CRM Outsourcing Doesnt Work, Says Gartner

The Gartner Group predicts that 80 percent of organizations that outsource customer service will fail to reduce costs, while the Meta Group warns that hidden costs will blow a budget to bits.

Fact or myth: Outsourcing CRM will save your firm money. Many who are in the trenches say its clearly a myth.

Hidden costs abroad plus political uncertainties at home mean that outsourcing CRM isnt an automatic addition to the bottom line. Managing contact centers over great geographical distances is a major obstacle. The need to add layers of home-based management is another hidden cost, and one that is rarely computed in the initial project budgeting. So are subsequent travel, communication and down-time costs for managers to travel to the outsource operation sites.

A Gartner report states that outsourcers have higher attrition rates than best-in-class, in-house contact centers. Another item on the headache list is an increase in churn rates among outsourcer personnel, who often know too little about the product and company in the first place.

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