Outsourcing has been a viable and important element of the delivery of financial services and products for 50 years. The extent of services outsourced has fluctuated from office cleaning all the way through to technology development and customer management. Banks in Australia are reliant on some elements of their service being delivered by others. There is, however, an equally long history of executive frustration and poor customer experience through the outsourcing of services.

The need to match the variability of the environments we operate in with our cost base is a challenge that remains, but is always changing. This variability can be known and planned for — such as when we see seasonality in demand based on time of year — or unplanned — such as events that are driven by the macro environment, like COVID-19, and are outside our control. Irrespective of the cause for the variability, chief operating officers and chief financial officers are very conscious of the need for their business to be able to expand and contract. This means having the ability to build commercial structures that complement their business dynamics.

Creating a true partnership between an outsourcer and a client isn’t easy. Surveys have suggested that as high as 70 per cent of relationships can fail (Overby 2017). Reasons cited for such failures include the conflict of interest between expecting scopes of work to be executed more cost-effectively, and the outsourcer trying to make a profit. In addition, the COVID-19 pandemic has highlighted the fragility of the relationships in an uncertain macro environment.

So, given the rapidly changing world, how do businesses ensure the interests of customers are put first and the outsource partners in their service chain are acting as trusted extensions of their brand and creating value?

Creating alignment between all parties with mutually beneficial outcomes is one answer. Anchor this with meeting customer expectations and structure it commercially to inspire performance, innovation, and investment payback.

Open communication about the goals of the business that's seeking support is the first step to achieving this alignment. There may be an initial desire to cut costs or interaction volumes, however a focus on cost or volume reduction may result in false economies that end up impacting the efficacy of customer services provided.

A simple example might be where new customer acquisition is prioritised at the expense of servicing existing customers with the same level of investment and enthusiasm. Instead, existing customers are provided with a slower service on fewer (cheaper) contact channels. This results in high churn and dissatisfaction.

The importance of designing for experiences that are easy, effective, and create emotional connection is key in not only attracting, but also retaining customers. Taking a human-centred design approach has been proven to yield a favourable outcome for both customers and the business that is provisioning services.

Datacom has found that by assessing the actions a customer is taking, and taking into account what they're thinking and feeling at each point in their experience journey, we can inform opportunities to transform that experience to be more efficient and ultimately more successful for all parties.

James Johnstone is Datacom’s head of commercial strategy for our Connect business. He is passionate about combining his experience in IT and customer service to advise on how to improve the service experience for our client’s customers.

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Financial services
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Contact centres Customer experience