PURPOSE : 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.
DESIGN/METHODOLOGY/APPROACH : 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.
FINDINGS : 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.
RESEARCH LIMITATIONS/IMPLICATIONS : The study was conducted in a single emerging market. Future research should confirm the validity of this model in other markets.
PRACTICAL IMPLICATIONS : 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.
ORIGINALITY/VALUE : 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.