OUTSOURCING CHALLENGES

Global Supply Chain Management - Outsourcing Challenges

Global Supply Chain Management - Outsourcing Challenges

Introduction

It is difficult to determine the success of outsourcing as a business strategy. This paper will attempt to discuss why companies outsource part of their business processes and the factors that are critical to this being a successful strategy. Organizations in the UK are able to outsource back office work such as collections, customer support, sales and marketing. In all these activities the human resources involved are a significant component because they are key in ensuring that the service transacted is to the satisfaction of the customer. Outsourcing can take many different forms. Prominent among these are back-office software development and call center work currently outsourced to countries such as India, which are amongst low-cost providers. Most of the outsourcing takes place in a highly disconnected environment because of the geographic and cultural distances between customers and the service providers.

Generating customer satisfaction under these environmental conditions is not an easy task because geographic and the cultural distances require interaction across different frames of reference and poor communication media. Client companies outsourcing to countries such as India often find it difficult to communicate the context within which they are operating. This contextual knowledge includes both explicit and tacit dimensions (Sia Siew, Lim Wee & Periasamy, 2010). These are relatively easy to communicate to the call agent and to train the agent as he provides the services. The tacit dimension may include client sensibilities regarding quality aspirations, timeliness, interaction patterns, communication style and other such intricate to verbalize aesthetic sensibilities.

A lack of understanding of the tacit dimensions makes it harder for the service provider to generate trust in the customers they are servicing overseas. The ability to service a customer within a familiar tacit contextual frame may very well define the standard of customer service in an industry. This kind of customer service may in turn determine a client organization's identity and the image that it may wish to project in the market. It is not unusual to find dissatisfied customers because call agents are unable to solve their problems. Call agents are at times unconscious of the local conditions and as a result try to apply generic rules to solve unique customer problems that relate to specific local conditions (Sloper, 2004). Some of these problems are easy to identify and script and are therefore almost always included in the training curriculum. Examples include language, accent, local weather, economy and few basic societal rules. Besides these, there are some problems that may be script-able but are often overlooked or not identified. Then at the far end of the spectrum are problems that are non-scriptable/unidentifiable or completely tacit. In software outsourcing a client may pose a problem and rather than immediately acknowledging receipt of the email (the desired response) there is an uncomfortable silence from across the world because the programmer in the meantime is frantically solving the problem. These are a few examples that illustrate the problems associated with a ...