July 2000

BY KEVIN TAYLOR, CYNTERGY

COO: "My operations department says our support staff is terrible and that we need our problems solved faster."

CIO: "My help desk staff says the operations staff is the problem. If you want things solved faster, I need more people."

CFO: "You can't have more people, because we can't afford it. Let's outsource it."

CIO: "We can do it better internally, if you let us have the resources."

CFO: "We can do it cheaper externally, and someone else will have the headaches."

COO: "When my staff calls for help, we just want a quick response and the right answer."

Sound familiar? For many organizations, it does. And for most, it presents the perfect opportunity to check the "vital signs" of their internal help desk operations.

While there can be great benefits in outsourcing the help desk function, it is not a decision that should be entered into hastily. The first step should always be to analyze your current function; this will prove valuable whether or not you decide to outsource. It will give you a better idea of your options: improving your internal operation, outsourcing the entire operation, outsourcing part of the operation or not outsourcing at all. If you don't have a sense of the quality and cost of your current operation, you cannot perform a good comparative analysis of an outsourcing arrangement. If you are in a start-up situation, this step entails doing a full analysis of what it would take to put the support mechanism together yourself.

Your analysis should include the following factors:

Customer Service

• Survey your customer base. Find out how they rate the support they receive; what they like and dislike about the support operation.
• Consider the cost of down time. This can be a large hidden cost. Loss of employee productivity of any kind is a cost.
• Evaluate your reporting and feedback. These are very important mechanisms in a support organization. If these are in place and working well, you can try to eliminate repetitive calls to the help desk by implementing more thorough user training, fixing software problems, providing better user documentation, etc.
• Address volumes and service levels. How many calls does your help desk receive? What are the call volume trends? How long does each caller have to wait in a queue before speaking to an analyst? What is the call abandon rate? If you decide to outsource, these data will be very valuable because they will give you something to compare to when analyzing service providers, and will also help you establish what service levels you will require.

Financial
Evaluate all costs involved in running your own help desk. It is easy to overlook costs in an internal organization, so try to be as specific and realistic as possible. You will want to get to a monthly or annual estimate of total cost. Listed below are some items to consider:

• Staff costs are the largest recurring cost for most help desks. This includes salaries, bonuses, benefits, plus possible additional staff as volume grows.
• Facilities costs include building space, furniture, PCs, phones, network, ACD system, call tracking system, software, etc. Some of these expenses are one-time costs, but you should assume that you will have to replace most of them at some point, so spread the costs over the reasonable life expectancy of each item.
• Recurring costs include telecom charges, software/hardware maintenance fees, pager fees, cellular phone costs, etc.
• Turnover/retraining costs are difficult to calculate, but you should at least estimate the cost of turnover, including hiring costs and training costs.

Volume Of Repetitive Function
It is important to evaluate the types of calls that are handled by your help desk. If they are repetitive and support is provided for a consistent platform, then the odds of successfully outsourcing the function increase. If each incident is unique, however, or users are not on a consistent platform, the odds go down. For example, if you have an application that was developed in-house, and the problems that occur must be resolved by your programming staff in each instance, it would not make sense to outsource these types of calls. Through this analysis, you may find that there is a specific area of support that you want to outsource, while keeping another area in-house.

Once you have completed your evaluation, if you have concluded that outsourcing makes sense for your organization, the next step is evaluating service providers.

RFIs And RFPs
The first step of this process is to put together a Request For Information (RFI), which you will ultimately send to several vendors. The information you have gathered on your current service levels will be useful to you during the development of your RFI, as it will give you a point of reference about the service levels you require. Keep in mind that, in most cases, the pricing quoted by vendors will change based on your service-level requirements, so ask for quotes based on several service level scenarios.

Make sure the RFI includes as much information as possible about the type of support needed: hours of operation, current call volumes and future estimates, call durations, service levels, etc. The more information you provide, the more accurate the responses will be. Additionally, make sure you ask about all services you think you will need in the future. Right now you may just need telephone support, but you might envision needing e-mail or Web chat support next year.

The introductory section of the RFI will describe the function to be outsourced, give details on the type of calls, volumes anticipated and any other information that will be useful to the potential vendor. It should also indicate due dates and the format required for the response, and contact information for questions regarding the response.

