back to article O2 scoffs at call-centre outsource fears, forgets to rule it out completely

Rumours that O2 UK plans to outsource all its telephone support work have been dismissed as speculation by the mobile network operator. The cynical among us will note that's not the same as completely ruling it out. The whisperings were enough to prompt an emergency motion from the Communication Workers Union, stating that more …

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Unhappy

Race to the bottom...on your marks!

It's almost as though, having seen the drubbing that TalkTalk regularly get, the customer service blackhole that is Orange, BT's continuing monopolistic arrogance, and Vodafone's disdain for bill payers, O2 are worried that they're in danger of rising up the customer rankings (in relative terms only, of course).

So at a board meeting, the chairman announces something along the lines "Gentlemen: Despite mid-contract price hikes, we are still being left behind in the telecoms sh1tness stakes. What is the single thing most likely to worsen our customer service, and soil our reputation?" And then it doesn't take long for all assembled to come up with the common answer, "Give it to Capita". Sound idea boys - let somebody else (with a dismal reputation) manage your relationship with your customers. And if by some statistical fluke involving many standard deviations from the norm, Capita do provide a good service, you can always have a follow up move to shit the customer services offshore.

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Paris Hilton

Re: Race to the bottom...on your marks!

http://birminghamnewsroom.com/2013/04/contact-centre-lands-award/

maybe their reputation needs to change.

Paris because any deal would involve a slap up meal in a nice hotel....

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Re: Race to the bottom...on your marks!

One swallow does not make a summer (mix that with your Paris reference!).

I work for a company that operates call centres. Some are good, some are bad, and the outsourced ones are always problematic. You can get great outsourced service, but the norm seems to be unreliable service, slightly below the mean of the in house service quality. Costs are usually higher, but with greater chance to pull the plug at short notice. And you get reamed out on all unanticipated changes to the SLA.

And as with any outsource, how often are the goals of the buyer aligned with the vendor? And why would any company want to trust a third party to communicate with their customers - aren't your customer relationships the most important thing about your business?

In the case of Brumagem council, it's not like they face any threat of their callers taking their business elsewhere, so the dynamics are a bit different to O2, and arguably a basically adequate but lower cost service does count as excellent in the local government space?

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Pirate

Re: Race to the bottom...on your marks!

"One swallow does not make a summer" smirk..

The outsourcing leading to poor service is not an argument I automatically subscribe to.

The could be several reasons why an outsourcer can do it better. Say a new phone comes on the market and O2 call centres are swamped, an outsourcer may be in a better position to bring in additional staff.

An outsourcer may have invested in better telephony systems, may have more expertise at managing staff in that environment.

There may be trade off in that they are not as good service wise but bring flexibility.

I like to drive my car. Sometimes I get a train, sometimes a taxi, sometimes a boat. I think I'm a good driver but for a while through work I used the company chauffeurs to get about. They were good drivers too. their vehilces broke down less frequently than my clapped out old banger.

Yes they all generally cost more but in each case it was a price worth paying. in all cases, their aim was to make money from me and mine was to get to my destination safely.

Noddy example but its simply not as simple as saying their aims are not aligned.

pirates cos they all takes ye gold

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Facepalm

Re: Race to the bottom...on your marks!

@ Mike 102: Rubbish post - very confusing argument, not even well made.

Let's say, just hypothetically, that there are some outsourced services which are better than in-house equivalents on all measures, including customer satisfaction, cost, knowledge of staff and flexibility. What proportion of outsourced services do you think that these represent? In my experience it is a pretty low proportion. The motivation of the company employing them is simple - saving money. The motivation of the service provider is also simple - maximising their profit, generally by minimising their costs.

Where does customer satisfaction factor into all of this? After the event, if at all, and generally lost in the quibbling over what the SLA actually requires. By the time that things come to a head the employing company's reputation is trashed, the service provider have extracted as much profit as they can get away with and the bean-counters (and the lawyers) are happy but no-one else is, least of all the customers.

But every naive and gullible management team continues to believe when entering into these contracts that the Holy Grail of cost reduction at the same time as acceptable customer satisfaction really is achievable. Total idiots.

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Happy

Re: Race to the bottom...on your marks!

where as your argument is excellent and very well made..

Thanks.

"Let's say, just hypothetically, that there are some outsourced services which are better than in-house equivalents on all measures, including customer satisfaction, cost, knowledge of staff and flexibility"

I refer you back to "The outsourcing leading to poor service is not an argument I automatically subscribe to."

You ask what % respresented but not relevant to what I said. I was very specific. It may well be that 51% or more of the providers are rubbish but it's not relevant to what I said.

You generalise about customer service but in the article it states that the service provider already do work for the customer. If they are will to put more work to them then either they are, as you say, "idiots" or they are happy with the balance between cost, customer service, etc.. they may even have raised customer satisfaction and reduced costs who knows? I don't and I'm pretty sure, despite your clear expertise in this area, that you don't either

In summary you've made a blatent generalisation which doesn't add anything to the discussion and doesn't counter what I put. Marvellous, genius infact. You must be very proud.

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On the bright side

If it comes to pass, it will make contract renewal decisions just a little bit easier.

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Re: On the bright side

easier? for me, it's already a foregone conclusion it won't be O2 (terrible coverage where I live)

Only difficult decision will be which one of the other useless, incompetent bunch of half-wits I do sign up to...

