OPER 1160: RITS Case Analysis - Insource or Outsource Decision

This case study analyzes Rice IT Services (RITS), an ISP, and its decision to develop an efficient support desk. The assignment evaluates whether RITS should outsource its help desk to Makati or develop it in-house. The analysis compares the total costs of both options and utilizes a performance matrix to assess qualitative factors, transforming them into a quantitative model using a rating scale and weighted matrix. The study also includes benchmarking analysis to improve efficiency. Ultimately, the study recommends outsourcing the service, citing cost savings, improved staff, technology, and scalability, and provides key performance indicators (KPIs) such as customer waiting time, average handle time, first call resolution, and customer satisfaction to measure the effectiveness of the help desk.

Course Name: Introduction to Supply Chain and Operations
Management
Course No: OPER 1160
Title: Case – Rice IT Services
Group Case Project
Due Date:
Submission Date:
Group Members
Executive Summary

The case is on a company named Rice IT Services (RITS) which is an Internet Service Provider (ISP) The
organization is planning to develop a support desk that rapidly figures out where the clients' concern lies and
gets it fixed. A company named Makati has approached for support desk capacities. They are situated in North
Africa, work expenses would be a bit of what they are in Canada. The main purpose of this assignment is to
understand the situation and identify whether outsourcing to Makatoi is beneficial or doing an efficient help
desk in the company itself.
The analysis is on the basis of total cost that both the plan proposes and also performance matrix. The matrix is
a qualitative technique to identify whether in house arrangement is suitable or the company should opt for
outsourcing. In Fact here we analyse a rating scale on the performance measure that turns a qualitative
technique to quantitative one. Finally, there is a benchmarking analysis to make the process efficient.

TABLE OF CONTENTS
Introduction 4
Insource or Outsource 4
Total Cost Analysis 5
Four Performance Dimensions Criteria 6
Weight Criteria definitions: 6
Rating Scale with Weighted Matrix Model 7
Final Recommendation 8
References 11

Introduction
Insource or Outsource
Rice IT Services (RITS) is an Internet Service Provider (ISP) that takes into account singular shoppers and
private ventures who require an elevated level of service and are eager to pay a premium for it. In particular,
RITS offers cutting edge office applications and web-building programming and configuration, just as a lot of
secure storage space and quick access utilizing its rapid servers. The region it serves is Ontario and east. It
offers its service in English and French. The company is doing a qualitative and quantitative analysis to decide
whether they should do some inhouse arrangement to make the help desk efficient or should outsource it to a
company named Makati.
Total Cost Analysis
Yearly Costs - Present vs Proposed Contact Centre Alternatives (Cost Comparison)
Current Online Support Centre (Insourcing) Makati Proposal (Outsourcing) Difference
Insource-
Outsource
Cost Head Annual Cost
(A)
Cost Head Annual Cost
(B)
Personnel
Costs
50 *Salary &
benefits ($65,000
each)
$3,420,000. Fixed Cost $2,400,000. $1,020,000.
2 * Supervisors
($85,000 each)
Equipment
Cost
3 * Servers ($8,000
each)
$24,000. N. A $0 $24,000.

28* PCsi
($700 each)
$19,600. N. A $0 $19,600.
Variable cost
800,000 customers*($1.15 per
customer)
$920,000 800,000 customers*
Variable cost ($1.07
per customer)
$856,000 $64,000
Total $4,383,600 $3,256,000 $1,127,600
Four Performance Dimensions Criteria
As indicated by scarcely any researchers the accompanying criteria are prescribed to assess whether to
redistribute a service can be the accompanying ones:
Technology: Technology alludes to equipment, programming, correspondence, and frameworks.
Even though the insource arrangement as of now offers the normal support level, as technology develops, extra
speculations are normal. The following specialized improvement to the sort of service is the execution of "Talk
Bots", in this way the re-appropriating arrangement can profit by this technology that is as of now accessible for
use. (Halvey, & Melby, 2017)
Staff: Hiring and keeping a talented tech workforce is essential for Help Desk Operations.
The in-house arrangement has some level of challenge related with the Staff and Training, while the
redistributing arrangement has favourable circumstances to look for and hold their workforce.
Consumer loyalty: Customer fulfilment is key for business achievement. Even though the redistributing
expectation to learn and adapt can affect the consumer loyalty during the progress, their reality class procedure,
measurements and experience can use this key execution pointer with constant upgrades furnished with better
controls. (Johnson & White, 2010)

