Insurance carriers are not shy about proclaiming their talents.They know what they do well and they don't mind telling you aboutit. On the opposite end are the areas in which the carriers have,shall we say, slightly less confidence-the ones they are eagerlytrying to get out from under. And if there's one area that insurersrarely brag about, it's their call centers.

Some companies may have a good call center crew, but the successof such an operation is often tenuous. Turnover can turn a goodcrew upside down at a moment's notice. It's hard to ask for loyaltyin today's business climate when a function like customer serviceseems a hair's breadth away from being outsourced.

There, we've said it: outsourced. It can be an answer to yourcompany's biggest problems or it can be a nightmare. Whatdetermines which side it falls on is the work that goes intoselecting the right outsourcer and the ability to communicate withthat segment of your operation. Too many businesses have seen theiroutsourcing efforts fail because of the Cool Hand Luke Syndrome-afailure to communicate.

Plenty of Expectations

Many companies don't worry about the IT department connectingwith the call center because nowadays the IT department itself isoutsourced as often. With insurers wisely believing their corecompetencies are in the traditional insurance fields (underwriting,policy administration, claims, etc.), it's easy to believe thatless insurance-traditional departments are being shoppedaround.

Donna St. John, technology business development manager forDeloitte and Touche, tells companies interested in outsourcing totake a close look in the mirror before taking any steps. When acompany knows what it does best (and what it doesn't do well) itcan then make the critical decisions needed to achieve success inthe market.

Often that means outsourcing. “Actually, for many companies ITis one of the first things they want to get rid of,” St. John said.“It is the most expensive part of the company and the hardest tokeep people.” Call centers are not as expensive to operate as an ITdepartment, but they share a similar problem: turnover.

Companies have different expectations when outsourcing theircall centers. Some want to be able to tap into every facet of whatthe center is doing. Others are less concerned, wanting onlymonthly activity reports. The use of call centers has become socommon that trust is not really an issue.

“When customers are talking to your call center they don't knowif the employee works for you or someone else,” St. John said.

When researching the outsourcing option, a mistake thatcompanies often make is not being honest with their employees. Manycompanies are fearful that once word gets out that it wants tooutsource a department, the employees will flee like rats. St. Johnsaid that call center reps are often vagabonds, not worrying abouta long-term relationship. There is always another telephone to dialor e-mail to send.

St. John reminds companies that there may be a few call centeremployees they wants to retain. “You may have people leaving thatyou don't want to lose,” she said. “You should at least inform thembefore the word gets out.”

Plenty of Opportunities

The advantage that often comes with outsourcing is an upgrade ofthe technology. Companies choosing to outsource often base thedecision on how much the new technology will cost them to retainthe center. “Ninety percent of the time you are upgrading yourcurrent software package,” St. John said. “During this time you arestill getting calls at your old center, but you are slowly phasingit out. It can go anywhere from two weeks to a year.”

The bigger problem involves connecting the call center'ssoftware to the carrier. The Internet is obviously not secureenough, and not everyone has access to a T1 line. “If you canafford a little downtime, you can afford to use the Internet,” St.John said. “It's less expensive and the call center probably has aconnection.”

Installing a T1 or DS-1 line-a dedicated high-speed digitalconnection-is more costly (although prices are steadily falling,according to St. John), but it offers a direct link that keepscommunication open 24/7.

Desktop support is a major issue as well. St. John said thatthose operating off a local area network “don't usually work aswell” because switches and hubs are harder to support in a remotelocation. A wide area network, based on routers, is easier tosupport and expand as necessary.

Karen Leland, a co-founder of Sterling Consulting Group andco-author of Online Customer Service for Dummies, said care is animportant factor in selecting the right outsourcer. “They arerepresenting your business,” she said. “The customer doesn't knowor care that the person they are talking to works for anoutsourcer. You have to make sure the vendor has the same kinds ofvalues and standards of service as your company has.”

Plenty of Questions

The service provided to the call center by the IT departmentwill have a great impact on the success of an outsourcingarrangement. “The worst thing that can happen is having IT in avacuum and the outsourcer is one step removed,” Leland said. “Youhave to have a company that will allow you to work with their callcenter people. This should all be explained in the screening ofcompanies. Are they easy to work with on this issue?”

She believes it is imperative that working relationships betweenthe outsourcer and other clients be investigated. “You have todetermine the level of partnership,” she said. “How willing willthey be to customize the needs of their clients?”

Companies have to evaluate their own business practices as well.“What are the policies and procedures that have to be followed?”she asked. “Are you committed at the top to the outsourcer? Whathardware will be employed?”

The IT department's job is to ask many of those questions.Leland said the two sides have to establish training and educationlevels for the call reps. “There have to be standards in place,”she said. “You have to be able to track results.” Tracking thoseresults when the system is kept in-house means more time, effort,and management. “Companies find that it is easier to sub it outwhen they don't have that management capability,” Leland said.

But she is not sure what direction the outsourcing field will goin the coming months. What she offers is a series of questions thatneed to be answered if the call center and the IT department aregoing to be able to live together:

- Is the company outsourcing to avoid an expense or because thejob can be done better by the outsourcer?
- What is the purpose of the decision? Will it be to answer allcalls? Overruns? Technical calls?
- What are the levels of service needed between the outsourcer andthe IT department?
- Is the carrier willing to review reports to see what it can learnfrom the outsourcer?
- Is the outsourcer conveniently located?
- Is the vendor experienced in your field?

The answers to these questions will determine the correct stepsfor your company. Sending any business function to an outsidevendor can be traumatic. It can be even more difficult for a CEOwhen the realization hits that the call center rep, working forsome outside vendor, is the person charged with the important jobof keeping his customers happy.

But the trauma can be reduced if you know that the rightequipment is in place to provide these strangers with the dataneeded to make the call center reps sound like they wrote thecompany's annual report. That job belongs to IT.