Reasons for outsourcing, what we will outsource
- To avoid congestion at the headquarter premises
- To avoid workload for human resource and finance department
- To improve quality of customer service, support
- To promote the company’s awareness by partnership
- To provide quality customer service to new markets
- Uplifting of other companies through new installations
The company will outsource the following:
- Marketing
- Customer service (support and experience)
- Survey
- Brand promotion
AXE company is looking to expand market share by venturing into new business activates and selling the company product and services in new countries. The company has projected influx in customer query regarding the introduction on 3D printing technology yet to be launched. The office space will not be conducive to hold CSEs, projected at approximately 100 new staff. The company thus decides to outsource the service rather than get it in-house. Outsourcing will draw more benefits to the company by both maintaining office physical environment, administrative and financial management. Outsourcing firms need to match quality standards of the company, thus AXE will benefit improved quality of customer support services.
Benefits of outsourcing
Outsourcing allows the headquarter operations to be done without the pressure. The company needs to focus on key roles that are the main source of income and purpose for existence. Furthermore, hosting the call center at the headquarters will necessitate the expansion of the office area, that will be additional cost to the company. Outsourcing will also ensure that the company saves cost and resources for training CSEs on the company history and line of products and services. Considering the current trend of office layouts followings the outbreak of the COVID-19 pandemic, measures are being put to ensure minimal physical interaction; thus, outsourcing the call center services will be as following the policies.
Factors that will be considered
- Price
- Experience
- Financial stability
- Review, reputation
- Technology
While picking the best vendor for the outsourcing project, the company will consider the technology that will match the company’s technological requirements. The company’s database and systems require current technological equipment to run. the vendor chosen will provide evidence of having sufficient computers, server rooms and IT personnel to manage all technological issues that may arise during operation. The vendor chosen will also have to meet financial stability, that AXE can be certain of their ability to facilitate their bills, e.g. rent, electricity, internet among another bills. We will also collect reviews and references from other companies that the chosen vendor has worked with earlier to get levels of reputations. We will consider the number of years that the selected vendor has had in the outsourcing industry.
Contingencies, risks
- There are issues that may arise amidst the contracting period
- Need to access company data and systems
- Need for better training to handle unstructured queries that customers might inquire
- Decision for either 24/7 or 18-hour customer support period
The issues highlighted are among the risks that might arise during the contracted period. Since the outsourced customer service executive (CSEs) will be offering support to customers of the AXE Company, they will need to have access to company database and information, that is vital to the customers. The company also have detailed information that need not be access by all employees, but only authorize managers and officials. Most of the questions that the customers will inquire about are expected to be prices of goods and services, duration for tasks and location, all which will be availed to the vendor. However, there might arise unstructured questions that CSEs may find difficult to respond to. Further, the company might have to decide to have a 24 hour working schedule.
How to curb the issues
- Develop dummy systems with limited access of company data
- Allocate 2 headquarter staff with main system
- Train section of the CSE to tackle unstructured queries
- Company will observe the first month to determine, 24 hours or 18 hours
- The measures will be captured in the contract forms
AXE will develop a dummy system and database that is similar to the main systems but has limited access if information and functionalities. The company will assign two staff members from the headquarters to the call center to assists CSEs tackle unstructured questions or tasks that may need the main system, that the 2 staff members will have. The two staff members will also conduct training to section of the CSEs as advised by the vendor to help them handle unstructured questions that might arise. After award of the outsourcing contract, AXE will monitor call volumes and call drivers to determine whether to operate 24/7 or 18 hours per day. The two staff members will tackle crucial matters arising from customer query, and advise CSEs on the correct turnaround time (TAT) to give to customers. The measures will be captured in the contract as clauses that will be activated should the contingencies or risks occur.
What k.p.is to look
- Total number of inbound calls received
- Total number of outbound calls
- Total number of dropped calls
- Service Level Agreement (SLA At least 90%)
- AHT (average handle time 5 minutes)
The selected vendor must be able to meet the KPIs as indicated on the contract. Since the unit cost contract type will be applied, the vendor company will have to meet the mentioned KPIs for AXE to fulfil payment. After the first one month, the company will state the minimum number of calls that need to be handled, (especially outbound). For inbound calls, the company will consider average handle time for every call, that is asset at 5 minutes, this ensures that customers are not kept for long on the line, hold procedure and duration of 30 seconds must also be maintained. The company will need check on the total number of calls dropped, either on IVR, customer dissatisfaction or CSE hanging up. The vending company will need to make follow ups by calling back customers whose calls were dropped due any of the reasons above.
k.p.is
- Total number of escalations
- Valid tickets
- Invalid tickets
- Top call drivers
- Average turnaround time (TAT)
- Total number of repeat calls
Further on the KPIs, CSEs will be required to escalate technical queries to the back office, at the headquarters or by the two staff members at the vendors premise. The queries will be escalated through tickets available in the systems and given tag lines, so that headquarter staff comprehend query promptly and act upon them. Following the unit cost contact type, evaluation will be done to ensure only valid tickets are paid during renumeration. Invalid tickets will be rejected and measures applied to the vendor company to ensure consistency of tickets. The vendor will also asses the top call drivers and share with AXE company, information that will be useful in formulating strategies to improve on service delivery. The average TAT will be 3 hours for issues that can be resolved by the two company staff at the vendor’s premise and 6 hours for those that will call for support from the AXE’s headquarters.
Single vendor approach
Having a single vendor will help AXE develop trust and offer unwavering support to help attain their customer service goal. It is easier to manage one vendor and offer the necessary support. The company will opt for a solitary provider to offer all of its call center tasks, this will be beneficial in cost and administration. Single vendor will ease the communication and increase the speed at which escalations will be resolved. Having a single vendor will also make the work of the finance department easier, as there is only one company to disburse funds to. When calculating unit cost, to estimate the amount of fund to pay to the vendor, dealing with several vendors will be hectic for the company’s finance department. Passing information from headquarters to the a single vendor is easy, as there is a single line of communication.
Unit cost contract
AXE company will employ the units cost contract type after selecting the vendor. Under this type of contract, payment is done according to unit of volumes offered by the vendor. The company will benefit from having knowledge of the number of CSEs the vendor is employing, their SLA and other productivity indexes. The company will have the capacity to request or lobby for increment of CSE numbers to match influx of calls that is anticipated from the expansion of the company. Under this contract type the vendor strives to improve their quality to meet the company’s targets and maintain their payment.
Break Down Structure for Outsourcing, Contracting Timelime
Summary
- The company needs to have accurate figures of the number of CSEs
- The company will set deliverables to the vendor
- The vending company will have to meet the organization’s deliverables
- These will be a measure of CSAT and the vendor’s overall performance
- Longer calls will question product knowledge of the CSEs (Ge et al., 2021)
- 24/7 call center with two or three shifts a day,
The company is expanding its reach and scope, it will need the actual number of CSEs at the vendors company. Three shifts will ensure CSEs have sufficient rest and rejuvenation before returning to work. Three shifts will ensure to meet zonal demands of their customers
References
Ge, L., Wang, X., & Yang, Z. (2021). The strategic choice of contract types in business process outsourcing.Business Process Management Journal, 27(5), 1569-1589. Web.
Lok, K., Opoku, A., & Baldry, D. (2018). Design of Sustainable Outsourcing Services for Facilities Management: Critical Success Factors. Sustainability, 10(7), 2292. Web.
Institute, Project Management. (2017). A guide to the project management body of knowledge (pmbok® guide), sixth edition. Web.
Lindstrom, D. L. (2014). Procurement project management success: Achieving a higher level of effectiveness. J. Ross.