Thatcher, S 2004, 'Service optimisation : an exploration of contemporary servicing and sourcing strategies and associated information technology solutions', DBA thesis, Southern Cross University, Lismore, NSW.
Copyright S Thatcher 2004
Global financial and other organisations have and continue to establish call center and back office servicing capacities in Asia to complement their existing ‘domestic’ (US, UK, Australia, Canada etc) operations and supplement their in house deficiencies. They use both third party and proprietary suppliers for the provision of these services, enabling levels of capital investment and risk to be strategically managed. Through these strategic sourcing approaches, organisations have been able to yield significant performance benefits, while realising operational savings of 30% or more. However, there is little information in the extant literature about the technology and telecommunications solutions supporting these efforts and, as such, the following research problem was identified and examined:
“Why do global financial organisations leverage Asian based suppliers for the provision of front office and back office services and how effective are the technologies solutions supporting these?”
Following an extensive review of the contemporary extant literature relating to call center and back office servicing, core versus non core business and sourcing strategies, coupled with existing and emerging technology and telecommunications systems and solutions, a theoretical framework was developed. In particular, the following five key research issues were identified and subsequently explored in this research:
What is a service optimisation initiative and why do organisations pursue these in Asia?
Which Asian markets are leveraged and what factors influence the decisions to utilise third party versus proprietary service providers?
What influences the technology solutions employed and why?
How do the existing technologies solutions perform and are they optimal?
How should the technologies solutions perform and what factors should influence the design?
Based on the information available in the extant literature and with particular regard to the technology and telecommunications solutions supporting the development of call center and back office servicing capacities in Asia, it was clear that these areas were under-researched or pre-paradigmatic. As a result, a theory building approach leveraging a qualitative research methodology was developed for this research. Specifically, a holistic multi case approach focused on one organisation, three strategic business units and ten instances (cases) of developing ‘off shore’ (non US, UK, Australian or Canadian) servicing capacities was used.
Data was collected from the ten cases of developing off shore servicing capacities through convergent and in-depth interviews. Five interviews per case were undertaken with purposefully selected ‘information-rich’ participants, including senior sponsors or champions at Vice President or Director level, program directors and business and technical subject matter experts. The data collected through these interviews was transcribed and presented in matrices and tables allowing cross case and cross cluster analyses to be undertaken.
The research findings were subsequently compared and contrasted with information present in the extant literature and specific contributions to the ‘body of knowledge’ identified. Firstly, a clear definition of ‘service optimisation’ was derived, along with the utility of financial slack to enable strategic growth. Secondly, it was found that India and the Philippines are primary sourcing markets because of relevant resource abundance and financial arbitrage. In addition, geopolitical risk management and available capacities were found to underpin the selection of proprietary versus third party service providers.
Next, it was found that business stakeholders influence the technology solutions implemented during proof of concept or pilot efforts and that there is little attention applied to reengineering these once they are in place, even though they are considered suboptimal. It was also found that the ‘piece meal’ approach to establishing these capacities using isolated proof of concept technology and telecommunications resulted in significant complexity, redundancy and cost, with little opportunity to account for these ‘facilities’ on a consumption basis. Finally, it was found that contemporary publicly available technology and telecommunications solutions procured as ‘managed services’ would enable optimisation. Moreover, the provision of these sorts of services from specialist suppliers who have economies and expertise is expected to offer improved performance and flexibility with reduced risk in a ‘user pays’ consumption model.
In addition to the contributions highlighted above, this empirically based research establishes a foundation for subsequent ‘green field’ efforts. In particular, it offers additional information around the notion of optimisation and how significances in existing models may vary or change in alternate circumstances. In this respect, this research offers empirically founded considerations for organisational strategy, with a particular focus on the development of ‘remote’ call center and back office servicing capacities.