Capacity: Capacity is some way or another restricted for the in-source arrangement and would require interests
in space, staff and technology for the extension. The redistribute arrangement, on the other hand, is adaptable
and gives costs points of interest in scale. Relative Weighting and Matrix
Weight Criteria definitions:
● Technology is weighted as 20% because technology is basic for the business and can result and extra
expenses;
● Staff is spoken to like 20% of the general weighted normal because of the degree of specialization
aptitudes and the turnover associated with this sort of work;
● Consumer loyalty has a similar load of Technology and Staff because, even though it is a measurement
to communicate the achievement of the service, it is a subjective worth supported by other subjective
things;
● Capacity is weighted as 10% because it is significant however there is no genuine prerequisite on the
radar for an extension, yet we should be set up for;
● Financials have the greatest effect for the business; subsequently, it is weighted as 30%.
Rating Scale with Weighted Matrix Model
In-House OutSourcing
Criteria Rating 1 (low) to 5 (high)
RA
W
Weig
hted
RAW
Weighte
d
Technology
- The In-House arrangement is rated as 3 since it at present conveys
a palatable service level with the technology accessible
- The Outsourcing arrangement gets a rate 5 since it gives world-
class technology and can keep up it except for the following years.
3 0.6 5 1

Staff
- The In-House arrangement is rated as 3 since it is available some
test related to the enlistment and information the board;
- The Outsourcing arrangement gets a rate 5 since it furnishes an
adaptable body shop with exceptionally talented staffing. As a
centre competency, the provider has the correct ability to oversee
and move information.
3 0.6 5 1
Customer
Satisfaction
- In-House Customer Satisfaction rates are agreeable (3) and
dependent on their premises and qualities.
- Outsourcing arrangement is rated as (4) since some degree of
vacillation is relied upon during the progress to another group
3 0.6 4 0.8
Capacity
The in-House arrangement is rated as 4 because, even though the
staff is offering a decent assistance level, the staff is by one way or
another restricted.
The outsource arrangement rated as 5, is entirely adaptable and
gives costs points of interest in scale through a body shop.
4 0.4 5 0.5
Financials
- The In-House arrangement was rated as 3 since it has
demonstrated to be costly contrasted and the Outsourcing choice.
The Outsourcing is rated as 4. The money related examination
doesn't sound too huge.
3 0.9 4 1.2
3.1 4.5

Final Recommendation
We propose to Outsource the service, it thinks that the Help Desk isn't the centre business of RITS. Other than
the way that the re-appropriating arrangement can give a cost sparing of 20% every year, it likewise gives better
staff, ability and technology that are essential for a quick extension of the services whenever required.
(Wollenhaupt, 2020) As far as quality, it can give better instruments and procedures as a world-class
organization right now can develop the service line through ceaseless improvement. ("Benchmarking in total
quality management", 2017)
Benchmarking Performance Measures
1. Customer waiting time (CWT): This metric that gives a general efficiency. Average handle time
(AHT): The present service level measurements from RITS shows that the Average Handle Time
(AHT) is at its best, representing 6 mins as it were.
2. First Call Resolution (FCR): Although AHT is a metric that assists with improving the presentation of
the service, as per (McLean-Conner, (2012), para. 8) 90% of the customers revealed high satisfaction
rates when they can resolve the issue in the first time/individual contact. (Gunasekaran & Steven White,
2013)
3. Customer Satisfaction (CSAT): Customer Satisfaction (CSAT) is a
subjective input given electronically before the finish of each talk
meeting, where customers assess 3 distinct measurements: Staff Quality
and Courtesy, Technology and usability, lastly their general satisfaction.
(Chicu, Pàmies, Ryan & Cross, 2019)
KPI # Type Criteria and SLA (Service Level Agreement) Math

