Executive summary
East Bay Technologies (EBay) was formerly referred to as Auction Web. EBay is an online market environment. It handles several ranges of goods. It has buyers and sellers who meet over these market place and do shopping and selling of different products respectively. Some of the companies who are members of eBay are Microsoft and IBM companies. Several other small, medium and big companies are members of this online market. Auction web was very small and more of a family idea. It was where small groups of people performed trade and rapidly grew due to the upcoming online marketing demand from sellers and buyers. EBay operated by letting sellers list their products in the market environment. Customers to eBay post their inquiries which are responded to by customer support staff. Due to an increased number of customers using eBay, there is a great demand for customer support staff. eBay management is then analysing the benefits and weaknesses of customer support outsourcing. The work of eBay is minimal since they do not engage in shipping goods neither do they store the good. EBay has a competitive advantage because the company started with internet. Therefore there is no need for adjustments to the internet. Everything is compatible with the internet while other companies which came far much earlier than the internet, have to adjust to the technological requirements. This makes eBay have larger market domination over other companies in the industry
Background information
Performance of eBay
The most critical task for eBay and its staff is customer support. There are several inquiries from customers all over the world. This demand should therefore be countered with sufficient and efficient customer support staff. This staff are not necessarily supposed to sit in an office since they can even respond to customer enquiries wherever they are at any time of the day and night. The customer support staff can even work while at home. Previously the staff used to answer about five inquiries per hour. This is because they were supposed to type the emails. But currently there is an improved method whereby similar problems have been grouped and the common requests of customers are categorised. Then a description has been written of every possible problem. So when the customer request for a particular description the staff just choose the email and append their name on it to make it personal. This has greatly increased the service rate offered to eBay customers. One staff is now able to attend to as many as greater than ten customer requests within a period of one hour. This has made customers about the services they get and has made them stick to eBay. This therefore increases the profitability of eBay and even increases the salaries for the support staff and every company employee.
The mission of the firm
The main objective of eBay is to make the sellers and buyers meet and interact in a digital market space. The member buyers are to see all the products offered by different sellers with their respective prices. They could also view the available bids from other willing buyers. The buyers can then make higher bids to the existing bids in order to purchase the desired product. Then after the buying transaction has taken place the seller organises the shipping activities for products sold. The role of eBay is therefore to respond to email requests and inquires from several people who might want to buy or list their products for sale in the eBay. The eBay get their earnings by charging a listing fee to the sellers. That for every product they list in this website or market there is a certain amount of listing fee to be charge. Another form of revenue is by charging a final fee after the selling transaction is over. This is charge based on the final selling price. They also charged a commission for every sale.
Strategy and goals of eBay
EBay has to ensure that they maintain customers in every way possible since there are so many competitors in the online market. In trying to meet the high demand of customer support services, eBay have to consider outsourcing customer support. Dalton tries to convince the strategic management of eBay to continue outsourcing customer support. This outsourcing is done outside the US, that is, other countries in order to meet the increased customer inquiries and reduce the traffic on their site. She has written a proposal to the management since she is the one in charge of outsourcing. One of the challenges of eBay is trying to minimise business cost while providing very good quality products. They also strive at providing a reliable customer support service. Therefore outsourcing help could perfectly solve the challenges. This is through hiring outside people to help in different types of operations for the smooth running of the business (Schniederjans and Schniederjans, p. 212).
Problem statement
The main problem facing eBay is the issue of attending too many customer requests while there is not enough support staff. Some of the top level managers of eBay sometimes take their time to respond to these requests which could otherwise be outsourced rather than outsourcing management ideas from other big companies. They could be handling issues of security in their site and the online market space. When they allow other people to deal with customer support issues the profitability for the company will increase because the outsource support staff will be able to answer as many responses as they can since they have all their time to work. Most of them could even sacrifice their nights to work since their wages will then increase based on commission. The regular staff and management should therefore leave customer support to be handled by outsourced staff and settle these important issues for the smooth running of eBay. EBay should therefore take the idea of outsourcing into consideration and should continue outsourcing while ensuring that they maintain their trust with the customers as proposed by Dalton.
Situation Analysis
Strengths of customer support outsourcing
Outsourcing greatly reduces cost for the businesses in eBay and any other company. Outsourcing cuts down several costs which are normally incurred in hiring and even supervision the employees. The staff who are outsource will work to improve their performance and build their reputation. They therefore work harder even without any supervision, this hence reduce the expenses which could have been used for supervision. By outsourcing, eBay will be having a good time to focus on more critical issues affecting the company. Since customer support will be mainly outsourced the existing company employees could be involved in other activities and duties which demand a greater commitment and expertise. This outsource staff will be handling repetitive tasks and therefore they do not require much skill. The staff could perform their tasks whenever they are.
