Outsourcing and Customer Satisfaction —

Essay by uzzi04 May 2004

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Outsourcing and Customer Satisfaction -

Beyond Service-Level Agreements Myriad reasons underscore a decision to outsource an enterprise's IT functions. Whatever the driving forces, the decision to outsource an IT function impacts an enterprise's internal end users. Whether that impact is positive or negative depends on a variety of factors. In an attempt to minimize the negative and maximize the positive, many enterprises include very detailed measurement mechanisms within their service-level agreements (SLAs) of outsourcing contracts. The underlying assumption is that by identifying specific metrics in the SLA, an enterprise can measure and manage the performance of an external services provider (ESP). These performance metrics usually are based on absolute values (e.g., the help desk responds to 80 percent of calls within 24 hours). However, end-user satisfaction is based on expectations regarding delivery of IT service (i.e., 80 percent of end users expect a callback within 1 hour). Despite an ESP meeting an established performance metric, an end-user survey might reveal many dissatisfied end users.

This example illustrates the insufficiency of performance metrics alone in providing a total picture of outsourcer performance.

End-user satisfaction is based on perception - the end user's perceived value of IT services is relative to the IS organization's perceived value of IT service delivery. The end-user perception of reality may differ substantially from the IS organization's perception of reality. Based on measurements, the IS organization may regard its service as excellent; however, the end user may assess the value as poor. To avoid this gap in the perceived value of IT between expectations and reality, many enterprises design SLAs that go beyond the typical performance metrics to include a customer satisfaction analysis as part of the contract. The purpose of an end-user satisfaction evaluation is twofold. First, and most importantly, an end-user satisfaction assessment...