Why I'm Still All In on Outsourcing

Every few months, a new think piece declares the end of outsourcing.

AI will replace it.
Automation will shrink it.
In-house teams will outperform it.

I understand why people believe this. Outsourcing has earned a mixed reputation. When it's done poorly, it's visible, painful, and expensive. When it's done well, it often fades into the background.

After more than two decades building, fixing, and scaling customer support organizations, and spending the last several years deep in vendor strategy and operations, I'm still all in on outsourcing. Not because it's easy or cheap. But because, when done with discipline, it's one of the most powerful tools a company has.

Outsourcing Isn't a Shortcut. It's a Strategy.

The biggest mistake companies make is treating outsourcing as a cost-cutting tactic instead of a strategic choice.

Outsourcing works when companies are honest about why they are doing it. Most organizations don't outsource because they don't care about customer experience. They outsource because they need to make tradeoffs.

Do you want your internal teams focused on product velocity, engineering quality, go-to-market execution, and core innovation? Or do you want them focused on staffing variability, seasonal volume spikes, 24/7 coverage, and multilingual support?

Both are valid priorities. They just can't all be first.

I was at Netflix in 2010, when CX leadership decided to outsource for the first time. It wasn’t an easy call. Many people inside the company genuinely believed that Netflix culture couldn't be extended beyond its walls. But the streaming industry's growth trajectory made the trade-offs unavoidable. Leadership had to decide where internal resources would have the greatest long-term impact. With the benefit of hindsight, it's hard to argue that this was the wrong decision.

Outsourcing allows companies to scale service responsibly without over-indexing internal headcount on functions that are essential, but not core to their differentiation.

The Problem Isn't Outsourcing. It's How We Execute It.

When outsourcing fails, it's rarely because of geography or labor models. It fails for predictable reasons.

Success metrics are vague.
Ownership is unclear.
Onboarding is rushed.
Feedback loops are weak.
Vendor management is passive.

Outsourcing exposes existing operational gaps; it doesn't create them.

I've seen this play out throughout my career. At one fintech company, I inherited an outsourced program that leadership viewed as underperforming. The instinct was predictable: change the vendor, renegotiate rates.

But the issues had nothing to do with location or talent. Success metrics were inconsistent. Ownership between internal teams and the vendor was unclear. Instead of replacing the partner, we rebuilt the operating model. We clarified what good looked like. We aligned incentives. We invested in vendor leadership, not just frontline staffing. Performance improved meaningfully, without changing vendors.

Outsourcing rarely fails because of who is doing the work. It fails because of how the work is set up.

Great Outsourcing Requires Real Partnership

The strongest outsourcing relationships don't feel transactional; they feel aligned.

That alignment shows up in shared success metrics, clear ownership across teams, investment in leadership, and transparency when things are not working.

Strong vendors don't want to be order-takers. They want to be accountable partners. But partnership only works when the client shows up with clarity, rigor, and consistency.

Outsourcing does not mean less control. It's a different kind of control, one built on systems, trust, and disciplined oversight rather than proximity.

AI Makes Outsourcing More Important, Not Less

This is the part many people miss.

AI does not eliminate the need for outsourcing. It raises the bar.

As automation absorbs simpler work, the remaining interactions become more complex, emotional, and high-stakes. That demands higher skill, stronger coaching, better quality frameworks, and faster adaptation.

Vendors who can integrate AI responsibly, while still delivering human judgment and empathy, become more valuable, not less. Outsourcing gives companies access to scale and specialization at a pace that most internal teams cannot match on their own.

The future is not AI versus outsourcing. It is AI within outsourcing, guided by thoughtful strategy.

Outsourcing Done Well Is a Competitive Advantage

The companies winning with outsourcing are not chasing the lowest rate. They are investing in strong vendor selection, clear operating models, ongoing performance governance, and leadership development on both sides.

They treat outsourcing as part of their customer strategy, not an afterthought.

When done well, outsourcing improves speed to scale, reduces risk, creates flexibility, and frees internal teams to focus on what matters most.

