Outsourcing process

The new MD focus on cost cutting options, and the owners are interested in the balance sheet improvements. It seems a good idea to outsourcing the telephone-based customer service, because by that could take some benefits for company. Such as concentrating on core activities and core competencies, getting flexibility and saving cost. However, there are some disadvantages by using outsourcing process. That will take some potential costs (transition costs and monitor costs), and lose control, and so on. Citel's Call Centre, which we tend to contract with, is housed in a large building in South Auckland.

Customer Services Representatives (CSRs) work via telephone and on screen in small group. They are dealing with customer queries and access. One group works on the contract with transport company Land Freight. It seems that CSRs are running with a good standard. Outsourcing process firstly maintains a focus on company's core business. By outsourcing the telephone based customer service process, the company can expand opportunities as well as our choices in the business environment, improve company's efficiency, and ultimately survive in a competitive environment.

Secondly, outsourcing enables the company to improve service levels to customers, employees and vendors, as well as helping it reduce general and administrative costs. It also allows the company to enhance technical capabilities without expanding capital investments, to preserve its focus on core competencies, and to improve competitive positioning. However, outsourcing will generate the costs of transacting and monitoring. Furthermore, another important cost of outsourcing involves the perceived loss of control.

The ownership means control from most manager's view, as does an employee relationship compared to a contractual one. Disadvantages of outsourcing do not end with transaction and monitoring costs and loss of control, also other issues should be considered. Those include 'hollowing out', loss of in-house skills, loss of corporate memory, and loss of innovative capacity (Domberger,1998). After interviewing some staff in Citel Call Centre and the general manager Land Freight, it seems all CSRs are running efficiently with a high standard.

CSRs send all necessary information instantaneously in a highly useable format to Land Freight's staff, and then Land Freight's operations staff are able to concentrate on working closely with drivers at optimizing loads and delivery speeds, particularly providing delivery solutions to special customer. However, three main points have to emphasize during some unscheduled meeting with two CSRs, an off-duty manager in Citel, and Land Freight drivers. Firstly, Citel has replaced two CSRs due to their sickness, and put in three new CSRs in that established group.

Although those CSRs are familiar with computer interface, they did not clearly know the type of freight carried and types of vehicles used by Land Freight. Therefore those new CSRs not only made some mistakes for choosing the right vehicles for freight, but also gave customer inaccurate prices. Secondly, another problem are made by CSRs are lack of patience and lack of ability of distinguish which is the most urgent. After they dealt with hundreds of telephone calls, they lose their patience and transferred the customer from Land Freight to Edwards Transport.

Finally, during the preceding month the main telephone switchboard at Citel Telecommunications have failed three times. More that 100 call center customer service representatives could not receive and make telephone calls. Recently Citel was contracted by a motor insurance company, AutoSure. During that failure, Auto Sure's operations manager complained that their customer could not contact with company and get assistance. After that the Citel manager said that they are trying their best to solve those problems and increase the standard of service level.