Legacy customer contact centres cost UK £2 billion annually

12 November 2019 Consultancy.uk 4 min. read
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Legacy systems of working are costing customer contact centers huge amounts of money, according to a new report. The inefficient structures, which generate fewer cross-selling opportunities and provide poorer services to customers are resulting in £2 billion being flushed down the drain by UK companies.

Companies across all sectors are increasingly coming under pressure to realise the potential of technological innovations, as they look to avoid falling prey to digitally disruptive competitors. A key indicator of this sea change in innovation is the booming digital transformation consulting market, which is now worth well over $44 billion, as clients tap firms for support of their overhauls. However, recent studies have shown that in most cases, digitalisation efforts fall short of achieving top-line growth.

In large part, this is down to the legacy IT infrastructure of many organisations, which can struggle to get the most from the latest digital advances. In computing, legacy systems are old methods, technology, computer systems, or application programmes, which have become outdated but remain in use. While referencing a system as "legacy" can mean that it helped pave the way for the standards that would follow it, it ultimately implies that the system is in need of replacement to keep a company in line with those standards.

Amount UK contact centres waste annually by not adopting new business models

According to a new study from specialist consultancy NeosWave, this is best illustrated by the fact that UK businesses are wasting £2.1 billion annually as a result of failing to move to new generation models of customer contact management systems. Based on analysis of over 100 organisations with contact centre operations, the researchers found that cost wastage arising from out-dated call centre structures and insufficient integration of automated capabilities with live enquiry handling was substantial across the industrial gamut.

Unsurprisingly, Financial Services saw the largest potential loss for failing to invest in its customer contact centres. There are currently more than 2 million people working in the finance and banking industries all over the United Kingdom – or 7% of the country’s total working population. Currently, this sector accounts for 7.5% of the country’s GDP, meaning it has the most to lose of any individual sector when it comes to legacy customer services infrastructure failures.

UK retail, which is currently enduring its worst trading period in almost a decade, was the second worst offender in terms of waste generated by not adopting new business models for customer contact centres. The sector forfeits around £329 million each year as a result, placing it ahead of Telecoms at £228 million, and Government and Public Services. This is particularly surprising when considering the UK public sector has been expected to commit to efficiency savings over the last decade of austerity, but the British Government’s failure to free up funds to invest in legacy systems has eventually ended up costing it more in terms of waste.

Meanwhile, the Services Industry was found to be the fifth worst sector in terms of contact sector inefficiencies, at £206 million. According to NeosWave, this is largely due to businesses failing to move to new generation models of customer contact management – which, considering this sector hosts the consulting industry, is ironic to say the least. A plethora of consultancies have been imploring their clients to invest in upgrading their legacy systems for years now, but this evidence would suggest they are dragging their feet when it comes to taking their own advice.

Commenting on the findings, Graham Ede, Director at NeosWave, said, “In today’s world, customer contact and ‘experience management’ should be handled through a smart and seamless combination of automation and live ‘super-agents’. Contact processes and capabilities need to be built on the basis of current business strategies and commercial objectives. And these new ways of working – built from an optimum combination of technology and people, and removed from any vested interests – have to be able to deal with volatile peaks of demand, and focus highly skilled staff on more complex, problem-solving enquiries.”