Outsourcing

Outsourcing options range from simple call accounting to complete responsibility for telecommunications (staffing, provisioning, negotiating with carriers, and efficiency studies). QuantumShift, for example, offers to become the telecommunications function of its customers. By negotiating with carriers, understanding the details of cost savings, and managing assets, the high-end service provider can presumably offer a better total package than end customers can obtain for themselves. All the usual pros and cons of outsourcing apply:

• Pros:

  • The provider is specialized in telecommunications and cost management, and thus develops expertise.

  • Costs are controlled by leveraging relationships with other providers (e.g., AT&T, MCI, Avaya).

  • Outsource staff have a career path in their specialty, whereas within the client organization telecom staff have limited upward movement opportunities.

  • The provider can leverage processes learned across multiple clients.

  • The provider may make specialized software and hardware available so that the client avoids some up-front capital expense.

  • Reporting, cost distribution, and call accounting are well developed and usually provided via Web browser screens.

• Cons:

  • The interests of the customer and the provider may not exactly match.

  • There is some loss of control over the process.

  • Technology enhancements could take a back seat to well-defined, transaction-oriented charges. In other words, if the entire contract is written so that the service provider is paid solely on a defined transaction basis (interstate minutes, number of T1s, etc.), there could be a tendency to maintain the status quo. Codicils should be put in place that maintain incentives to continually review new technology and implement as appropriate.