CRM Outsourcing: Is It Worth It?

By Team Digit Published Date
01 - Feb - 2006
| Last Updated
01 - Feb - 2006
CRM Outsourcing: Is It Worth It?
Syed Shahabuddin, Chief general manager (IT), State Bank of India

Outsourcing customer service has been to our advantage

The State Bank of India has been involved in Community Services Banking since 1973. Besides personal banking, their services range from agricultural banking to NRI services. SBI has been voted third among the most inquired  brands in  2005 by a survey conducted by

"We started outsourcing our customer relationship management (CRM) needs via a small call centre that attended to the needs of our customer service department. This has now developed into a full-fledged, inbound call centre, where all customer queries pertaining to ATMs and debit cards are attended to. Besides, we also answer banking queries such as those on facilities for loan disbursals.

"By using the services of established call centres, we benefit from their core competence"

"Why did we decide to outsource? Well, the 24x7 nature of our operations, the ease that outsourcing allows, and the availability of trained labour were a few factors that influenced our decision. Moreover, established call centres regularly update themselves and keep abreast with new CRM techniques. We found them competent, and they have the requisite expertise to handle customer queries. By using their services, we benefit from their core competence.

"I must say, in the first six months of having outsourced our customer service requirements, it has been to our advantage. Also, when we invested in outsourcing, it was done keeping in mind the future course of our CRM activities-which includes outbound services, lead generation, phone banking, as well as providing all the services we do in our physical banks today.

"Security is indeed a concern when we are outsourcing, and once we start phone banking, we will allow call centre agents to access only select data. Our screening processes are rigorous, and it starts right from when we hire call centre agents. Also, sufficient checks and balances have been built-in, so that only the need-to-know type of information is available to the call centres.

"We've made the requisite security provisions. To avoid any misuse, logging and tracing of every caller and receiver will be possible."

Using our own employees for CRM is a far better option

Girish Bapat, Vice president, marketing, LG Electronics India Ltd

"Having a dedicated in-house team to execute CRM activity helps ensure customer satisfaction"

LG Electronics' presence in India includes its consumer electronics, home appliances, and IT and telecom divisions. It is a wholly-owned subsidiary of LG Electronics, South Korea, and was established in India in January 1997. Today, the company is one of the fastest-growing consumer durable brands in the country.

"The CRM function, per se, is crucial to the consumer durable industry, which is totally sales-oriented. Companies generally invest widely in brand building and focus largely on point of sales. This does not result in recommendation sales and re-purchase.

"To have a successful long-term sales strategy, it's essential to build the concept of loyalty. Having a dedicated in-house team at an all-India level to execute all CRM activity helps ensure customer satisfaction. We have an in-house CRM department that caters to all our customer relationship management functions.

"Having our own employees-who are so familiar with our company policies and ideologies-conduct CRM activities is a far better option than outsourcing it.

"Our core CRM team is in Noida. We have a toll-free number and can be reached 24x7. Moreover, there are various points where the consumer interfaces with the brand-whether online or offline. Thus our franchisees, who are spread all over India, take up the job of calling up buyers at all the essential steps of the purchase process-including after-sales.

"Our team at Noida updates and consolidates our buyer database, including demographic profiles and preferences, with inputs from the franchisees. We have only assigned to an external agency the sorting work of our database acquired through various channels. But that's barely 10 per cent of our entire CRM function.

"Of course, an in-house setup does require the right infrastructure, back-end operations, etc. to be effective. And as to whether or not it is economically viable, we cannot state precise figures. The effectiveness can be gauged through repurchases, recommendations buyers give to others, and so on."

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