If high costs and looming technology deployment hassles, coupled with economic uncertainties, are making you reconsider deploying a customer relationship management (CRM) strategy, consider partnering with outsourcers.

Among such outsourcers are application service providers (ASPs), which host and manage, from a remote server, your CRM apps as a rented service. ASPs are often, but not always, third-party technology companies. Many developers of customer premise-based CRM solutions, such as Siebel (San Mateo, CA), also offer hosting.

You can contract for live-agent voice and on-line CRM with service bureaus, which have their own call centers. Many leading bureaus also offer ASP services with live-agent services.

There are three reasons for considering outsourcing your CRM software or customer service/sales.

The first is speed to market. The simplest outsourced CRM applications and customer service programs can be up and running in as few as 30 days, compared with months, if not years, for in-house deployment.

Second is flexibility. Outsourcing gives you greater flexibility to handle peaks and valleys and expand or pull back your programs and services. This latitude has become extremely important in today's uncertain economy. You're not stuck with costly hardware, software, facilities and people you no longer need.

Outsourcers usually have more flexibility to hire and fire staff than you do internally. They are not constrained by union rules and internal corporate cultural misgivings about using temps and laying off people. And if you have to close your call centers and give pink slips to the employees, padlocking the doors and taking the public heat is the outsourcer's problem, not yours.

Last is cost savings. You avoid building out call centers and hiring temps to handle demand peaks. Instead, you size your call centers to accommodate a small, busy elite core of highly qualified agents.

You also avoid much, but not all, of the hassles that attend buying, sourcing, installing, maintaining and upgrading of people, processes and technologies.

Outsourcers often have longstanding relationships with technology and staffing vendors that enable them to get equipment and services at lower prices than you can. They also have IT staff whose core competency is supporting CRM and other customer management technology.

In its paper, "The Evolving CRM-ASP Model," published in March 2001, the Aberdeen Group (Boston, MA; www.aberdeen.com) calculates that a company could save, in a 30-user sales force automation CRM application, 44% in total cost of ownership in the first year, dropping to 13% in subsequent years, by outsourcing it to an ASP than compared with buying software licenses, installing and supporting them. Even with renting ASP services there are substantial customization and implementation costs, which are marginally higher than buying licenses.

Service bureaus are adept at finding low-cost locations with available, inexpensive labor. They can also pay less than name-brand, in-house call centers. ASPs and service bureaus alike offer programs where multiple clients can share platforms, agents and call centers. They thereby secure greater savings, albeit with reduced customization.

Outsourcing caveats

There are several caveats to outsourcing your CRM. The principal concern is control.

You depend on outsourcers to obtain, integrate and support the technology from their premises; to link with your operations; and to recruit, train and supervise staff in their call centers.

Also, when you outsource, you trust perhaps your most precious asset - your customer data - to an outside firm. Some companies fear that third parties, including competitors or hackers, might more easily access such data through the outsourcer. But Denis Pombriant, Aberdeen Group research director, reports that many companies are convinced that outsourcers have satisfactorily dealt with the issue of data security.

A second concern is commitment. While service bureaus dedicate agents (and often entire call center staffs) to clients, those agents' first loyalty is to the outsourcer, not you.

An emerging CRM outsourcing model is to have service bureaus handle basic sales from lower-ranked customers, lead generation/qualification and first-level support. In-house call centers then take care of more sophisticated sales, higher-ranked customers, leads and upper-level support.

The bureaus thereby manage the costly, variable-volume contacts that seek basic information and service. Meanwhile, much of the control, data and key expertise stays in-house.

Outsourcing Vendors

There is no shortage of outsourcing vendors. New firms continue to enter the market while existing companies expand and further develop their offerings.

One example of a new and innovative ASP is Helix, recently launched by CRM consultancy Alorica (Chino, CA). Helix covers every customer interaction, from sales and service to fulfillment, including customer data analysis, logistics support, sales management and administration.

EDS (Plano, TX) recently became a CRM ASP as well as a CRM service bureau. It now offers E.piphany's E.5 CRM software at its call centers, as an ASP and as a reseller. It is incorporating E.piphany's products into its integrated CRM service offerings.

CRM-capable service bureaus are based, or have their principal operations, in Canada, Jamaica, India and the Philippines. These service bureaus can typically hire quality, college-educated agents at lower cost than their counterparts in the US.

One outsourcer in a low-cost locale can, for example, handle e-mail responses; a second outsourcer or in-house call center can make and take calls in the US and Canada.

This gets around the cultural and accent issues that may annoy US customers when talking to overseas agents. E-mail involves fewer nuances than do phone conversations. Also, e-mails can be screened for differences prior to transmission.

As long as the interactions are recorded accurately on the same contact management system, you will still have CRM. Your customers will not care who is serving them as long as they get efficient, effective and timely service.

Among these outsourcers is OverC (Cincinnati, OH), launched earlier this year by hardware and CRM software vendor Cincom. OverC partners with 23 Indian call centers whose quality and performance it has assessed.

OverC provided training, services, business methods and proprietary technology where necessary to bring these centers, which provide a total of 8,000 seats, to US standards. OverC then tied them into its infrastructure.

The cost savings permit OverC to train up to 25% more agents than the number contractually required by clients. This overstaff allows you to adjust the number of outbound or inbound calls without disruption to ongoing programs.

