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Course: Intro to Supply Chain & Operations Management (OPER1160)

A Firm located in Bangalore, India, has approached High Bar Communication with a proposal to outsource the online help desk function. Based on five Performance dimensions/criteria, research and other factoring reasons, I will submit my proposal on whether or not I believe High Bar should continue to in source this function, or outsource to the firm in Bangalore. There are many factors to consider, for both options can have positive effects on this organization and its mission. Both options demonstrate advantages and disadvantages associated with them.

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High Bar communications is an internet service provider who caters to individual consumers and small businesses who require a high level of service. A firm in Bangalore, India has proposed High Bar Communication with outsourcing its online help desk. All their personnel are fluent in English and have a college degree or an appropriate technical background. The online help desk exists on the internet; therefore customers should not be aware of the switch. An article written by Bradley Hecht states that increasing user demands and a lack of clear leadership within the industry are forcing IS organizations to reevaluate the role of tomorrows help desk today (3).
Technology has altered the world in the last decades. Advancements made in computers and in telecommunications allowed for an increased integration between countries throughout the world involving many organizations. Not only internal networks but also the relationship they share with their suppliers and clients. Internally, in the organizations, technology has penetrated all communications, processes, production, and finances; thus, making it possible to quickly access information from all corporate areas (7)
The objective of this project is to compare the advantages and disadvantages of in sourcing and outsourcing the online help desk. Using a weighted point-matrix, cost chart, and other research, a relative decision will be proposed.
This report will present different performance dimensions/criteria to help aid in the final decision to continue to in source the online help desk function or outsource instead. High Bar Communication already has the highest customer satisfaction and retention rates in Canada. The organization does not want to lose these achievements, especially if the possibility of outsourcing may do so.
In the conclusion, based on the five performance dimensions/criteria and other research factors, I will give my opinion on what I believe High Bar Communications should do with the proposal.

Performance Dimension 1: Cost
Below is a chart outlining the current costs by High Bar Communication with the proposal from Bangalore, India.
“Cost Chart A”: Current Online Help Desk | Bangalore Proposal | | | Personnel Costs: | Fixed Cost | | | 40 Full time equivalent (FTE) technical experts | $1,750,000 per contract year (covers all administration and IT costs) | at $50,000 per year (Salary Benefits) Total Personnel costs= $2,000,000 | | | | | | Equipment Costs: | | | | 3 Servers at $2500 each per year | | 20 PC's at $900 each year= $18,000Total Equipment costs= $25,500 | | | | | | Variable Costs: | Variable Costs: | | | $1.25 per request (office supplies, fax paper, etc) uses 850,000 requests per year | $0.85 per request | Total Variable costs= $1,062,500 | Uses 850,000 requests per year= $722,500 | | | | | | | Total costs: | Total costs: | $2,000,000 + $25,500 + $1.062,500 | $1,750,000 + $722,500 | Total= $3,088,000 | Total= $2,472,500 | | |

