Good customer service cannot be treated as a secondary option, but it has to be treated as a necessity. Every organization needs to stand out from the crowd and customer service is a great way to do that (Stengel 2012). In the globally competitive environment, the organizations are choosing to outsource for lower operational and lower costs as the main reasons. The organizations may also choose to outsource so that they can focus on core business processes and delegate time consuming processes to the external agencies (Schniederjans, Schniederjans and Schniederjans 2015). This study examines the impact of outsourcing customer service to external agencies.
The primary research question that shall be answered through this research study is:
- Should the organizations outsource customer service to external agencies?
A few secondary research questions shall be answered in this study such as:
- What are the pros and cons of outsourcing customer service?
- What are the best ways to measure outsourcing success?
Meaning of Outsourcing
According to Lacity and Willcocks (2014), outsourcing is the external acquisition of activities and is not performed in-house. It involves the transfer of planning and development of the major functions or activities to an external service or goods provider.
Drivers of Outsourcing
There are four categories identified for outsourcing- organizational, improvement, financial and cost, and revenue drivers (Varaj?o 2012).
There are three levels of outsourcing- tactical outsourcing, strategic outsourcing and transformational outsourcing. Tactical outsourcing is adopted for resolving specific issue in the organization. Strategic outsourcing helps in gaining long-term value through strategies and processes. Transformational outsourcing refers to redefining the business and building sustainable competitive advantage (Gunasekaran et al. 2015).
Potential Benefits and Risks
A few advantages of outsourcing are that it leads to swiftness and expertise and provides better quality output. The companies can concentrate on their core-processes and risks are shared. The disadvantages are that there is a risk of exposing confidential data to the third-party. There are hidden costs involved such as signing contract across international boundaries (Al-Ahmad and Al-Oqaili 2013).
With the implementation of outsourcing strategies, the organization obtains benefits such as reduction in costs and increased efficiency. Therefore, the customer base may be greatly satisfied and increase.
Figure 1: Conceptual Framework
Source: Created by Author
Research Methodology and Techniques
The research approach is divided into two groups- inductive and deductive. The research utilizes inductive approach and does not formulate hypotheses. The research questions, aims and objectives are identified to arrive at the conclusion. The route of inductive approach involves observation or tests that indicate a pattern. The identified pattern helps in formulating the theory. It also helps in creating a conceptual framework (Flick 2014).
The research design is open-ended and descriptive in nature. As the groundwork is established, this research study shall make attempts to explore and explain information about the outsourcing issues. The research design shall expand the understanding and focuses on ‘what’ and ‘why’ rather than ‘how’. The characteristics of the research describe a situation into some categorical scheme that is also known as descriptive categories (Eriksson and Kovalainen 2012).
Limitations of the Study
The research topic has a limited scope of analyzing the effects of outsourcing activities of customer services. It does not take into account the other or general outsourcing process that may extend for manufacturing, designs, innovation or any other functions for that matter. As the research design involves a descriptive method, there is a possibility for error and subjectivity (Eriksson and Kovalainen 2012).
Step 1- The topic shall be selected and developed within the parameters set for research.
Step 2- Before beginning the research, a preliminary search has to be conducted through the catalogue of books, databases and internet.
Step 3- The research problem shall be narrowed and simplified so that they can be answered.
Step 4- The research design shall be constructed for collecting and analyzing data. The data shall then be processed and interpreted.
Step 5- Evaluation shall be done and conclusion shall be provided. Necessary recommendations have to be provided (Flick 2014).
Research MethodologyData Collection Methods
The data shall be collected using primary and secondary research methods. Primary data is collected directly by the researcher. The methods to be used to collect primary data are interviews with managers and employees. It shall be qualitative in nature so that necessary interpretations can be made. Additionally, the research shall involve case study analysis and data from published academic journals as secondary data. The content of the secondary data is already collected by previous researchers for some other relevant matter which shall be used for this research study (Flick 2014).Data Analysis
The research mainly focuses on qualitative data analysis. The data shall be analysed using triangulation method in which the validation of data shall be measured through cross-verification. Multiple theories, materials and methods shall be used to answer the research problem. Content analysis shall be done for the data collected through interview or documentary analysis (Eriksson and Kovalainen 2012). However, quantitative data can be analysed by verifying the organization’s changing customer base and revenue in numeric figures due to outsourcing. This shall help in assessing the effectiveness of the outsourcing strategies applied for customer service.
Expected Research Outcomes
The expected research outcome for this research study is more likely to have benefits outweighing the risks involved. The organizations are more likely to reduce operational and labour costs due to outsourcing strategies. The revenue of business teds to increase as they would be able to focus on their core activities. Based on the literature, the findings shall be beneficial for the managers looking forward to implement outsourcing strategies. It is recommended that apart from applying cost-benefit analysis, a macro and micro-environment analysis must also be conducted before outsourcing activities across the border.
Al-Ahmad, W. and Al-Oqaili, A., 2013. Towards a unified model for successful implementation of outsourcing and reversibility of information systems. Journal of King Saud University - Computer and Information Sciences, 25(2), pp.229-240.
Eriksson, P. and Kovalainen, A., 2012. Qualitative methods in business research. Los Angeles: SAGE.
Flick, U., 2014. Introducing research methodology. New York: SAGE.
Gunasekaran, A., Irani, Z., Choy, K., Filippi, L. and Papadopoulos, T., 2015. Performance measures and metrics in outsourcing decisions: A review for research and applications. International Journal of Production Economics, 161, pp.153-166.
Lacity, M. and Willcocks, L., 2014. Business process outsourcing and dynamic innovation. Strat Outs, 7(1), pp.66-92.
Schniederjans, M., Schniederjans, A. and Schniederjans, D., 2015. Outsourcing and insourcing in an international context. Armonk, N.Y.: M.E. Sharpe.
Stengel, G., 2012. Outsourcing Customer Service May Be Penny Wise and Pound Foolish. [online] Forbes.com. Available at: < [Accessed 24 Aug. 2016].
Varaj?o,, J., 2012. Offshore outsourcing in large companies: Motivations and risks perceived. Afr. J. Bus. Manage., 6(36).