The Two Secrets to Outsourcing Your CRM Functions

No one will ever do things like you do.

Whether you outsource your customer service to a local provider, a Big 3 firm, or a remote company in India it is always the same: someone can do your work for you better, cheaper or faster.  It won’t be the same, though.

Unfortunately, outsourcing decisions are done based mostly on cost.  Gartner does an outsourcing study every year and it always comes the same: people say they choose the best provider for their need, but in a separate question mention cost as the biggest driver for their decision.  Conversations also go back to Cost – always.

Cost is not always the best method to select an outsource provider.

There is a method to selecting the best outsource provider, and it has two steps:

Step 1 – Figure out what to outsource
Step 2 – Figure out why you are outsourcing

How do you figure out what to outsource? Simple.  Look at all your business functions, list them, and then mark the core and critical functions – those without which your organization will perish in short time (it may be talking to customers, or selling, or creating campaigns, or fulfilling orders, or anything else).  Once you have your core, critical functions marked make a list of the ones you did not mark or select.  That is your list of potential functions to outsource.  The other ones are to be kept in your organization. No discussion.

How how to know why you are outsourcing? Go down the list of potential  functions to outsource and mark next to each which is the problem you are trying to solve through outsourcing? Speed (too fast, too slow), Quality (do it better, do it worse), or Cost (too cheap, too expensive).  There may be some of them you are not trying to outsource (even if they are not core, critical functions) and that is fine.  After you marked them, look at the following chart and make sure you can live with the tradeoffs.

outsourcing tradeoff calculatorCan you live with the trade-off? Are you willing to sacrifice quality and speed for cost?

Are your customers ready for your trade-off?

5 thoughts on “The Two Secrets to Outsourcing Your CRM Functions”

  1. Great post & a good graphic Esteban.

    Actually, in my experience of IT outsourcing (me representing the vendor not the business), we can expect to achieve 2 at the exclusion of the remaining 1.

    Faster & Better but not Cheaper.
    Better & Cheaper but not faster.
    Faster & Cheaper but not Better.

    But you are right that it is usually how you mention it. 1 at the exclusion of other 2.
    It is only when the relationship between the business & the outsourcing vendor has matured that they can aspire to achieve the state I have described.

    Regards,
    Prem 🙂

  2. Remember the hidden variable in cost – its just not the outsourcers cost, its the company’s cost to manage the outsourcer which can be very large at times. And I know this for managing many software development projects with outsourcers. So, if you are choosing your outsourcer based just on cost, factor in all hidden management costs before comparing vendors. Sometimes inexpensive vendors are not so inexpensive when you do the math.

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