- Scope and Purpose.
- Problem Background.
- Managing risks of an outsourcing call center in the chosen location.
- Choice of Location.
- Conclusion and Recommendations.
InterState Incorporation is currently considering making some changes in its business operations to remain competitive in the global market. The company is considering outsourcing all or part of its 150-personnel call center to an oversea location. The management believes that outsourcing these services will lower the operational costs of the company leading to an increase in revenues. Four countries, which include China, India, Philippines, and Canada, have been identified as potential locations for the outsourced call center. However, the management is still at crossroads on which country to settle on that will guarantee maximum success. Consequently, our team has been tasked with the responsibility of evaluating the potential of each of the suggested countries to host the project and present a report.
Over the last few years, InterState Inc has tremendous success and growth in terms of revenue and asset base. Their customer base has also grown over the years both in the United States and in the global market. The company is considering operational changes to maintain their position in the market and increase their profitability by outsourcing their call center to an oversea location. The purpose of this report is to evaluate the viability of the suggested host countries and determine the best option for business profitability.
The scope of this report will cover the background of this dilemma, risks associated with each of the suggested host countries, and how to manage these risks. The report also covers the factors that the company should consider in choosing the most appropriate location, advantages, and disadvantages associated with each of the four countries, and finally make a recommendation.
China, India, Philippines, and Canada are some of the most important trading partners for the United States of America, and many US companies have succeeded in these markets. We assume that these bilateral trade partnerships between the United States and these countries will continue in the foreseeable future. Another assumption is that the economic and political environment in these countries will remain stable and healthy for business.
The data and information for this research will be lifted from the available secondary sources. These sources include business journals, business newspapers, books, relevant online sources, US Commercial Services, and the Central Intelligence Agency's World Factbook.
This research is limited to the information that is lifted from secondary sources, some of which we can independently and conclusively verify due to the dynamic nature of business practices. Additionally, the constraint on time and resources has limited our capacity to seek expert opinion from the professionals in this field. It is not all so possible for the group to physically travel to all these locations for on-site research, leaving us with only the option of secondary data.
We established a uniform approach for evaluating all these countries, which also formed the basis of our recommendations. The criteria used were based on the overall advantages and disadvantages associated with these countries in regards to hosting the call center. The recommendation is based on the country that brings the highest benefits.
InterState has a cut an edge in the insurance industry and is currently one of the best performing industries in the market. To maintain their position in the market and industry means that they must continuously assess and evaluate their operations and strategies. After recording growth in terms of customer base, the management is considering outsourcing call center overseas as a solution to challenges that affect the revenues of the company. Increased customer base implies that the company must run a 24/7 call center to handle concern from both their customers and insurance agencies. The company’s staff currently can not run a seamless 24hr service call center. As a result, the management considers outsourcing ideal for the following reasons. It will inject new energy and professionalism in handling their customers at any time any day. Additionally, it will lower the operations costs of the company leading to revenue growth.
A call center primarily deals with clients of the company, and outsourcing is one of the most significant decisions the management can make. The outsourcing part of the entire call center has reaching consequences for a company. Some of the risks associated with outsourcing call centers include loss of control, compromise on quality, geopolitical problems, data and information breaches, labor market issues, communication barriers, and technological hitches. These risks can be managed by doing due diligence, having clearly defined objectives, and developing a robust selection process (Govender & Essop, 2016).
The following are the advantages and disadvantages associated with each of the proposed host countries
China is the second-biggest economy in the world and the fastest growing economy globally. There are a lot of opportunities in China, both in the labor market and the products' market. Outsourcing a call center to China comes with the following advantages and disadvantages
- Availability of qualified personnel at lower costs.
- Advanced technology in China offers seamless capabilities. China's IT market is the strongest in the world.
- Outsourcing in China provides an opportunity for international expansion into the vast Chinese market.
- Offer better services than the domestic market.
- Language barrier; China has a very low English-speaking population.
- Less advanced quality record in Software
- China is relatively new in this market hence inadequate experienced personnel.
- Geopolitical factors such as trade wars that have been witnessed between China and the United States of America remains a threat.
India is one of the fastest-growing economies in the world and has established a huge reputation in the provision of outsourcing services.
- India has a highly educated and qualified pool of professionals.
- Indian cities global are internationally recognized as leading outsourcing destinations.
- The country is currently undergoing a digital revolution, which has seen the government put up robust investments in IT infrastructure (Chow & Tastsoglou, 2016).
- Indian firms have been in this industry for the longest time hence the availability of a pool of experienced professionals.
- Data security is compromised in the India call center market.
- Lack of a multilinguistic approach and cultural barrier is a challenge.
- Rising costs of labor in India
- Poor infrastructure with occasional power shortages.
Canada is one of the biggest economies in North America and enjoys close trade ties with the United States more than any country in North America. Besides, they have a robust and thriving call center market that many firms in the USA have benefited from.
- Cultural alignment; Canada shares a lot of similarities with the United States in terms of their business culture.
- Canada offers exemplary customer service; Canadians are known to be warm and friendly people and thus delivers a superior customer experience (Clap, 2019)
- It brings the most out of a strong dollar. The US dollar is currently very strong, meaning outsourcing in Canada guarantees quality and value for relatively little spent.
- Canada enjoys a pool of highly trained, experienced, and skilled customer service agents.
- Availability of advanced information technology.
- Relatively high costs of labor as opposed to other markets like China
- The call center industry in Canada is facing stiff competition from emerging markets like China.
Philippines' call center industry has grown over the years to cut a niche in the global markets. The following are the benefits and challenges associated with outsourcing call centers in the Philippines
- Filipinos are known for their impeccable communications skills and therefore excellent speakers (Sallaz, 2019)
- World-class customer service experience due to their warm, friendly, and charismatic nature.
- Filipino call agent centers have very strong work ethics based on commitment and discipline.
- Availability of highly qualified and experienced call center agents in Philipines
- Relatively lower costs of labor.
- Less advanced information compared to other markets such as China and Canada.
- Competition from other markets such as China
In summary, the four countries suggested as potential hosts for the InterState offers some of the best call center services in the world. They all ideally tick all the boxes for the company's considerations. However, after research and analysis, we are left with two countries as the most viable hosts, that is the Philippines and Canada. China and India did not merit in our top two because of geopolitical factors and data and information insecurity, respectively. These two factors proved too significant to be ignored.
Additionally, the cultural and potential language barrier between the two countries, and the US also played a role in elimination. On the other hand, we settled in Canada and the Philippines due to their renowned world-class services. Whereas Canada has proved to be a good market, in our opinion, the Philippines should get consideration ahead of Canada. Therefore, we recommend that the company settles for the Philippines for outsourcing a call center due to the following reasons. It offers world-class call center and customer services at a much lower cost than Canada. Additionally, they are no to be good communicators with impeccable command of English. The Philippines there offers the best deal for lowering operational costs while providing world-class customer service experience for customers.
Chow, E. N. L., & Tastsoglou, E. (2016). Globalization, Work, and Citizenship: The Call Centre Industry in India. In Contours of Citizenship (pp. 59-74). Routledge.
Clapp, R. (2019). 4 Advantages of Outsourcing Customer Service to a Canadian Contact Center. Retrieved 28 November 2019, from https://www.advantagecall.com/blog/4-advantages-of-outsourcing-customer-service-to-a-canadian-contact-center
Govender, K., & Essop, F. (2016). Outsourcing Inbound Call Centers: Impact on Customers' Service Experience. J Account Mark, 5(187), 2.
Sallaz, J. J. (2019). Lives on the Line: How the Philippines Became the World's Call Center Capital. Global and Comparative Ethnogr.
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