Benefits and Challenges of Managed Customer Support Services

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9 min read

Whether customer service should be externalized or provided in-house is increasingly debated in companies. Over the past few years, some of the most successful international SaaS companies have provided examples of well-implemented managed technical support services.

However, there are also hidden pitfalls in externalizing this important service. In the following article, we will highlight main advantages, but also challenges of managed services and how to make use of them efficiently and without quality decrease.


Advantages of Managed Services

Scale up/down flexibility

On today's dynamic markets, finding the right talents, training them, and keeping them in the company is becoming more and more difficult. Companies in different development stages necessitate different approaches to the development and management of human capital as well as the related costs. If teams need to grow urgently, it's not always guaranteed to achieve the necessary speed and quality.

Moving in the opposite direction (scaling down) is even more difficult and can have extremely negative consequences for a company, affecting not only productivity but also reputation.

An outsourced work model enables companies to be flexible while simultaneously providing stable and reliable customer support services. In the presence of a trusted partner with the necessary capacity and established processes, it is much easier to increase the scope of service when there is a business need.

Whether the company wants to grow by adding more specialists or through expanding the scope of services, outsourcing helps to stay flexible.

Additionally, companies are able to make quick business decisions that fit dynamic markets and achieve quick results with the external support. If there is a perceived need to reduce the scope of the service, the company can quickly optimize its costs by reducing the team or the scope of the managed service.

Tip: It is of utmost importance at the time of signing the contract to pay close attention to the supplier's ability to provide flexible delivery change within reasonable timescales, but we will get to this in detail later.

Offering services in additional languages

Nowadays many products know little to no boundaries when it comes to their expansion. However - like it or not - language barriers still exist. Often, the exponential growth of the customer base cannot be met accordingly by the internal organization.

This is especially true for (technical) support in the customers' native language. Localized tech companies, for example, typically don't have access to a rich pool of talent with near-native knowledge of a variety of languages. Specialists with professional knowledge in Arabic, German, French, Spanish, Dutch, Swedish, Norwegian, Polish, etc. are very difficult to find in the local market.

When working with established pan-European suppliers of managed support services, these technology companies can rely on numerous language options.

Tip: It is important that the managed services provider has an established and developed concept with multiple hubs across key locations, which are a source of specialists who know the necessary foreign languages to assure the right resources within the timeframe.  

Extended Service Hours

It is important to be able to provide convenient opening times for the end customers by the support department. For example, if a company is based in one country but operates in another, the opening hours of the country base might not be the same as the ones of the country of operations. International companies with a large international customer base profit from managed services to scale and increase service hours according to different time zones and cultures.

Nowadays, the response time can be crucial in a customer's decision whether to abandon the product (and company) or to continue using it. Depending on the specifics of the product or service, the ability to provide live customer support 24/5 or 24/7 can affect whether a company dominates the market or loses out to the competition.

Cost effectiveness & better planning of operating expenses

One of the main reasons, companies (such as software vendors) rely on managed services providers is cost optimization. Outsourcing customer support can actually reduce service costs because:

  1. they utilize the labor market across multiple locations and countries by taking advantage of the best mix between talent and price,
  2. they streamline the internal processes and increase their efficiency,
  3. they optimize their internal software tools (economy of scale) and eliminate additional potential costs such as the use of a recruitment agency.

Cost optimization alone is not the only reason for outsourcing certain processes. The predictability of costs is of no less importance for such a decision. With a properly negotiated transaction, both parties can clearly and accurately calculate and plan the financial flow. The company can forecast the costs with full transparency in the short- and medium-term time range. This predictability is beneficial operationally and financially.

Focus on core strengths

With growth, the business complexity increases not annually, but on a quarterly basis. Companies with laser sharp focus are the ones that win the battle for customers and large investments. Relying on an external partner whose sole purpose it is to make customers happy through excellent service provides room and resources for other tasks and leaves the managed services provider with tasks that they are specialized in.  

Hiring, training, developing, and retaining the talent that performs customer support is usually a time-consuming and somewhat exhausting ongoing process. The provider has the experience and resources to establish a strong workforce while the company's management and business units can focus on strategic issues and solutions, rather than dealing with the operational work of the technical support team.

Streamlined processes, tools, know-how & escalation management

"I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times." Bruce Lee

Dedicated managed services providers with a proven track record of providing similar types of services to numerous customers have streamlined their processes near perfection. By relying on an external partner for such services, companies not only get the relevant service, but also profit from many years of experience and knowledge.

A team that specializes in very specific activities has built the necessary setup of tools and processes to carry out the activity.

  1. The managed services provider gains direct know-how of products and services from the company. 

  2. The managed services team will then work through real situations and examples to get a feel for the processes but also the company brand, language, and messages. This is also known as the "shadow phase".

