this effort while trying to keep the core business of quality loan origination vibrant and growing.

2) Outsource as many of the necessary functions to obtain optimum expertise, control physical costs, defray management salaries and the expense of hundreds of excess people on payroll, thus opening up huge chucks of time and money to devote to the core business of quality loan origination volume.
Trends in Outsourcing
Technology
Technological requirements can be outsourced from the very simple contracting with a technology firm for repair of hardware or network maintenance to the more complex agreement with an ASP (Application Service Provider) that manages software issues for multi-site users. In this case, the data resides outside of the boundaries of the mortgage enterprise thus eliminating branch office VPN connections, saving dollars in technology labor to maintain networks and infrastructure, and cutting related travel costs. Loan officers, processors, and managers use laptops and desk computers to access their live data from anywhere at any time. Scottie Sharpe, President of Rosenvick, Inc. that produce AspireGold—an ASP that brings connectivity of loan processing systems like Point together with Goldmine—says, "Using outsourced technology like ours, not only can you open up a branch office in hours, but you will probably enjoy huge cost savings and reduction of administrative headaches due to reduced distributed hardware and software." In this type of outsourcing, mortgage lenders must choose wisely since their business intelligence will be Web optimized for ease of delivery, and issues such as security and scalability become extremely important.
Human Capital Management
Employees are one of the most expensive items on the general ledger so out- tasking in the human resources area can save huge dollars without skimping on the required outcomes. Such things as background investigations, reference checking, or security badging can be outsourced on an as needed basis. 401k plans and the service providers are easily outsourced and are usually much better at handling complex investment questions from current and former employees. Outsourcing the entire 401k plan administration also keeps the ERISA guidelines met and the IRS 5500 filed on time. Human Resource outsourcing can be expanded to include functions of payroll, including tax deposits, quarterly reports, and benefits administration. A quality human resource provider offers employee orientation, training, and counseling.
Loan Quality Control
The GSE requirement to have audit teams separate from production employees makes the QC area prime for outsourcing of the complete department. The outsourcer does the entire job from file selection to re-underwriting, legal review, and fraud assessment. The mortgage banker can share the outsourcer's QC reports with its warehouse bankers, investors and employees to gain full advantage of the outsourcing cost. Outsourcing of the quality control department is not only used to defray costs but as stated above it is a way of buying the crucial knowledge so essential to becoming and staying a superior mortgage banker.
Servicing Area
Complete outsourcing of the entire servicing function is a tried and true method via subservicers that have the infrastructure to handle thousand and thousands of loans. Servicing in this manner not only keeps costs down but keeps the details of regulations, payoffs and lien releases in check. Out-tasking in the servicing area is more of a trend today as the need for assignment processing and payment collection saves time and money for the servicing organization.
Sales Area
Marketing newsletter creation and mailing is easily outsourced, taking a significant burden from the sales team, while keeping the momentum of referrals in balance. After the sale follow-up mailers are also easily outsourced with the simplicity of a choreographed calendar. Outsourcers provide many types of marketing styles from which to choose and in some cases will allow only one origination company to use a marketing idea per certain geographical locations. Outsourcing doesn't mean losing company identity or creativeness.

Tuesday, August 03, 2004

When should an organization consider outsourcing a system selection project?

It makes sense to seek help with system selection when:

1. The organization lacks the time and/or technical expertise to evaluate vendors.
2. The organization wants to draw on the experience of someone who has matched similar organizations with systems in the past and already knows what's available.
3. The organization needs help choosing between competing options.
4. The organization needs impartial help in evaluating and prioritizing its needs.
5. The organization lacks experience with other systems or ways of working.
6. The organization wants guidance that is free from office politics.

What should be included in an outsourcing project?

A system selection project can include any or all of the following:

1. interviewing key staff, board members, and volunteers to understand long-term goals and daily operating needs

2. identifying and prioritizing mandatory and optional features

3.creating a qualified vendor list

4. assembling a request for proposals (RFP) and evaluating responses

5. identifying technical infrastructure requirements

6. specifying integration requirements

7. developing scripted scenarios so all vendors show comparable features; for instance, when comparing fundraising databases, each vendor might be required to create two donor records, merge them and add some joint gifts, then separate them and show the effect on the gift records
8. identifying required resources, including budgets, staffing, policies, procedures, and training

Who from your organization should be involved in the project?

Begin by appointing a respected, neutral staff member to oversee the project and serve as liaison to the consultant. The liaison could be a knowledgeable staff member who does not have a vested interest in any particular outcome. The liaison should have sufficient stature to make recommendations to senior management. The liaison does not need to have a technical background. However, it's critical that this person be given the time to oversee the project (which may require shifting duties temporarily), and have a personal interest in seeing the project through.

Next, convene a selection committee representing each of the major groups that would enter data or receive reports from the system, such as fundraising, membership, marketing, finance, client intake, and information technology. When you hold software demonstrations, invite all interested staff and volunteers. They should be given an opportunity to provide comments to the selection committee, preferably in writing. The selection committee's job will be to evaluate the demos, check references, compare costs, and make a recommendation to management. The internal liaison should oversee the decision-making process, though the consultant may facilitate the process. Under no circumstances should the consultant make the final decision -- the organization must control this.

Expertise required from a outsourcing partner:
1.experience helping comparable organizations solve similar problems

2.objectivity and communication skills

3. experience assessing business processes, database requirements, and organizational effectiveness
4. experience turning business needs into scenarios for software demos

5. experience working with committees and facilitating group decision-making
experience with a variety of database solutions

Benefits of outsourcing a system selection project:

1. getting it done: organizations are frequently not able to allocate the necessary time, or they lack the skills to manage the project and compare options

2. creating a sense of urgency: paying a consultant tends to make the project a priority for everyone, particularly senior management

3. getting access to expertise that the organization lacks

4. having an objective facilitator run the project

5. getting an unbiased assessment of the strengths and weaknesses of the systems under consideration and how well they'll meet the organization's needs .