By comparing the costs of current versus Bangalore in “Cost Chart A” it is evident that the help desk proposal from Bangalore would be the cheapest option going forward. The cost savings over the course of one year for High Bar Communication would be to take $3,088,000 (Current High Bar Cost) and minus by $2,472,500 (Proposed Cost). A total of $615,500 would be saved over the course of a year. The costs you do not see are the ones associated with outsourcing such as periodic executive trips to the foreign site, possible temporary residency to oversee the functions, and fees for trainers if new innovations need to be implemented. The short term cost savings are very attractive with this offer; however the long term affects need to be considered. I believe cost to be near the middle/top of the weighted point evaluation matrix to keep in house and the number one reason to be outsourced (refer to in sourcing and outsourcing charts on pg.7). As we all know a dollar saved is a dollar earned. Cost can easily persuade an organization’s decision; I do believe there are four other important dimensions that should be looked at first. Listed below are the four dimensions I believe to hold merit in the decision process for relocation of the online help desk.
Performance Dimension 2: Reliability Rhonda L Hensley writes “no Matter the type of service being purchased, reliability can be defined as the firm’s ability to provide the service correctly the first time” (1). Whether it is a good vehicle, computer, or even your cell phone to operate in a remote place, reliability is what all consumers seek. The goal is to give the most reliable service possible. Being reliable is an extremely important dimension to have, especially in the customer service realm. Proving to your clients that you are reliable is one of the most fundamental aspects of customer retention. The more you prove yourself as unreliable, the more customers will be easily persuaded to switch to one of your competitors. I believe this to be in the fourth position of the weighted point matrix for in sourcing as this is something you can control from a staffing perspective (refer to in sourcing matrix on pg. 7). Being reliable is a great attribute and can add to the dynamic of a business. Outsourcing I see reliability being third on the list (refer to outsourcing matrix on pg. 7). Full trust would be placed on the firm’s personnel to deliver the best way possible. Whether it is arriving to work with a positive attitude or even in their personal ability to go above and beyond their expected duties, it would not be easy to pin point “key” employees who could contribute to long term success. Amanda L Webster wrote “Reliability is essential to employee performance, it consists of the extent to which an individual or other entity may be counted on to do what is expected of them” (9)
Performance Dimension 3: Problem Resolution Problem resolution is fundamental for the help desk to succeed. The faster a diagnosis is made, the quicker a resolution can be formed. Clients would deal with one person rather than be transferred to other company personnel. If in sourced this can be well managed by senior analysts who have vast experience. If outsourced the Bangalore firm is expected to come to a diagnosis. For example, if there was a traffic accident and a main line was disrupted to access the internet, a local online help desk employee could have information from local news on the matter, therefore being able to deliver a quick answer to the user’s problem. It could take an outsourced firm much longer to locate the problem causing doubt in the user’s mind of the firms’ ability to resolve issues. One of the best ways to promote the help desk is through word of mouth and by having exceptional processes in place. If you are consistently resolving problems in a timely manner, customers will be pleased with the service and would be more likely to promote the company to friends and family. In an article Karen Hill states, “The first advice I give my clients in terms of promoting their help desk is to put in place the appropriate level of investment. You want to ensure you've got a world class help desk that solves the end users' problems in the neighborhood of 80-90 percent of the time” (5). Era Tremblay wrote, “While a global view of IT help desk functions may show many repetitive processes, a closer view will almost certainly reveal that individual enterprises differ from each other in both substantial and insubstantial ways. Any of those differences may be important in resolving problems from a helpdesk perspective” (6). I believe this dimension holds very high merit on both sides of this case. Leaving the function in house will allow you to monitor this step very closely, implementing an employee incentive program as an effective way to reward employees who are consistently exceeding company standards (refer to in sourcing matrix on pg. 7). If outsourced, problem resolution will still have to be monitored as this could hold ultimate weight on a customer’s overall opinion of the service/product they are receiving (refer to outsourcing matrix on pg. 7).
Performance Dimension 4: Quality

Performance Dimension 5: Customer Relations (Service)
Customer relations are a major gateway in understanding what the customer wants and desires from the service they are being provided. Direct contact with the customer can help in taking the needed steps to improve the current service. First and foremost you have to strive to always do what you have promised. Make every effort to mold your relationship with the customer into an open, continuous, and cordial one. Having this function local means there is a connection between the online help desk employee and the customer searching for an answer. This could in fact help resolve the issue faster if it is not a connection issue that the customer is experiencing. Understanding the wants and needs of your clients is extremely important, especially one that is service driven such as ISP. I believe this to weigh heavily on the overall decision to keep in house, so much so that I believe it to be the number one reason to do so (refer to in sourcing matrix on pg. 7). To outsource is taking a key part of the business and placing it in the hands of the outsourced online help desk. Thus I believe it stands very low on the weighted point matrix (refer to outsourcing matrix on pg. 7). Possible issues may arise based on cultural issues alone. For example they may not understand the language or slang of this certain client base especially if there are high employee turnover rates. It does not seem to reason that this is a major concern if outsourced, or if monitored it could be a very costly function as well.

I have evaluated each of the dimensions in a weighted point evaluation matrix that I believe holds merit in answering the final question, continue to keep in house or outsource the help desk to Bangalore, India? Below is the chart for the weighted point evaluation matrix based on my findings and how I believe each will hold weight in the decision. Overall functionality and well being of the employee is what I believe to be a vital piece in any organizations existence.