1-
Customer
waiting
time
(CWT)
Quantitat
ive
"Customers are relied upon for prompt replies when
a meeting is started in the framework by a customer.
An accessible operator must invite the customer in
under 2 mins. Rating technique:
1- More than 3 mins
2- Between 2.5 and 3 mins
3- Between 2 and 2.5 mins
4- Between 1 and 2 mins
5- Less than 1 minute"
This is measured by
isolating the complete time
customer holds up in line
by the all outnumber of
talks replied.
2-
Average
handle
time
(AHT)
Quantitat
ive
"KPI constraint: (less than 6 mins) Rating method:
1- More than 10 mins
2- Between 8 and 9.9 mins
3- Between 7 and 7.9 mins
4- Between 5 and 6.9
5- Less than 5 mins"
This metric is the
measurement by
partitioning the all-out
time callers spent on a
visit meeting by the
absolute number of talks
replied.

3- First
Call
Resolution
(FCR)
Quantitat
ive
1- Less than 20%
2- Between 21% and 40%
3- Between 41% and 60%
4- Between 61% and 80%
5- Above 81% "
This measurement is a per
cent proportion
determined by partitioning
the aggregate of visit
finished as First Call
Resolution (FCR) by the
aggregate of talks
addressed month to month;

4-
Customer
Satisfactio
n (CSAT)
Qualitati
ve
3 components of value assessment (1 to 5 rating)
● Staff Quality and Courtesy
● Technology and Call Center convenience
● By and large satisfaction
The month to month ascertain measurements are
confirmed concurring the accompanying criteria:
1- Below 1.5
2- Between 1.6 and 2.5
3- Between 2.6 and 3.5
4- Between 3.6 and 4.5
5- Above 4.5"
"This measurement is
determined to utilize the
weighted average of the 3
answers given toward the
finish of each talk
meeting. When a few
customers skirt this
progression, the
administration summarizes
all the CSAT rates replied,
and separate by the
aggregate of customers'
cases replied. The
outcomes will run
somewhere in the range of
0 and 5 and will decide the
degree of customer
satisfaction" (Kumar &
Anderson, 2017)
1.
5= Excellent 4= Good 3= Average 2=Fair 1= Poor

References
Banks, D., & Roodt, G. (2011). The efficiency and quality dilemma: What drives North African call centre
management performance indicators? North African Journal of Human Resource Management, 9(1), 55–71.
https://doi.org/10.4102/sajhrm.v27i4.331
Chicu, D., Pàmies, M. del M., Ryan, G., & Cross, C. (2019). Exploring the influence of the human factor on
customer satisfaction in call centres. BRQ Business Research Quarterly, 22(2), 83–95.
https://doi.org/10.1016/j.brq.2018.08.004
Halvey, J. K., & Melby, B. M. (2017). Business Process Outsourcing : Process, Strategies, and Contracts (Vol.
2nd ed). Hoboken, N.J.: Wiley. Retrieved from https://search.ebscohost.com/login.aspx?
direct=true&db=nlebk&AN=190523&site=eds-live&scope=site
Kumar, S., Aquino, E. C., & Anderson, E. (2017). Application of a process methodology and a strategic
decision model for business process outsourcing. Information Knowledge Systems Management, 6(4), 323–342.
Retrieved from https://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=28008597&site=eds-
live&scope=site
Benchmarking in total quality management. (2017), 10(3). https://doi.org/10.1108/bij.2003.13110caa.003
Gunasekaran, A., & Steven White, D. (2013). Performance measures and benchmarking in business innovation.
Benchmarking: An International Journal, 16(3). https://doi.org/10.1108/bij.2009.13116caa.001
Johnson, B., & White, M. (2010). The Importance of Multiple Performance Criteria. Risk Analysis, 30(7), 1099-
1115. https://doi.org/10.1111/j.1539-6924.2010.01405.x
Wollenhaupt, G. (2020). Logistics: To insource or outsource?. Supply Chain Dive. Retrieved 30 March 2020,
from https://www.supplychaindive.com/news/logistics-insource-outsource/571612/.