Outsourcing the Help Desk

by Drew Robb

It's often tempting to outsource an activity rather than continuing to maintain it in house. It is easy to set up, there's little initial cash outlay. No more hiring. No more payroll. No more training. At least that's what it appears like at first glance. Done right, it does save money and improves productivity. But done wrong, it can become a nightmare.

In actuality, making the decision whether to outsource any activity involves weighing many factors. In this article we examine the trend toward outsourcing help desk and support functions, the services available and how to select and manage a vendor if the decision is made to move some or all support functions outside the firm.

Sending It Out
IT outsourcing is a huge industry and continues to grow. According to consulting firm Gartner, Inc. (Stamford, CT) North American outsourcing grew eight percent in 2001 to $101.6 billion. That figure is expected to grow more than fifty percent by 2005 to $160 billion, whether or not the economy grows.

"Outsourcing can meet the enterprise's needs whether the economy is good or bad," explains Gartner principal analyst Bruce Caldwell. "During the economic boom, demand for business transformation and scarce IT skills drove outsourcing. The present economic decline has brought cost reduction back to the top of enterprise agendas, and outsourcing can provide this benefit."

A major part of that trend is companies outsourcing their help desks and technical support activities. According to IDC (Framingham, MA), the worldwide market for technical support and help desk services last year amounted $13.3 billion. As companies seek to cut costs, increase flexibility, focus on core competencies, enhance margins, and promote operational efficiency, IDC predicts that the market will grow to $28.4 billion by 2006.

"Increased knowledge and utilization of e-support, and demand for dynamic feedback on support services, are some of the key trends shaping the technical support and help desk services market," said Leslie Rempel, senior analyst in IDC's Software Support and Integration Services research service. "Increased demand for nontraditional device support and new market opportunities with specific vertical industry focus are also key factors fueling the growth in this combined market."

There are many different reasons to outsource help desk functions. One is the growing complexity of IT systems. According to Gartner research director Kris Brittain, the average help desk now supports more than two hundred different applications, and in some large enterprises that figure is in the thousands. While it is easy to support the common applications such as e-mail or word processing, most companies simply don't have the necessary skills to easily support all the software and devices they now deploy. A help desk vendor serving multiple clients, on the other hand, can afford to have specialists in each of these areas.

Outsourcing also allows companies to focus on their key competencies. For smaller companies, in particular, this means they can focus IT talent on supporting key business applications, leaving the support of operating systems, office programs and other non-core functions to an external vendor.

Another factor in the rapid rise of help desk outsourcing is the fact that many companies no longer close knit geographical entities. Telecommuters, increasingly mobile staff and the advent of the virtual enterprise mean that help desk functions go far beyond the four walls. Further, employees these days are often accessing the network from home on nights and weekends, and customers now expect 24/7 service. For these reasons, it is often prohibitively expensive to maintain a fully staffed help desk around the clock to meet such diverse needs.

Then there is the matter of cutting costs. By moving the help desk outside, a company can save the expenses of hiring and supporting its own support staff, including training, equipment, software and office space. While the savings can be significant, it is not a given that help desk outsourcing will actually be cheaper than hosting the function internally.

"A common problem is the misguided management notion that outsourcing will be cheaper - and here vendors should be faulted for perpetuating this myth by their tendency to blithely promise substantial cost reductions," says Compass America (Reston, VA) analyst Dawn Willis. "Although cost cutting is possible when the outsourcer can leverage economies of scale and when the client is less mature and efficient than the outsourcer, the discovery that the best of both worlds - added value at low cost - isn't possible often comes as a shock and can threaten the relationship's foundation."

In 2001 an in-depth research study by supportindustry.com (Santa Barbara, CA) and STI Knowledge, Inc. (Atlanta, GA) interviewed over five hundred executives from public and private sector enterprises who were responsible for internal or external support. Of these, 31.6 percent said that they were outsourcing at least some support functions. Of those who were not, twenty percent said they expected to start outsourcing within the next year.

The primary reasons respondents cited for outsourcing were: lower cost (22%), helped desk not a core competency (10.4%), improving service level (18.4%), business need (18.4%), couldn't fix it themselves (10.7%) and the need to handle demand peaks (8.3%).

