by Jesper Østergaard
Date Published - Last Updated February 25, 2016


Cost, security, and culture are three of the key concerns organizations must address when they’re considering outsourcing a service desk. Service desks are not inexpensive operations; on top of labor costs, there’s often pressure to keep the service desk open 24×7, which increases costs several times over. In addition, some organizations worry about the security of their data, while others worry about cultural and linguistic barriers.

Self-service, whether outsourced or in-house, is one method of addressing these concerns and it’s generally much cheaper than manually handling service requests and incidents; traditional phone-based support, for example, is three times as expensive as self-service, according to HDI research. In the years to come, you can expect to see this trend increase (especially as hourly labor rates of labor in the East go up).

Déjà Vu: Lean Manufacturing

Self-service and automation are like déjà vu to the early days of the transformation of the auto manufacturing industry. In the 1970s and ‘80s, Japanese cars exploded onto the North American and European markets. With cars that were both higher quality and less expensive, Japan was clearly onto something. Its secret? Lean manufacturing. North American and European auto manufacturers spent years playing catch-up, streamlining their operations and automating production. Today, lean principles are commonplace, but this doesn’t mean that all industries and organizations have embraced lean equally.

Outsourcing: The Short-Term Answer

The world continues to become a smaller and smaller place. As the far corners of the globe come online and the cost of transporting goods and people decreases, companies have to adapt and take advantage of the opportunities created by increased mobility and connectivity.

While cost of labor in the East may be as little as one-tenth the cost of labor in the West, companies that haven’t embraced lean principles are struggling to succeed using high-cost, labor-intensive processes. These are the companies that inevitably turn to outsourcing. For many companies, this is the only answer; otherwise, they’re out of business.

As a short-term response, it’s a logical move that takes advantage of the opportunities created by globalization. However, it’s not a long-term answer for most organizations. In addition to having to deal with the challenges created by different countries’ cultural, linguistic, and political environments, these organizations need to look into how their products and services create value. If they’re providing the same products and services as other companies at a higher cost and lower quality, they will lose their competitive
advantage. They must also consider the impact of economic maturity on global outsourcing centers (e.g., China, India). As these regions mature economically, the cost gap will decrease. Labor costs in China, for example, have been growing by 20 percent annually in recent years. Higher labor costs mean lower revenue.

Automation: The Long-Term Benefit

Traditionally, outsourcing is a one-to-one transition where business processes stay largely the same, with the exception of labor costs, which go down. In most organizations, however, change is the only route toward establishing or maintaining a competitive edge. Change is never easy—in a recent study in The Economist, 50 percent of survey respondents identified resistance to change as the reason for maintaining the status quo—but if you’re looking for long-term benefits, then this is where you need to
put forth the greatest effort.

While the manufacturing industry develops real, tangible products, the service desk’s product is intangible. Many service and support organizations have already implemented automated processes that enable them to automate workflows, limit human intervention, and monitor and proactively react to situations in their data centers. Customers, however, don’t see the inner workings. They care about two things: that their calls are taken quickly (i.e., within the time frame stipulated by the organization’s SLA) and that their problems are solved as quickly as possible. All customers want is to be able to get on with their work. To the latter point, this is true even when using self-service.

Automation via Self-Service

Service and support organizations embraced outsourcing in much the same way as the manufacturing industry: completely and sometimes enthusiastically. Outsourcing has enabled companies to save money, increase profits, and provide round-the clock support, offsetting any security, control, and language issues. However, now that the gap between hourly rates in the East and West is closing, organizations are leveraging their experience with outsourcing and revisiting their outsourcing agreements, making this an ideal time to examine their service offerings and improve their processes. One of the most compelling channels is self-service.

Self-service not only makes it possible to cut costs, it also can result in better, more secure processes. Start with the low-hanging fruit: password resets, for example. (Smaller, focused initiatives also reduce the risk of failure.) From a process perspective, password resets are easy to automate. And since 20–50 percent of all calls to the service desk relate to password resets, automating this process can potentially have a significant impact on end users who just want to log in to their computers and do their jobs.

While the total number of incidents/service requests, the potential impact of restricted access, and ease of automation will all vary by service, type of support, company, industry, etc., the latter is subject to the greatest variability. Executing on a vision is certainly easier said than done, and the same is true of self-service. But don’t let that dissuade you from pursuing the goal. The rewards are just too great.

Case Study: Self-Service and User Response/Behavior

The Danish Ministry of Finance wanted to move its clients—students seeking information about study funds and applications—to a self-service portal. The portal had been available for a while and it was populated with all of the forms, applications, and information students might need. Yet the vast majority of students were still calling in to the Ministry’s service desk. In order to try and change that behavior, the Ministry decided to use its hold message to make students aware of the self-service portal. While students waited on the phone, they would visit the portal and, in most cases, find the answer they sought before the service desk even picked up the call. This initiative went on for a while and, over the course of a few months, students eventually got used to the portal’s better, faster service.


Jesper Østergaard has extensive experience in both the IT services and software industries. In his role as VP of business development for the US-based Advant, Inc., he focuses on self-service and enterprise password management. As managing director for Secorigo, a Copenhagen-based IT services company, Jesper specializes in governance, lean principles, and efficiency programs spanning the entire IT organization.

Tag(s): automation, self-service, service desk, outsourcing


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