Evaluation Of Service Providers
Once you have received all RFI responses, narrow down the field to two or three vendors. Research these companies (the Internet, Better Business Bureau) and then schedule visits to each company. Make sure you meet the operations team in addition to the sales department. Talk with help desk management and help desk staff. Watch the help desk in action. Often, this will give you a more realistic idea of the service than a prepared presentation. Ask for references and check them.

Once you have selected the vendor that appears to best match your needs, evaluate your current situation versus the proposed alternative. Would your costs be reduced? Would service improve?

If you can't make a case for improvements in your financial situation or your customer service situation, then outsourcing might not be the right decision for you. If this is the case, refocus your energies on improving your internal operation. If it appears that outsourcing will benefit your organization, it is time to proceed to the contract negotiations stage.

Contracting Stage
One of the most important factors in outsourcing your help desk service is the relationship, or partnership, you establish with the vendor. Both organizations need to work together for this to be a successful venture.

The vendor will provide you with its standard contracting documentation. Review it carefully and ask for changes, additions and deletions based on your needs. There will be lots of standard contract verbiage regarding the term of agreement, termination, renewal, fees, adjustments, etc. Your legal advisor should evaluate this carefully. The contract should also clearly identify the work to be done by the service provider (scope), responsibilities for each party, required service levels and the repercussions when service levels are not maintained. Evaluate this carefully and ask for modifications so the description of service and service levels meet your requirements.

If you find the vendor is not flexible with the contract, you may want to reconsider opening discussions with your second choice vendor. It is in your best interest to work with a company that is willing to be flexible. Work through the process with the prospective vendor and eventually you will find middle ground that is acceptable to both sides, and come to an agreement.

Implementation Phase
Ensure that there is a key contact within each organization who is responsible for implementation. The vendor should put together a timeline with action items and assignments so that everyone involved knows the plan. Important steps in implementation include:

• Phone system setup,
• Contract/service-level agreements,
• Development and maintenance of knowledge base/documentation,
• Development of problem escalation procedures,
• Model system setup (analysts should have access to the system or applications they are supporting. Using a model system that is an exact duplicate of the supported system is a good idea),
• Support staff training/testing,
• Going live (support calls transition to service provider),
• Live support (representative from customer is on site for a period after new support mechanism goes live).

Evaluation Phase
Once the help desk is up and running, there should be frequent communication between the two organizations with a focus on analyzing what is working well and what can be improved. Service levels should be reported and discussed to ensure they are being met. Plans for improvement should be implemented where necessary, relating to quality of service or service-level deficiencies.

Initially, there will be a need for the new help desk to escalate some issues to your organization when they can't be resolved. Some of these issues, such as programming matters, should be handled within your organization. Other escalated issues should be resolved and evaluated. If it is an issue that should have been handled by the vendor, then it should be discussed. Information on how the issue was resolved should be sent to them for incorporation into their documentation or knowledge base. The next time this issue occurs, the vendor can handle it. Using this method, the documentation or knowledge base of the help desk continues to grow, as does the vendor's ability to handle more issues.

There will always be a learning curve involved when transitioning support from one organization to another. After a reasonable period of time, you should work with the vendor to begin surveying the user community on a regular basis. Keep in mind that even if the agreed upon service levels are being met, user satisfaction is what will really determine the value of the support provided. These surveys will also help you pinpoint which areas of support need improvement.

Steady State
Once the support mechanism has reached steady state, your role changes somewhat. You will spend less time analyzing the support mechanism, but you should not ignore it. Ensure that you receive regular reports containing information on the numbers of problems reported, types of problems, trends, etc. You can use this information to work on preventing the problems from occurring in the first place (such as providing additional training, fixing problematic software, etc.). You should review service-level reporting regularly to ensure that the vendor is meeting its contractual obligation. Continue to survey the user community. Meetings or conference calls with the help desk management should not be needed as frequently at this point, but they should still occur.

There can be many advantages to outsourcing the help desk function, but you need to determine if it is right for you. Explore additional resources including books, magazines, Internet resources or consultants. Investing your time in the early stages will pay off in the long-term. If you take your time you will end up with the right level of service for your user community, at the right price, whether it is in-house or outsourced.

Kevin Taylor is director of call center operations at Cyntergy Corp. He formerly served as the company's call center manager and has in-depth experience in call center operations in all three of the company's core markets: retail, food service and hospitality. Cyntergy also operates a call center in London.

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