Just as the reasons for outsourcing varied, so did functions outsourced. In the same study referenced above, providing hardware break/fix at 19.3 percent, was the main activity farmed out followed by after hours support at 18 percent and support for particular applications such as Enterprise Resource Planning (ERP) and Sales Force Automation (SFA) packages at 15.3 percent. Rounding out the list were support for Web-based applications (14.6%), shrink-wrapped applications (12.6 %), demand peaks (10.6%) and networking (9.6%)

Selecting a Vendor
Once you have decided that outsourcing is right for your company, there is still the matter of selecting a firm out of the hundreds that are available. While there may appear to be a wide range of choices, due diligence is needed here just as much as anything else in IT.

"You can't just pick the first company that comes along," advises Sandy Gettings, CIO for CaraVita Senior Care Management, Inc. (Atlanta, GA), which owns 19 assisted-care communities throughout the southeast. "You have to talk to them to see if they actually have the expertise you need."

Before doing that, of course, you will need to conduct a thorough assessment of your own specific needs in order to compare those to what the vendors have to offer. As it can be costly and messy to be frequently switching vendors, doing your homework thoroughly in the beginning will save a lot of heartache down the line. This involves listing out your software, hardware and Web activities, anticipated budget and expected business changes over the next few years. You will also need to benchmark your current support operations in terms of both service levels and costs in order to see if you are really getting a better deal by going outside.

"The optimal time to benchmark operations is prior to negotiating an outsourcing agreement," says Compass America's Syd Hutchinson. "This enables the client organization to set a stake of objectivity in the ground and establish a negotiating position."

Factors to consider when evaluating a vendor include:

• Expertise: What applications, databases and operating systems does the vendor support? Does it have experience with applications specific to one's own industry or type of operation? What about custom-built applications? What types of hardware are supported? Can it do root cause analyses and directly fix or provide advice on fixing what is found, or does it only handle the immediate user problem? What ongoing training does it provide to its own staff and your company's end users or customers?
• Availability: What hours is service available and which locations? Is the service onsite or offsite? If offsite, how long will it take to get a technician onsite when needed? Is service available by phone, e-mail, and chat?
• Reporting: What types of reports are available to track types of problems found and their resolution? Is this data available on line in real time? Can you view any open service tickets, including actions taken and the result? What about closed tickets? Can the data be trended or is only it only available as discrete incidents?
• Service Levels: What is the first time solution rate? How long does the person have to wait on the phone before someone picks up the line? What's the average problem resolution time? How is end-user satisfaction measured?
• Communication: How will the vendor communicate with your firm and other hardware or software vendors if the problem is outside their area of expertise or not part of the contracted service? How will they work together with other entities to actually solve the problem instead of just finger pointing? (e.g. the software support people saying it is a hardware problem, while the hardware people saying it is a software problem.) If keeping part of the help desk in house, can the vendor's help desk management software integrate with your own?
• Company: How large is it? Is it financially stable? Does it have the quantity and depth of resources to fully service your needs? How long has it been in business? Has it shown that it can adapt its structure and service offerings as technology changes, or is it stuck in a pattern that will become outmoded?

These are general types of questions that will help distinguish between potentially experienced service providers and the also rans. Each company, of course, will have their own specific questions to pose concerning their own operations.

Striking the Deal
Once you have located a prospective tech support service provider, there is still the matter of working out all the details and making sure they are in writing.

"Often, it is impossible to tell - because of the existence of only the highest level of terms and conditions (T&Cs) - what work is being contracted," says Lisa Stone a vice president and research director for Gartner. "The description of services to be delivered often are defined in such broad terms that the service recipient walks away from contract signings thinking it will receive services the service provider never intended to deliver - therefore, those services are not included in the cost of the engagement."

She recommends that four areas be addressed during the negotiations and clearly spelled out within the service agreement.

1. Defining the Intent of the Relationship: Initially this is necessary both to ensure that both parties have the same idea. Later on, as the personnel managing the relationship change, the document will provide a record of that original intent. "A clear statement - in terms of scope of services, statement of service levels and associated pricing - is integral to objectively view what the Service Provider is obligated to deliver and at what cost," Stone explains. "Because of the pace of business and technology change, it is imperative to document the risks involved in the relationship, and the underlying assumptions, to be able to adjust the relationship as those assumptions evolve or prove to be inaccurate."
2. Change Management: Particularly during the term of any long-term contract, technology will advance, the Service Provider will develop new offerings and the customer's business needs will change. The contract must address this.
3. Relationship Management: For long-term outsourcing contracts, this would include the appointment of an independent advisor who would help keep the relationship on track
4. Transition Planning: This includes both the initial transfer of the service from the customer to the vendor as well as what will occur when the relationship ends. "For long-term outsourced arrangements," she admonishes, "it is imperative that initial transition activities, ongoing transformational activities and the transition to an in-house resumption of services or to a new service provider be analyzed to ensure the necessary documentation and processes are understood to effect such an event."

