Sailing to Support Nirvana
By Ed Romson, CEO, Rocair Corporation
Back to PAGE 1
Outsourcing. Believe me, I have been all over the map on this one. Ten years ago, I was a
major opponent of outsourcing. I felt that we would lose control over the quality of
information provided to our customers. I mean, who understood our products better than
the people who had supported them for years? How could an outside company ever gain
enough knowledge to effectively support our beloved products? Over the years, I have
changed my position almost 100 percent. I've seen outsourcing work in the US, Japan,
Asia, Latin America, and Europe.
The secret is to realize that outsourcing is not a panacea. Some (less than successful)
companies think that they can outsource and forget. They’ll outsource and then never
have to worry about that work again. After all, isn't that the work that they are contracting
for? Well, yes… however, you must keep management control over the outsource
vendor. A strong vendor manager, someone who knows the support business and is
excellent at managing projects, is essential for the success of an outsourcing project. The
thing you are really contracting for is the "production line" work of answering the
questions.
Another requirement is that there must be someone inside the company to handle the calls
escalated from the first-line people. Remember those first two sailors you brought aboard
to help sail your original sloop? Those guys and gals are now invaluable at teaching your
new vendor the ropes, and they are there to serve as the masters of escalation. This not
only makes effective use of your higher paid resources, but also allows for job
enrichment for those poor swabs who have been slogging away, answering the first-level
questions.
What is your involvement in all of this? You own the fleet. You have contracted with a
company to provide the sails and the manpower. You are setting the course and
determining the cargo to carry; that is, what is supported, and how it is supported. You
keep an eye on the fleet, making sure your customers are satisfied, and your ships don't
run aground. You take soundings with a regular customer survey, and you make course
corrections based on what your customers are telling you.
Top of page 
You may be asking whether this outsourcing is more expensive than growing your
support capacity in-house. I'll share some of the pricing I've seen in the past. I must admit
that I've changed some of the numbers to protect the guilty, but the numbers in Chart 2
below reflect bids you might receive if you were to ask for quotes from some of the
larger outsource vendors:
Chart 2. Sample outsource quote: 8 minute call (10 hour x 5 day support)
|
Contacts/day | Team Size | Price/minute US$ | Price/contact US$
|
| 50 | 3 | 1.70 | 13.70
|
|
100 | 5 | 1.40 | 11.20
|
|
150 | 7 | 1.30 | 10.40
|
|
200 | 8 | 1.15 | 9.20
|
|
250 | 10 | 1.10 | 8.80
|
|
300 | 11 | 1.05 | 8.40
|
|
450 | 14 | 0.99 | 7.62
|
This chart needs some explanation. The assumptions are listed at the top, and the chart
assumes that the average telephone call will be 8 minutes in length (a good assumption
for software contacts with reasonably sophisticated users). It also assumes that you are
accepting contacts from 8am to 6pm (10 hours a day), Monday through Friday (five days
a week).
The "Price per Minute" and "Price per Contact" are figures that the outsource company
gives you to say, "This is what it will cost you." You may remember that I came up with
a cost per contact of $16.03 when I did the calculation for in-house staff. That makes
sense; you are paying those "fully loaded costs" and you have very little economy of
scale with just a few support people. You also want to pay more for your internal or
"institutional" knowledge keepers. In this scenario, you are going to use your internal
people as information resources, and as second level support resources -- natural tasks for
higher cost people.
Top of page
Now, what does all this mean? The decision that needs to be made regards the point at
which it makes sense to outsource, rather than grow your support resources inside the
company. You will need internal support resources for higher-level support, the
"Masters" or "Chiefs" on your boat. The crew can be pressed from outside and it makes
sense to do so when the volume of your contacts (calls and email) grows beyond the
capacity of your core cadre of support engineers. This "break point" will be unique to
your circumstance.
The only advice I can give is to look at the ability to scale up Customer Support as your
product sells and grows in complexity. This lack of ability to scale up without
astronomical costs has crippled many companies. In today's business environment,
keeping core strengths within the company, and outsourcing everything else is the
winning solution.
Outsourcing is never the easy way out. As I've said, I've done it a few times, and I am
(obviously) not shy about sharing my thoughts and opinions. If you are considering this
route for technical support and need someone off whom to bounce ideas, I'd be happy to
help.
On that note let me end with an explanation of who we are and what we do. Rocair
Corporation offers assistance in establishing, enhancing and expanding customer care and
International business development operations for high tech companies on a consulting
and project basis.
Top of page
We have a proven track record of designing and building world class Customer Support
and Operations programs, launching international customer care organizations, and
implementing cost efficient, highly effective projects that build customer loyalty. We
have a true commitment to quality. My colleagues and I have an average of 20+ years of
experience and we have an established network of local partners in the countries you're
most interested in.
Back to PAGE 1
Originally published in the BEOS Developer Newsletter (Be Incorporated), Issue 76,
June 4, 1997 and Issue 77, June 11, 1997. Revised, October 2001© Copyright Rocair Corporation. All rights reserved.
|
|
|
Sailing to Support Nirvana