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    What Does A Modern CX Partner Look Like In The 2020s?

    This blog explores the historical evolution of outsourcing and advocates for a modern approach in customer service, introducing yoummday's output-based pricing model with remote talents. The shift challenges traditional methods, emphasizing adaptability to contemporary business demands.

    Chris Hague
    6 March 2024
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    As business strategies go, outsourcing has a very long history. Paying a company for their expertise in a specific area has been a common business activity for at least hundreds of years. What we think of today as outsourcing only really goes back a few decades though.

    ‘Facilities Management’ was coined by Electronic Data Systems (EDS) in the US in the 1960s. The company offered electronic data processing services, hardware, and expertise. They pioneered the idea of IT outsourcing before anyone used the terminology - an ongoing relationship between two companies, where one is supplying a service the other needs.

    By the late 1980s, corporate strategists and business academics had started to talk about outsourcing ‘essential, but ancillary’ services. The academics Gary Hamel and CK Prahalad wrote a Harvard Business Review (HBR) article in 1990 that defined ‘core competency.’ This is the now-accepted strategy that a business should focus on what makes it different and unique - hiring experts in IT, HR, customer service, or payroll to manage all these essential, but non-core processes.

    That’s just about it for the history lesson. The point is that if you picked up a copy of the HBR 34 years ago then the most important advice to executives was to focus their company on what it does best and to contract with a customer service specialist on an ongoing basis to handle those processes. Hire in the expertise.

    What has changed?

    Back in the 80s and 90s, if you needed customer service expertise then a management consultant would advise calling a specialist business process outsourcing (BPO) company that can manage and operate a contact center. The most common contracting model was to charge a flatrate per agent in the contact center - so if you need 300 agents in a contact center answering customer calls then the service company will charge 300 x their monthly fee on an ongoing basis. This model was easy to understand, simple, and blended the cost of the contact center, technology, phone systems and so on - everything was included in a single price.

    If a manager from 1990 jumped in a time machine and beamed forward to look at 2024 they might think that their copy of the HBR hasn’t dated at all. Recent editions of the magazine are filled with articles exploring sourcing strategies. It often looks like the advice to managers has stayed the same.

    A company that needs help managing a customer service process should find a BPO company who manages physical contact centers and then sign up to a multi-year service contract that is based on how many agents sit in the contact center.

    Is this the best we can do in 2024?

    One of the most dated ideas here is how the service company prices everything based on their input cost. The company managing the contact center is adding together the salary of the agent, the technology they need to use, the office space, the software they need, the telephony and internet systems - and some profit on top. They are just adding all these costs together and creating a price for their service based on this.

    This might sound logical. How else does a service provider calculate the value of their service? A company looking for a service provider in 2024 might ask if they are still paying the same price when the agents are idle? Or how the price-per-agent model embraces new technology such as artificial intelligence? Or how this fixed and unchanging pricing model rewards positive outcomes - such as an increase in customer satisfaction?

    Yoummday focuses on the output created from interactions with customers. We will suggest a pricing model that focuses on payment when agents (we prefer to call them talents because that’s what they are) help a customer. That’s it. There is no need to hide the cost for expensive contact centers in a blended ‘per agent’ cost because there are no contact centers.

    The talents work from home. They can be recruited from anywhere, so clients have access to a highly diverse range of people with any required skills. There is a fee whenever a talent helps a customer - it’s transparent, clear, simple, and it is focused on output… if a customer is helped then there is a fee. If the talent isn’t helping customers then the client isn’t paying anything.

    Changing the BPO charging model to focus on output and locating the talents in their own home is dramatically changing how companies source their customer service processes. Industry analysts are talking of major change in how the very concept of outsourcing works - although a quick look at the website of most customer service specialists will suggest that they are still selling contact center services just as they have been for decades.

    What does your future customer experience partner look like?

    Are you paying for agents to sit idle in an expensive contact center with a multi-year service contract your best lawyer can’t get you out of? Or, are you designing your business to be agile and able to react to anything the 2020s demand?

    The future for customer service specialists is to be flexible, to add value, and to charge fees only when customers are assisted. We need to be redefining the future of service relationships and how customers can be helped, rather than perpetuating a business model that was exciting and new several decades ago.

    Customer service outsourcing has changed. It’s no longer driven by enormous contact centers that look like aircraft hangars filled with agents working 8-hour shifts. Customers have evolved and so anyone responsible for customer service strategy must also realize that designing customer experience has also changed.

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