80% of those who outsource to cut costs will fail

Gartner found that outsourced operations are 30% more expensive than the top quartile of in-house customer service operations. 80% of organizations that outsource their customer management operations purely to cut costs will fail to do so, while 60% of those who outsource parts of the customer-facing process will have to deal with customer defections and hidden costs that outweigh any potential savings offered by outsourcing. The worldwide market for customer service outsourcing is predicted to grow from $8.4 bln in 2004 to $12.2 bln in 2007, although the offshore element will still only account for 5% of that market by 2007.