University Case Study: Pagoda.com Outsourcing Analysis

This case study examines the outsourcing decision for Pagoda.com's online help desk. The analysis compares the costs of the current in-house operation with a proposed outsourcing contract in New Delhi, including personnel, equipment, and variable costs. The report considers factors such as cost-effectiveness, quality of output, and delivery capabilities, using a weighted scoring system to evaluate the options. The study recommends outsourcing to the New Delhi contractor based on lower costs and a higher satisfaction score. Performance measurements, including response time and customer satisfaction, are proposed to ensure service quality. The conclusion emphasizes the importance of monitoring key performance indicators to maintain efficient service delivery.

Running Head: PAGODA CASE STUDY 1
Pagoda Case Study
Student’s Name
University

PAGODA CASE STUDY 2
Contents
Introduction......................................................................................................................................3
Analytical comparison of outsourcing against current method.......................................................3
Factors to be considered in selecting an option...............................................................................4
Recommended Course of action......................................................................................................4
Performance measurements.............................................................................................................5
Conclusion.......................................................................................................................................5
References........................................................................................................................................6

PAGODA CASE STUDY 3
Introduction
Decision making is very critical in business. The make or buy decision is dictated by
associated costs and client satisfaction rates. The make or buy decision manifests in situations
that need a decision on whether to create or outsource. This report compares two options, factors
to be considered in choosing an option and recommends the way to go for Pagoda.com
Main Issue- a decision problem to choose between creating and outsourcing.
Analytical comparison of outsourcing against current method
Total cost for current online help desk
Personnel costs: technical experts 40*40,000 = $1,600,000
Supervisors 3*70,000 = $210,000
Equipment cost: 4*2000+20*1000 = $28,000
Variable cost: 1.50*800,000 = $1,200,000
Total = $3038000
Total cost for the New Delhi contract
Fixed cost = $1,500,000
Charge = $0.50*800000 =$400,000
Total =$1,900,000
The total cost analysis shows that the current online help desk cost is $3,038,000 which is
more than $1,900,000 which would be spent when outsourcing. Thus, the current situation is
more expensive (Meredith, 2019).

PAGODA CASE STUDY 4
Factors to be considered in selecting an option
The following are some of the factors other than cost that Pagoda should consider in
developing its supply chain management; Delivery to customer demands and requirements and
the quality of services offered (Qi, 2017).
The table below shows various factors, their weights, and the weighted point evaluation
system calculations.
Performance
dimension
Criteria
weights
New Delhi
proposal (out of 5)
Current
solution (out of 5)
Cost friendliness 0.2 4.5 1
Quality of output 0.4 3 3
Delivery 0.4 4 2
total 1.0
Scoring scheme = 5 – Excellent 4 -Good, 3 – Average, 2 – Fair, 1 – Poor.
Score for New Delhi = (0.2*4.5/5) +(0.4*3/5) +(0.4*4/5) = 0.74
Score for Current solution = (0.2*1/5) +(0.4*3/5) +(0.4*2/5) = 0.44
Recommended Course of action
Pagoda.com should subcontract its help desk since New Delhi Contractor offers the
function at a lower cost. Pagoda.com does not have to worry about quality control since the help
desk is online, and they can monitor performance indicators from their side. The communication
problem is also managed as all personnel speak English. Other risks like a poor choice of a
supplier are eliminated, thus making it feasible to use the New Delhi proposal (Ross, 2016).

PAGODA CASE STUDY 5
From the selection criteria table, the New Delhi plan has a satisfaction score of 74% compared to
the current one, which is 44%.
Performance measurements
The statement of work should have performance measurements, such as the speed of
replying to customer issues. Currently, customer issues are solved within 10minutes; the
contractor should, therefore, angle customer issues within 10 minutes or less (Bozarth &
HandField, 2019). Client satisfaction should also be measured frequently, and the value should
never drop below the current one. All customer issues should be handled; no customer should be
left pending at the close of business each day. There should be efficient delivery of the services
to the customers. Failure to meet these conditions, the supplier may be requested to withdraw
from the contract to enable a more efficient one to take over.
Conclusion
Pagoda.com should outsource the online help desk but remain vigilant to monitor key
performance and service delivery Indicators.

PAGODA CASE STUDY 6
References
Bozarth, C. C., & HandField, R. B. (2019). Introduction to Operations and Supply Chain
Management. Pearson Education inc.
Meredith, J. R. (2019). Operations and supply chain management for MBAs. Wiley.
Qi, Y. a. (2017). The impact of operations and supply chain strategies on integration and
performance. International Journal of Production Economics, 162--174. Retrieved
March 26, 2020
Ross, D. F. (2016). Introduction to e-supply chain management: engaging technology to build
market-winning business partnerships. CRC Press.