The Levels of Outsourcing

Zachary Williamson | December 21, 2011 | 1 Comment

Okay, so you’ve already decided that you want to outsource a company process, project or campaign. Now, your next step is to decide your level of engagement and here I will be talking about those different levels of outsourcing options to help guide you in the right direction or at least give you some background knowledge. Things to bring into consideration when making this decision are quality, involvement, risk and last but not least, costs. After reading this you should find the task of choosing how to outsource a lot easier. I first started outsourcing in 2005 and if I had a chance to read an article like this, I think I could have saved myself a lot of time and money.

Outsourcing Levels

Level 1: Open Your Own Offshore Facility
Level 2: Seat Lease
Level 3: Lease a “warm seat”
Level 4: Fully Managed

Level 1: Open Your Own Offshore Facility

This option provides the lowest costs but requires a greater upfront investment. One must acquire commercial real estate through lease or purchase. Build out the infrastructure which in most cases requires T1 connections and a sophisticated networking system. Filing foreign corporations and following international tax law. The upside to all of this time and money spent is that your operating cost can be as low as $5 per hour per agent. This goes for IT staff as well as telemarketing operations.

Level 2: Seat Leasing

This model probably provides the best value and flexibility but it does require for you or one of your employees to work on location at the offshore facility. With seat leasing you are literally leasing a seat or workstation, inside an already established call center of IT facility; However, you are the one to fill that seat and manage the team. With this option you pay one flat rate each month to have the office space and infrastructure provided for you as a service. The only aspects you need to worry about are the recruiting, training, management and payroll. This is a great option for those that want to scale up without taking on too much risk.

Level 3: Lease a “warm seat”

This outsourcing option is a middle of the road solution that people usually find useful when making transitions. A warm seat means even the agent is provided for you and payroll is worked into the price. This only leaves management for you to worry about. That being said, you may still want to send a manager to work on-site with your team or you can manage them remotely with emails, reports or even via Skype. Click here for a comparison between seat leasing and a warm seat.

Level 4: Fully Managed Outsourcing Solution

The title of this one is self-explanatory. Very minimal training or guidance may be required in the beginning but after the first month, your process should be on autopilot while you occasionally check the reports from time to time.

I wasn’t able to put as many details into this article as I expected so I will be coming back and filling in further details. In the meantime, if you have any questions, feel free to get a conversation started in the comments below.