The purpose of this paper is to develop a deeper understanding of the philosophy adopted by organizations in making the decision to outsource contact centers or not.
A phenomenological study was used to develop an understanding of industry participants’ experience of the outsourcing of contact centers in South Africa. Ten in-depth interviews were conducted. Content analysis identified key thoughts and common themes. This was used to develop a model for outsourcing.
Evidence was found to support three propositions developed from the literature regarding the reasons for and the unintended consequences of outsourcing. A model was developed to illustrate how costs can be reduced by outsourcing under different conditions of “headcount constraints” and “failure costs” of customer relationship management.
The study was conducted in a single emerging market. Future research should confirm the validity of this model in other markets.
Outsourcing contact centers can lead to a loss of control over CRM and internal brand management. This can be avoided by paying considerable attention to the governance of the contract. There are two key messages for managers: to resist the short-term attraction of potential cost savings and marketing must play an active role in the outsourcing decision.
New knowledge is provided about the philosophy adopted by organizations when outsourcing contact centers. A model is presented to guide managers in the outsourcing decision-making process.
