In-House Vs Outsourced Call Center: Advantages and Disadvantages

In-House Vs Outsourced Call Center
Advantages and Disadvantages of In-House and Outsourced Call Center

Whether it is a service-oriented company or a product-based enterprise, customer satisfaction is a top priority for all those who want to make a mark. A prompt, accurate and professional response to customer query not only helps to retain and return a happy customer but also instils confidence in the brand. However, if the business is new or in an expansion mode, it is often difficult to provide immediate attention to customer calls, as employees are limited and have a laundry list of tasks and goals to deliver. While this becomes detrimental to the business’s image, it also results in frustration and loss of opportunity. A call center, in this scenario, works wonder to help businesses maintain and expand their customer base. As per a 2013 survey by Deloitte titled ‘2013 Global Contact Center Survey Results’1, around 77% of contact centers were planning to grow in size by 2014-15, driven by the need to improve customer interaction/service and improve business growth.

Outsourcing of call centers is a trend that is catching on fast, and the business world has acknowledged that companies that outsource are often much healthier in terms of profit and brand establishment. Additional reasons to outsource include achieving flexibility, capability to run global business operations, entering into new markets, acquiring additional skills that the business does not possess, multilingual proficiency, and more. However, to take an informed business decision regarding a call center, and whether to keep it in-house or to outsource, it is important to understand the concept, processes and risks involved with it.

Find below the advantages and disadvantages of in-house and outsourced call center:

Outsourced Call Center

This refers to a business model where resources are sought outside an organizational structure for the entire (or part of) call center functionality. In other words, it is a third-party engagement where the company outsources its call center requirement to another organization. Below are some of the pros and cons of an outsourced call center:


1. Cost-effectiveness:

One of the main reasons of outsourcing call center activities is cost benefit. As per data, businesses save up to 50% by outsourcing to offshore firms. Countries like India are preferred markets as the cost of labour and setting up a call center is relatively low.

2. Focus on Productivity:

Outsourcing the call center helps a business to concentrate on core activities such as sales, production and distribution. Non-core activities only result in additional responsibilities on the shoulders of employees, which not only hamper productivity but also loss of focus on their part.

3. Reduced Risk:

Outsourcing to a third-party BPO company implies engaging in a mutual risk sharing agreement. This provides some security to the outsourcer company and provides support in any challenging situation.

4. Trained Staff:

Outsourcing call center activities reduces the need to source a competent team or invest in its training. An expert call center outsourcing services company will have a talent pool of professionals who have the capability to understand business objectives and customer expectations and speak confidently as the voice of the brand.

5. Scalability:

When there is a spike in business volume, the size of the call center will need to be ramped up to ensure there is no interruption in customer service. Outsourcing to a leading call center service provider will enable a business to scale up its customer service requirement with ease, without additional investment in talent and technology internally.


1. Language Constraints:

Care needs to be taken to find an outsourcing partner whose language proficiency is compatible with that of the target customer segment. In case the agents are not well-trained, this could lead to miscommunication and ultimately, brand dilution.

2. Confidentiality Issues:

Businesses often have to share sensitive customer data with the outsourced firm. This at time exposes the business to high risk. Businesses thus have to regularly check that the process followed by the outsourced firm takes care of the confidential data of the customers and that data security certification standards are being followed.

3. Reduced Focus:

An external call center has many clients to be served. Thus, their focus might not entirely be on a single client or they might not show any strong loyalty towards any brand. This, at times, results in compromised quality of customer service.

4. Less Control:

Since an outsourced call center would be located in an offshore location, personal supervision becomes difficult. Identifying a partner with the right credentials, who provides transparency through technology tools and call center metrics, is paramount.

In-house Call Center

In this business model, the contact center is within the organization.


1. Personal Touch:

Most likely, an in-house call center would be dealing exclusively with a single brand, and the chances of dedicating appropriate attention to every customer may increase because of this. Agents can be trained to become trusted brand ambassadors.

2. Security:

Since there would not be any third-party involvement, risk of exposing client data is negligible. Also, customers are more confident when they think they are interacting with the direct representatives of the brand / company.

3. Flexibility:

An in-house call center is under direct supervision of the firm itself. So, in case any new business process needs to be introduced or if any announcements are to be made, these can take place with immediate effect. Also, it provides the firm the flexibility to make any amendments to their existing process without any major lag in implement time.


1. Cost:

In-house call center means taking care of every aspect of the contact center – from staff to infrastructure. A company has to bear a huge cost for all these, plus it has to have a huge contingency fund should there be any unforeseen challenges.

2. Maintenance:

Establishing a contact center is not the end of the game. Maintenance of all technology is required on an on-going basis. Periodic checks are needed to ensure that there are no technical disruptions, infrastructure is robust and staff strength is maintained. This translates into a considerable responsibility for business managers.

3. Compromised Productivity:

As stated earlier, businesses that need to execute non-core tasks often lack in-house efficiency as resources need to take additional responsibility.

4. Lack of Business Continuity:

An in-house contact center carries the risk of business interruption in case of any change in the internal or external environment. No matter the duration of this time lag, it could have a long-term impact on the quality of support delivered to customers.

The final call to opt for an in-house or outsourced call center ultimately depends on each business vision and mission. What is right for one firm might not be the case for others. Hence, the decision should be based on proper scrutiny. For an outsourced call center, a proper check for background, track record and procedures should be made, while for in-house call center, a proper feasibility check is a mandate. In either case, the key differentiator would be customer satisfaction; care should be taken to make these centers contemporary and relevant to present customer needs.


1. The Deloitte ‘2013 Global Contact Center Survey Results’ research can be downloaded here

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Last Updated on May 13, 2021


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