If high costs and looming technology deployment hassles, coupled with economic uncertainties, are making you reconsider deploying a customer relationship management (CRM) strategy, consider partnering with outsourcers.

Among such outsourcers are application service providers (ASPs), which host and manage, from a remote server, your CRM apps as a rented service. ASPs are often, but not always, third-party technology companies. Many developers of customer premise-based CRM solutions, such as Siebel (San Mateo, CA), also offer hosting.

You can contract for live-agent voice and on-line CRM with service bureaus, which have their own call centers. Many leading bureaus also offer ASP services with live-agent services.

There are three reasons for considering outsourcing your CRM software or customer service/sales.

The first is speed to market. The simplest outsourced CRM applications and customer service programs can be up and running in as few as 30 days, compared with months, if not years, for in-house deployment.

Second is flexibility. Outsourcing gives you greater flexibility to handle peaks and valleys and expand or pull back your programs and services. This latitude has become extremely important in today's uncertain economy. You're not stuck with costly hardware, software, facilities and people you no longer need.

Outsourcers usually have more flexibility to hire and fire staff than you do internally. They are not constrained by union rules and internal corporate cultural misgivings about using temps and laying off people. And if you have to close your call centers and give pink slips to the employees, padlocking the doors and taking the public heat is the outsourcer's problem, not yours.

Last is cost savings. You avoid building out call centers and hiring temps to handle demand peaks. Instead, you size your call centers to accommodate a small, busy elite core of highly qualified agents.

You also avoid much, but not all, of the hassles that attend buying, sourcing, installing, maintaining and upgrading of people, processes and technologies.

Outsourcers often have longstanding relationships with technology and staffing vendors that enable them to get equipment and services at lower prices than you can. They also have IT staff whose core competency is supporting CRM and other customer management technology.

In its paper, "The Evolving CRM-ASP Model," published in March 2001, the Aberdeen Group (Boston, MA; www.aberdeen.com) calculates that a company could save, in a 30-user sales force automation CRM application, 44% in total cost of ownership in the first year, dropping to 13% in subsequent years, by outsourcing it to an ASP than compared with buying software licenses, installing and supporting them. Even with renting ASP services there are substantial customization and implementation costs, which are marginally higher than buying licenses.

Service bureaus are adept at finding low-cost locations with available, inexpensive labor. They can also pay less than name-brand, in-house call centers. ASPs and service bureaus alike offer programs where multiple clients can share platforms, agents and call centers. They thereby secure greater savings, albeit with reduced customization.

Outsourcing caveats

There are several caveats to outsourcing your CRM. The principal concern is control.

You depend on outsourcers to obtain, integrate and support the technology from their premises; to link with your operations; and to recruit, train and supervise staff in their call centers.

Also, when you outsource, you trust perhaps your most precious asset - your customer data - to an outside firm. Some companies fear that third parties, including competitors or hackers, might more easily access such data through the outsourcer. But Denis Pombriant, Aberdeen Group research director, reports that many companies are convinced that outsourcers have satisfactorily dealt with the issue of data security.

A second concern is commitment. While service bureaus dedicate agents (and often entire call center staffs) to clients, those agents' first loyalty is to the outsourcer, not you.

An emerging CRM outsourcing model is to have service bureaus handle basic sales from lower-ranked customers, lead generation/qualification and first-level support. In-house call centers then take care of more sophisticated sales, higher-ranked customers, leads and upper-level support.

The bureaus thereby manage the costly, variable-volume contacts that seek basic information and service. Meanwhile, much of the control, data and key expertise stays in-house.

Outsourcing Vendors

There is no shortage of outsourcing vendors. New firms continue to enter the market while existing companies expand and further develop their offerings.

One example of a new and innovative ASP is Helix, recently launched by CRM consultancy Alorica (Chino, CA). Helix covers every customer interaction, from sales and service to fulfillment, including customer data analysis, logistics support, sales management and administration.

EDS (Plano, TX) recently became a CRM ASP as well as a CRM service bureau. It now offers E.piphany's E.5 CRM software at its call centers, as an ASP and as a reseller. It is incorporating E.piphany's products into its integrated CRM service offerings.

CRM-capable service bureaus are based, or have their principal operations, in Canada, Jamaica, India and the Philippines. These service bureaus can typically hire quality, college-educated agents at lower cost than their counterparts in the US.

One outsourcer in a low-cost locale can, for example, handle e-mail responses; a second outsourcer or in-house call center can make and take calls in the US and Canada.

This gets around the cultural and accent issues that may annoy US customers when talking to overseas agents. E-mail involves fewer nuances than do phone conversations. Also, e-mails can be screened for differences prior to transmission.

As long as the interactions are recorded accurately on the same contact management system, you will still have CRM. Your customers will not care who is serving them as long as they get efficient, effective and timely service.

Among these outsourcers is OverC (Cincinnati, OH), launched earlier this year by hardware and CRM software vendor Cincom. OverC partners with 23 Indian call centers whose quality and performance it has assessed.

OverC provided training, services, business methods and proprietary technology where necessary to bring these centers, which provide a total of 8,000 seats, to US standards. OverC then tied them into its infrastructure.

The cost savings permit OverC to train up to 25% more agents than the number contractually required by clients. This overstaff allows you to adjust the number of outbound or inbound calls without disruption to ongoing programs.