  3. In the "reverse shadow phase", the company learns from the managed services provider's know-how and approach to find new ways for more efficiency and optimization.

  4. When both parties are convinced that the managed services team can take over the service 100%, an the project will "Go-Live" officially.

  5. Meanwhile, important topics such as reporting schedule, SLA, KPI, communication and escalation matrix are specified.

The detailed description of each aspect would take at least several more articles, so why not ask us directly and we happily go over your specific case and how to support you.

We'd like to hear from you

As you can see, the advantages of managed services with dedicated service teams are plenty. But as with every topic, there are challenges that companies need to be aware of, so they can fully leverage managed services without risking loss in quality and customer churn.   

Challenges of managed services

Back to overview

Lack of control

Certainly, one of the main concerns of companies when considering outsourcing services is the potential loss of control and transparency over crucial processes and customer/user interactions. This is quite self-explanatory especially in the example of customer support. More than once we have heard the following from our customers: "We trust you with the most valuable thing - the relationship with our customers".

Here's how companies can protect themselves from the associated risks:

Timely and extensive reporting

  • All key metrics should be presented and tracked in detail.
  • A specific benchmark must be specified. Every discrepancy should be analyzed.
  • After the analysis, if necessary, specific corrective measures must be taken and can be reviewed in regular intervals.
  • Over time, each key indicator should be improved, and the quality of the service should be optimized where possible.

Continuous exchange of information from the agents to the customer management

Valuable customer signals and challenges must be conveyed to the stakeholders in the company.

Less knowledge about the product or services

Another concern in outsourcing is the initial lack of knowledge of the product or service for which the managed service will be provided. However, this is manageable by implementing good practices for knowledge exchange and to improve the quality of support.

This exchange can be directly implemented into the previously suggested process for managed services:

  1. Depending on the complexity, an initial onboarding period can take from a minimum of two weeks to 2-3 months.

  2. After the initial training period, the team enters the so-called "shadow mode". The newly formed team closely monitors the work of more experienced specialists. The two teams stand side by side, albeit sometimes virtually. This period takes 2-4 weeks.

  3. After its completion, the "reverse shadow mode" phase begins. Then the roles are reversed. The newly formed team is in an active position, and more experienced people are closely watching and giving valuable advice.

  4. As the date of the official Go Live approaches, support from experienced colleagues gradually decreases.

  5. After the official Go Live, the team enters official operation mode and begins hands-on work on the project and work with end customers. Naturally, the level of knowledge of the specifics of the matter increases with the time spent in a real working environment.

From our experience, we can say that after the first two months, the team starts to achieve optimal results. Over time, the aim is to raise the bar or in other words to include and optimize the SLA and KPI of the service.

Quality of customer feedback

Being able to get first-hand feedback on the quality of a product is an integral part of any business success. Responding to the changing needs of customers can be critical to increase revenue and keep a strong market presence. It is of utmost importance to establish an optimal process for transferring information between end customers and the right stakeholders in the company.

Desired functionalities or complaints (e.g. about usability) are key aspects. In each of our projects, we establish a practice of constantly reporting on the wishes and challenges of the clients. We usually send reports at a certain period of time and talk about the voice of customers on a regular basis.

Ensuring the quality of services

Providing an exceptionally high level of service to the end users of a given product or service is the fundamental goal of any business. Given that the first line of communication with end customers is the front line of any SaaS product, wrong or inadequate support can ruin the customer experience for amazing products. 

First comes the selection of the right people for a particular job. Customer care is a people's business first. The main criteria in the selection of personnel are

  • the right technical knowledge,
  • a sense of responsibility
  • and empathy for the other party.

It is important that colleagues can work well in a team and support each other when solving more complex cases. For key management positions, we consult with our clients and settle on the right candidates together, so their personalities, working styles, and soft skills match the requirements of the company.

On-the-job training and the introduction of the right work processes are other key factors. Close review of the workflow and ongoing reporting along the chain is another important aspect. Although customer support is based on a certain set of guiding principles, each project has its own key parameters that must be followed. If any parameter differs from the target values, the team enters hyper care mode and continues until the discrepancies are resolved and the optimal values are reached again.

Managed services offer your company flexibility, stability, and expertise to scale your business, make fast decisions and keep your standards high. With the right processes and agreements in place, outsourcing can not only help your business overcome phases of change but also create new ways to support customers, expand your portfolio, and grow your market presence.

Find out, how our managed services experts at DIGITALL can support your business case. 

Strengthen Your IT

by Georgi Abadzhiev

Georgi Abadzhiev is Director CRM & ERP Managed Services at DIGITALL. He has extensive know-how and a proven track record of significantly growing revenue in the information technology and services industry. He has a degree in Economics from the Ludwig-Maximilians University of Munich.

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