There are significant risks associated with outsourcing customer service. Historically, outsourcing has been seen as a way to reduce costs by getting others in cheaper locations, or with greater economies of scale, to own the processes that are not core to the business. However, when companies nowadays learn to approach strategically the problems can be considerably reduced and at times even eliminated.

It is no different in the case of outsourcing business model. Companies deciding or considering outsourcing must first ensure they have the relevant information to make meaningful cost/benefit analysis instead of focusing on inappropriate or immeasurable service levels and cost metrics.

To be successful, both the organization and outsourcer must understand the entire process and clearly articulate each party's entry and exit point in the case of customer service outsourcing.

There are considerable benefits to be gained from outsourcing non-core processes, but rewards will not be instant and organizations should adopt a controlled and phased approach.

Develop contracts that include pricing related to service levels and customer satisfaction or other quality metrics to measure and motivate outsourcers instead of relying on operational metrics such as number of calls handled or average call time. Correct metrics ensures you receive the required result.

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A buddy of mine writes software, working from his home. His company was outsourcing many code writing tasks, threatening to outsource his work. He contacted a few companies/writers in India, where much of the code writing is outsourced these days, found two software creators who would share his workload for far less than he makes (combined). He went to his boss, asked for no raise, but to double his workload. He outsourced three quarters of his new workload to his two Indian employees, took on code writing for two other companies, tripled his pay, and writes less than before. He now has five employees, all in India.

He outsourced his own job!