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Re: On the bright side

see, 3 halfwits not 4

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This post has been deleted by its author

Didn't they dismiss the sale of Be and O2 Home Broadband to Sky as speculation at first too?

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DONT CARE ABOUT THEIR STAFF

O2 are refusing to tell their staff anything! So seems they are willing to talk to the press but not their staff. Its disgusting. They said they werent selling of the Broadband to the staff then a few months later it was sold to Sky. They are taking an absolute hit in work with furious staff but the CEO couldnt care less and refuses to answer questions on it. Disgusting!!

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Anonymous Coward

Are they mad?

Customer service is the only thing the can compete on. Their network is the worst in the UK!

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It occurs to me that any managers suggesting outsourcing are basically admitting they cannot do their job. Whilst there are some benefits in scale and reduced commitments to pensions, an outsourcing company will want to make a profit on the support, so any savings have to cover that. The reality is the quality declines, staff churn rises but the managers get a bonus for basically saying they cannot do a core part of their job, manage staff. They must be magical to manage to spin that into a positive.

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Unhappy

"so any savings have to cover that"

They generally don't. If you've got the scale to operate any process yourself, then why will an outsourcer be cheaper? As you say, they will have crappy conditions, pay and pension, but that's offset entirely by the costs of bidding and set up, risk pricing, infrastructure, net margin, and overheads (outsourcers usually have vast amounts of goodwill on their balance sheet to cover). And there's no real operational time savings - outsourcers don't offer you a new, magically more efficient process, they want to take your under-performing process and implement that with lower paid staff (hopefully with lots of "unforeseen" problems to be fixed at great cost).

In general, the outsource provider needs to charge 110 to 120% of your pre-outsource cost to cover their costs and make their target margin. But to win the work they need to be cheaper, with a rule of thumb that says "bid 20% below the existing cost base". So for a five year contract, in year one the outsource provider delivers the 20% saving, accrue a loss and add a further hangover to be recovered. By the end of year 2 they need to start getting into the black, and hopefully the client has some changes that will enable them to be fleeced. If not, then rely on the fact that the outsourcer's commercial people write contracts day in, day out, and will run rings round the buyer. Either way, the outsourcer assumes that the client will walk at year 5, and so simply reams the client out, costing on average 40% more than the inhouse cost in years 3 through 5. There was some good research on this published some years back, but it was quietly hidden when the analysts who published it realised there was far more loot to be garnered by trumpeting the "benefits" of outsourcing, rather than telling people it was doomed to fail. At year five, it the vendor is really lucky, the buyer will have forgotten the original business case, and just renew. Otherwise, chances are they will be too fearful and shamefaced to bring back in house, in which case the work stays outsourced, and the outsource sector feed off each others churn: "Rinse and repeat".

Directors are paid enough, and should know these things. Unfortunately they listen to idiot management consultants, or believe the vendor's sales pitches, ignore common sense, and do it anyway. My own employers are at the point where our IT outsource "partner" have given up trying to improve their dismal service, and are now moving firmly into "monetise the client" mode. All forseeable, unless you're paid several million euro a year, and sit in a boardroom in some ivory tower.

Obviously different rules apply where you don't have the scale or competence to do something yourself, and in those cases outsourcing can be a sensible move - although usually something better suited to SME's rather than big corporates.

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Shareholder value

I do feel sorry for the people that work for O2, but it's the nature of corporate beast; reducing cost comes before granular growth because it's easier to accomplish and shows on the end of year statements before any increase due to clever marketing or a brilliant product.

Director's bonuses are usually based on profit and removing cost is the fastest way to getting that new Range Rover (or apartment in Florence) for many boardroom 'zeebs'.

Not to mention the pressure these people get from investors (such as pension funds etc) when they issue profit forecasts.

I'm not a socialist, but let's face it, capitalism is the guilty party here.

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Re: Shareholder value

I'm not certain it is capitalism so much as a market that rewards short term gain and doesn't accept that it can be ok to level off efficency drives. Short term improvements at the expense of long term health, which many strive for now, isn't good for anybody but the investors who grab and dash and the execs who get the bonus and leave. There is a drive to always improve quarter to quarter, and improvement can be good, but there is a point when the improvement cannot come from more 'efficency' i.e. cuts, without it harming the company in the medium and long term. Sometimes that growth has to come from new products and new markets rather than outsourcing staff. People are becoming short sighted and greedy, they want their money at any cost and move on. That leaves behind carnage and isn't good for the general health of the economy.

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Anonymous Coward

Deceitful O2

Serco missed a bid to take over Glasgow Skypark recently, o2 are more than considering outsourcing, they are actively negotiating. All ground level management have now been informed of this and many fear that this will tarnish o2's reputation as a "bold, open, trusted and clear" due to sub standard customer services and misleading staff about how safe their job actually is.

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Re: Deceitful O2

I really don't think they have anything to worry about regarding damaging their reputation for being 'bold, open, trusted and clear'

Now if they were concerned about their reputation for being 'underhand shysters' that would be a different matter, although on reflection, I don't think they need to worry about that either.

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Coat

As they're owned by Telefonica, it will be outsourced...... to Spain!

Taxi for one..................

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Well unemployment has just hit about 27% out there so why not?

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FAIL

Having recently spent two hours on four separate calls to Three, DO NOT move any roles to India. Even the simplest of queries was misunderstood.

OK, so some of it is down to the aggressive scripts Three give their staff to use, but it was a NIGHTMARE. The last call was simply to get the PAC code so I could leave, something I eventually had to demand from the Manager.

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