Weighted point evaluation matrix for " In sourcing of the Online help desk" | | Performance Measure | Weight | Importance (5 - Excellent, 1- Poor) | Total | Customer Relations | 0.30 | 5 | 1.5 | Problem Resolution | 0.25 | 4 | 1 | Cost | 0.20 | 4 | 0.6 | Reliability | 0.15 | 3 | 0.45 | Quality | 0.10 | 3 | 0.3 | Totals | 1.0 | 3.8 / AVG | 3.9 | Weighted point evaluation matrix for " Outsourcing of the Online help desk" | | Performance Measure | Weight | Importance (5 - Excellent, 1- Poor) | Total | Cost | 0.45 | 5 | 2.25 | Problem Resolution | 0.20 | 3 | 0.6 | Reliability | 0.15 | 2 | 0.3 | Customer Relations | 0.10 | 2 | 0.2 | Quality | 0.10 | 2 | 0.2 | Totals | 1.0 | 2.8 / AVG | 3.6 |

In comparing the performance dimensions, I find that my decision would be to keep the online help desk in house. While evaluating the options to keep in house or to outsource the online help desk, I find the total to keep in house equals 3.9 while the total to outsource equals 3.6, a final difference of 0.3 has been calculated from comparing the two options in favor of in Sourcing.

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Based on the five performance dimensions and the weighted point evaluation matrix that has been outlined in this study, I believe that it would be more beneficial to keep the online help desk in house based on my findings.
Outsourcing to foreign countries, such as India, involves hidden costs, such as travel expenses and creating an infrastructure to manage operations. Other unforeseen costs would include annual price increases as this proposal has no contract stating how long it will be in place. Companies that don’t plan accordingly counteract the financial advantages of outsourcing in the short term. Having the ability to deal directly with the clients has a huge benefit on customer relations, which I believe to be one of the major players in the ISP industry. Outsourcing this will completely eradicate direct communication between the organization and its clients. Limited communication impedes the relationship building process, which may lead to the overall dissatisfaction of the organization and client. Since High Bar Communication is already at the top in terms of service in the field, obviously the big gain to outsourcing this function would be cost savings in the immediate future. The possibilities of this taking a turn for the worst is very high as there are hidden costs such as periodic executive trips to the foreign site, possible temporary residency to oversee the functions and fee’s for trainers if new innovations are to be implemented. If current subscribers were to find that the online help desk had been re-directed to a foreign country, it could have very detrimental effects. Keeping jobs domestic is very important for a lot of paying customers, keeping jobs within the company also serves for a more beneficial environment and the overall health of an organization. I hope I have pointed out enough for keeping this function in house, I hope that the current cost savings will not impede your final decision.

(1) Hensley, Rhonda L “Using reliability tools in service operations” (2011) Article available at: http://search.proquest.com.rap.ocls.ca/docview/866415686/13CCFC356CA6A657645/2?accountid=40483 (2) Lacey, Marcia “The advantages and disadvantages of outsourcing” (2002) Article available at: http://search.proquest.com.rap.ocls.ca/docview/221637324/13CCEB77AAF9533E86/1?accountid=40483 (3) Hecht, Bradley ”The help desk market: Disarray and disrepair” (1996)*Article available at: http://search.proquest.com.rap.ocls.ca/docview/220223318/13CBAE2B2672745BEFA/3?accountid=40483

(4) Siriginidi, Subba Rao “Internet service providers: an Indian scenario” (2000) *Article available at: http://search.proquest.com.rap.ocls.ca/docview/194504667/13CBAF7446A4B863285/2?accountid=40483 (5) Hill, Karen “Lending a helping hand: never underestimate the importance of a help desk within the IS department” (1998) *Article available at: http://search.proquest.com.rap.ocls.ca/docview/219911832/13CBB280ED6363F4178/1?accountid=40483 (6) Tremblay, Era “Why Help Desk Outsourcing Is Not Worth It” (2011) *Article available at: http://www.insurancenetworking.com/blogs/help_desk_outsourcing_it_workforce_management_cost_savings-29088-1.html (7) Siqueira, E. “Brasil: 500 anos de Comunicação. A eterna busca da liberdade”. (2000)
(8) Robertson, Kirstin “Sourcing the support center offshore: Bane or Benefit” (2006)
Article available at: http://www.krconsulting.com/sourcing-the-support-center-offshore-bane-or-benefit/ (9) Webster, Amanda L “What Form of Reliability Affects Employee Performance”
Article available at:
http://smallbusiness.chron.com/form-reliability-affects-employee-performance17633.html