1. What are you (in the role of Kathy Dalton) going to present at the outsourcing strategy meeting in two weeks and why?
I would present the proposal for the three-tier Customer Support structure, which would include details on who will perform which function and the justification for such choices. For example, I will cite the proven performance of the selected outsourcing vendor to ensure executive management of their capabilities and their reliability. I will also justify why they can be assigned the tasks that will be outsourced to them with regards again to the outsourcing vendor’s capability as well as with regards to any security concerns that this move might bring.
I will then present estimates of the possible cost savings that the outsourcing initiative will bring to eBay. Finally, I will present the proposed plan on how to roll out this initiative in terms of the training, knowledge transfer, and the like. I will also explain how the transition will take place gradually, that is, it will be pilot tested in small amounts (of email) first and gradually increased, depending on the outsourcing vendor’s performance.
2. When companies like Dell are reducing outsourcing in some areas, should eBay be considering expanding outsourcing?
Yes, it would definitely be worthwhile for eBay to consider expanding their outsourced
services, given that it has so far been advantageous for them as shown by their increased revenue and continued customer growth. I think that only by outsourcing can they keep up with their massive customer growth in the most cost effective manner.
Also, just because other companies are reducing their outsourced services doesn’t mean that eBay has to follow suit. After all, every company is structured differently, has its own business model, and has different operational needs. For example, Dell sells computer hardware, which means they don’t necessarily conduct majority of their business online as their products can also be purchased from brick-and-mortar stores. As such, their customers also won’t need as much customer support, given the nature of Dell’s product (most computers function in pretty much the same way) and given that customers would usually first go to the store for any hardware problems instead of calling Dell’s customer support.
eBay, on the other hand, conducts its business entirely via the Internet where tens or hundreds of new users join everyday. As such, these new members would likely need help from customer support on how to use the site. Moreover, there’s no one else they can go to for help other than eBay’s customer support staff.
3. What are the limits to outsourcing Trust and Safety?
Complicated general support emails, such as those that involve member billing disputes,
may not be good for outsourcing as they would be best settled by the main company who is most knowledgeable about how to handle such issues. This is with the consideration that the main company would be more knowledgeable about the laws and procedures that are specific to the United States, which the outsourced staff may be unfamiliar with. As well, outsourcing of support for emails that contain sensitive information such as personal information, reports of listing violations, reports of attempted identity theft, or reports of member misconduct or fraudulent behavior may be better handled internally than outsourced because eBay doesn’t have complete control or knowledge over how the outsourcing vendor handles these information and emails, especially if the outsourcing vendor is in a foreign country. The issues may be handled incorrectly and the privacy of the members’ personal information may be compromised. If something goes wrong, it would be difficult and time-consuming for eBay to investigate where the glitch occurred.
4. What are the advantages/disadvantages of the BOT strategy and how does it stack up against the other two options Dalton outlines in her Excel spreadsheet. What are opportunism, capability, and flexibility implications of the strategy?
One of the advantages of using the BOT strategy is that it is capable of responding to
customer emails very quickly, more quickly than a human user can. It is also good for responding to simple emails or for sending automatic responses to acknowledge the transaction that a member made. However, its disadvantages seem to outweigh its advantages. For one, it is not flexible as it provides members with a generic response. It is impersonal and cannot provide customized responses to the members’ concerns, which address their particular questions and provide them with the details that they need. Moreover, using this type of strategy as a form of auto responder makes it prone to hacking such that external parties may be able to steal sensitive information from the emails or send inappropriate emails, such as spam mail, to the members.
5. What will eBay’s senior management do with Kathy Dalton’s new three-tiered outsourcing strategy?
They will approve Dalton’s proposal for the three-tiered outsourcing of eBay’s customer
services. They will approve it on the condition that the transition will be gradual, its scope being increased, depending on the outsourcing vendor’s performance. They will also provide conditions about including more Trust and Safety emails in Tier 3. In reality, due to the success of the outsourcing initiative, Dalton’s initial proposal for a three-tier outsourcing of eBay’s customer support became only two-tiered, one in India and another in Canada.