Managing the Relationship
After you have signed the contract, the real work begins. Just because another company is performing the work doesn't mean that it doesn't require constant attention from a management and quality control perspective. You will need to meet regularly and discuss performance with vendors just as you do with employees. A key element of this is maintaining a close watch over the contract benchmarks.

Consistent measurement and tracking of problem management elements and metrics provide an important feedback loop for continuous improvement," says Gartner's Kris Brittain. "Defining consistent profiles and metrics forces the CSD [Consolidated Service Desk] to deal with weaknesses in the IS organization and to identify gaps in service coverage - both crucial for identifying and improving service quality." She recommends four measurements:

1. First-contact resolution rate: This shows what percentage of callers have their problem completely resolved in the first call. On average in 2000, the figure was 66 percent, with the top quartile achieving seventy percent and the bottom sixty percent. This figure will vary depending on the complexity of the problems being addressed. If the help desk, for example is being inundated with a simple problem such as resetting passwords, the percentage will approach one hundred. If, on the other hand, a company has a good online self-service help facility, users will go there first for the simpler problems and resolve them on their own. This will result in fewer calls to the help desk, but a lower resolution rate since the support staff is only dealing with the more difficult problems that the users couldn't fix on their own.
2. Average Call Length: This consists of the number of minutes it takes the help desk to help an end user, including the time to handle any associated paperwork. Remote desktop control can bring this figure down, while use of self-help causes it to go up again as covered above. Average time is 8.7 minutes, with the top twenty five percent bringing it down to 7.8 minutes and the bottom twenty five percent taking 11.3 minutes.
3. Abandoned Calls: This is the percentage of callers who hang up while they are on hold. The average is seven percent. When a company uses an interactive voice response system, the figure should be adjusted to only reflect those who did not get their answers in this way.
4. Average Queue Time Per Call: This is the number of seconds that people wait on hold during peak periods, with an average of 67 seconds.

In addition to these four hard measurements, others recommend using some sort of customer satisfaction tracking. While less precise, doing this can reflect the overall quality of the user experience, an intangible but vital issue in both job satisfaction and customer retention. But these types of surveys should augment, and never replace, objective, quantitative statistics.

The format and the frequency for comparing the benchmarks will normally be detailed during the contract negotiation. There is generally no incentive for the vendor to carry out such benchmarking, so it is up to the client to ensure that the analyses be done according to schedule.

It All Depends
Unfortunately, there is no clear-cut yes or no answer to the question, "Should I outsource my help desk?" Outsourcing may be right for some situations, but in just as many other cases it is not the best solution for help desk problems. Like leasing a car rather than buying, at the end you have no equity in terms of trained and experienced personnel. But, on the other side of the coin, it can certainly turn out to be a means of boosting service levels both to clients and employees.

Services Available
A wide variety of outsourced support services exist covering everything from a service agreement for a single application or piece of hardware to completely taking over the entire support function. Following are a few vendors and the services they provide as an illustration of what is available.

Telvista is a help desk outsourcing firm that used to be part of CompUSA. Maintains four call centers with a combined 2600 workstations, three in Texas and one in Massachusetts. Provides internal help desk services as well as call center support for its clients' customers, which includes CompUSA. Will set up a dedicated support staff for one client, or they can access a shared help desk. In addition to servicing corporate clients, the company has prepaid tech support services, called DialaTech, for individuals and small businesses.

IHS Support Solutions will "insource" a support center, where it provides the entire help desk staff, including on-site management for its clients.

STI Knowledge, Inc. will set up support centers in its client's facilities, operated by its own or its client's staff, or at its own facilities.

Charles River Consultants provides temporary staff to augment a company's help desk onsite. Also provides off-site personnel to extend service hours. Will send help desk consultants to homes to support mobile or home workers.

Barrister Global Services Network provides on-site, multivendor hardware support nationwide including computer warranty services, network design and implementation and cabling.

Synergon Solutions, Inc. has help desk call centers in Florida and California as well as on-site technical support.

Help Desk Automation Experts provides outsourced customer service support during off hours. Will integrate its data with clients' call tracking applications.

In addition to the above companies that specialize in outsourced support, services are also available from major vendors such as IBM Global Services, Computer Sciences Corporation and EDS.