That is not outdated, it's smart.

So Yes, I'm Still All In

Outsourcing is not going away; it's evolving.

The companies that struggle with it will keep declaring it broken. The companies that master it will quietly outperform their peers.

I've seen both sides. And I'm still all in on outsourcing done with intention, discipline, and respect for the people doing the work.

That is not a trend. It is how durable companies actually scale.

Outsourcing Is Not Broken. Your Approach Might Be.

Outsourcing is the open secret of the customer service industry. It can be done very, very well or very, very poorly. The truth is that outsourcing succeeds or fails for predictable reasons. The formula is simple, but the discipline is rare.

Here is the simple formula for outsourcing:

1) Understand why you want to outsource. This is usually because a company needs more staff than they want to hire, or because they want to focus on other skills and proficiencies within the company. Does your tech company want to focus on delivering the best software-as-a-service? Or do they want to be the best customer service company? Both are incredible company missions, but they can also compete for finite company resources. Outsourcing your customer service allows you to direct internal resources toward engineering, tech debt, and product velocity. (Every company has its own focal point. Be clear on yours.) 

H&R Block is a familiar example of seasonal outsourcing. Companies with significant annual peaks often scale through staffing agencies rather than hiring and laying off employees each year. This is the most basic example of outsourcing. 

An example of outsourcing for specific skills is offshoring for language skills. A company that wants to provide Spanish support for its customers hires customer service agents in Latin America. 

2) Ensure that what you outsource can be measured. This sounds simpler than it is, especially when a small or mid-sized company engages its first BPO (business process outsourcing) provider. How will you measure the success of a team that is not under your direct control? Key performance indicators must be clear, accurate, and tied directly to the work the BPO is performing. If you cannot measure it, you cannot manage it, and you certainly cannot outsource it.
Measurement is the backbone of successful outsourcing. Without it, everything else becomes guesswork.

3) Ship great training with the outsourced process. Well, ship training anyway. If you can’t train another team how to do the outsourced work, you don’t actually have a process. 

At one tech company where I worked, I met with a manager eager to get help for her overburdened team. She was relieved that our existing BPO had resources available to take on back-office processes that were drowning her team. “But we won’t be able to train them; they’ll have to do that themselves.” I assumed it was a bandwidth issue and asked for the training materials. “There aren't any," she said. New hires were learning from whoever happened to be sitting next to them. It was a terrible onboarding experience and a red flag. If your process is straightforward and consistent, you can build cohesive and accurate training. If you cannot build the training, the process is not real.

4) Provide resources and knowledge articles for questions. Even the most straightforward process will require escalation or an exception. Where will agents go for answers or help? 

When I was setting up a customer service organization for a brand new streaming service with no customers yet, the instructor and I sat down with the payments team to ask questions for the billing class. The payments team was irritated that we were asking for time. Both of us had worked at Netflix, and we had seen the many ways billing could go wrong.

I remember the payments manager saying, “You’re overcomplicating this. We charge a monthly price and accept credit cards. What else do you need to know?” My instructional designer peppered him with questions as his eyes grew larger.
“If the monthly charge fails, how soon will you retry the card?”
“How many times will you retry the card?”
“When will you cut off their service?”
“Will you cut off their service?”
“Will you notify them first that you are going to?”
“Who will send that message?” “Will it be email? A text? A banner on the website?” 

“Has Marketing been involved in the email draft?”
“Has customer service leadership been informed of the volume those calls will drive?” 

“What is the message agents will provide if service has been provided because a card failed?"

The payments manager had envisioned a simple system. A card would be charged, funds would be collected, and the work would move forward. He was a talented program manager in his previous domain, yet this new territory required a different level of operational thinking.

Even the simplest processes need documentation, decision trees, and clear answers for customer service teams.

Outsourcing isn't always easy, but it can be managed well. It requires clarity, measurement, training, and accessible knowledge. When companies follow this formula, outsourcing becomes a strategic asset rather than a gamble. When they skip these steps, no one is happy with the results, and customers and agents are the first to suffer.