Source:http://www.techsoup.org
When should an organization consider outsourcing a system selection project?

It makes sense to seek help with system selection when:

1. The organization lacks the time and/or technical expertise to evaluate vendors.
2. The organization wants to draw on the experience of someone who has matched similar organizations with systems in the past and already knows what's available.
3. The organization needs help choosing between competing options.
4. The organization needs impartial help in evaluating and prioritizing its needs.
5. The organization lacks experience with other systems or ways of working.
6. The organization wants guidance that is free from office politics.

What should be included in an outsourcing project?

A system selection project can include any or all of the following:

1. interviewing key staff, board members, and volunteers to understand long-term goals and daily operating needs

2. identifying and prioritizing mandatory and optional features

3.creating a qualified vendor list

4. assembling a request for proposals (RFP) and evaluating responses

5. identifying technical infrastructure requirements

6. specifying integration requirements

7. developing scripted scenarios so all vendors show comparable features; for instance, when comparing fundraising databases, each vendor might be required to create two donor records, merge them and add some joint gifts, then separate them and show the effect on the gift records
8. identifying required resources, including budgets, staffing, policies, procedures, and training

Who from your organization should be involved in the project?

Begin by appointing a respected, neutral staff member to oversee the project and serve as liaison to the consultant. The liaison could be a knowledgeable staff member who does not have a vested interest in any particular outcome. The liaison should have sufficient stature to make recommendations to senior management. The liaison does not need to have a technical background. However, it's critical that this person be given the time to oversee the project (which may require shifting duties temporarily), and have a personal interest in seeing the project through.

Next, convene a selection committee representing each of the major groups that would enter data or receive reports from the system, such as fundraising, membership, marketing, finance, client intake, and information technology. When you hold software demonstrations, invite all interested staff and volunteers. They should be given an opportunity to provide comments to the selection committee, preferably in writing. The selection committee's job will be to evaluate the demos, check references, compare costs, and make a recommendation to management. The internal liaison should oversee the decision-making process, though the consultant may facilitate the process. Under no circumstances should the consultant make the final decision -- the organization must control this.

Expertise required from a outsourcing partner:
1.experience helping comparable organizations solve similar problems

2.objectivity and communication skills

3. experience assessing business processes, database requirements, and organizational effectiveness
4. experience turning business needs into scenarios for software demos

5. experience working with committees and facilitating group decision-making
experience with a variety of database solutions

Benefits of outsourcing a system selection project:

1. getting it done: organizations are frequently not able to allocate the necessary time, or they lack the skills to manage the project and compare options

2. creating a sense of urgency: paying a consultant tends to make the project a priority for everyone, particularly senior management

3. getting access to expertise that the organization lacks

4. having an objective facilitator run the project

5. getting an unbiased assessment of the strengths and weaknesses of the systems under consideration and how well they'll meet the organization's needs .

Source:http://www.techsoup.org

Sunday, August 01, 2004

Offshore outsourcing : a situation analysis.


It is extremely difficult to argue against cost reduction, especially in the face of shrinking budgets and increasing work. Managers have been told to go out and “learn” more about Offshore Outsourcing. But before you embark on this “journey” it is important to sit back and consider:

* How will Offshore Outsourcing fit with your business strategy?
* How will Offshore Outsourcing fit with your organizational strategy?


In essence a situation analysis is important to address these questions.

Step back and look at where you are today. What is working for you, and if it is working how well is it working? What is it that is not working? Most important, how do you work? Who defines work, who sanctions it, who “consumes” it? What are the internal and external interfaces? How do you respond to User requests? How do you prioritize work? Do you follow any standards? Do you have any formal processes in place?

Next, look at the business imperatives for change. Look at all your short term and long term goals that need to be achieved. What is it that you can meet with your budgets, what is it that cannot be met? What skills are lacking?

What are the business objectives?

* Cost reduction – if so what are the goals?
* Staff Reduction – If so which functions and how would this be staged?
* Growth – If so what skills would be needed?
* Customer Satisfaction – If so do you have any established measures for this?
* Time to market – What are the ramp-up requirements and what are the skills needed? What training is essentially required?

Full or partial outsourcing may be an answer to meet these business objectives. If so, identify what functions or development needs to be outsourced. How would this affect any ongoing development or new developments? How do you currently work these tasks that are proposed to be outsourced? How would your work change once you outsource? How would this adapt to any changes in business or user needs? How quickly would you like the change to take place in the service offering?

Do you have any processes that would get affected (very likely) with the decision to outsource? How would they look like when you outsource? How would the interfaces change? How valuable is the work that is being outsourced for the organization and the function? Does the work require extensive user interaction or is it self manageable? Can you support a remote team even if internal skills may be found wanting? Would it be appropriate to relinquish control? If so how much control can be relinquished?

Finally, what are the long term objectives of this decision? How long would you consider outsourcing? Would you, at some stage, like to own a low cost remote development center? How would this fit into your business or organizational strategy?

Such an analysis could change your approach to Outsourcing and you may create an entirely new “Outsourcing and Governance” organization that works to meet both short term and long term objectives for the company. In our experience the “Outsourcing Office” and the “Chief Outsourcing Officer” are critical to success in any Offshore Outsourcing initiative.
A long term strategy will determine an appropriate business model. The next section explains some approaches to Offshore Outsourcing.

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