The idea of outsourcing saves on cost because the labour outsourced is normally cheap. These people normally do not have any occupation and so they tend to accept small wages. Since the customer support services do not require any professional skill, the labour is cheap. The people involved therefore have no expertise and sometimes idle. So when they get this employment to them it is an opportunity in order to get their basic needs. Outsourcing labour from different countries creates diversity of eBay. They got ideas from several place of the world. They therefore get many sources of decision making. EBay also get marketed to these regions of the world where their customer support comes from. Outsourcing also creates global network work forces which make the company very competitive and known everywhere. Outsourcing also eliminates the issue of international barriers. Outsourcing will also make the less paying jobs to be done overseas and therefore the staffs in the US settle for better paying jobs. It has also been seen that outsourcing reduces the expenses associated with payroll. This will therefore increase the income of the company.
Outsourcing in eBay will greatly enhance the level of production. It will also improve their services which are offered to customers. This is because all the requests will now be able to be attended to. Since the customer support will increase the time that the customer takes in waiting for the feedback will be reduced to a great extent. The customer service will be reliable an available throughout. Thos will therefore make the customers happy and more sellers and buyers will prefer using eBay to other competing firms. Buyers will be able to get their goods faster because the communication services to them will be faster. Outsourcing will also make the work load for regular staff to be light easy, and enjoyable. The current staffs are working overtime to meet the customer demands. With outsourcing regular staff will be released from these overtime working. This is made possible since the work is now shared outside to the outsourced customer support. This will therefore make eBay profit to increase since mm ore sellers will now be posting their products and so the listing fees increase. The outsourced employees works on a contractual basis and they sign an agreement when they are employed. They should agree to work by the set terms and policies of eBay.
Phone calls are also used to settle customer inquiries. By outsourcing these services it could give time to the regular staff of eBay to concentrate on other technical issues. These issues could be checking whether the goods listed are patented or not and whether some of the good are illegal. The critical issues also include detecting fraud and finding way to prevent fraud for the customers to build trust on eBay. Sometimes top eBay officials also attended some of the requests from the customers since they are a times so many that they cause traffic in the site. Outsourcing will therefore give time to these strategic managers of eBay to make critical decisions affecting the company and its business operations. Their work should be in terms of leadership they should be dealing with expansion issues and even the salary for its employees. They should also be organising training for employees and recruiting new ones. Rewarding the current employees is also a key factor which should not be overlooked. The management should be making sure that their employees are well rewarded and happy to work. They should be dealing with how to improve the working environment of its staff. Also the staff in the marketing department should be finding new marketing strategies on how to approach the market in order to maintain their current position in the market (Hitt, Ireland and Hoskisson, p. 127).
Customer support outsourcing will save money. By outsourcing these services to other countries other than the United States, there will be a lot of money saved for the salary of the company employees. If eBay is going to continue outsourcing staff from developing countries then little money is used on wages as compared to the regular staff. This is because it is cheaper to hire employees from other countries. The minimum wage rate for these countries is far much lower than in the US. It could the salary for one staff in the US will gather for three people in other countries. EBay will therefore get a lot of money saved which could be used for any advancement and to better the salary of regular employees. The company will therefore have enough money to reward its staff and to organise conferences and other training activities for its employees. It will also be able to offer extra allowances to the strategic team and directors of eBay. It is therefore easier and cheaper to maintain employees outside the US than those living in the US. This would greatly save eBay a lot of money which could be used to improve the services offered to customers. Since the company should always keep abreast of technological advance and this needs a lot of money. The company will therefore be comfortable to meet the rapidly growing technology. The money will also maintain the company’s expenses in terms of energy bill and other bill like the browsing bills.
Since the labour outside is cheap eBay is hence able to hiring quite more customer support staff to meet the customer demands. This will ensure that the requests posted by the customers are always attended to because there is enough support staff. The main aim of any company is to be outstanding and meet the requirements of these customers. Enough outsourcing staff will therefore make eBay a reliable online market which is always available to listen and respond to several inquires. These services are hand saving them time and money which could be used for other critical issues. This money could be used in other projects so as to improve the profitability of eBay.
Another thing brought about by customer support outsourcing is the relationships built with other nations. EBay will improve its international relations when it outsources staff. This is because they will be having customer support staff from almost all the nations. The economic relations between eBay and the United States as whole and other countries where staff are outsourced will be strengthened. Where eBay hire staff for offering the customer support services from other countries probably developing countries, the economic conditions of these outsourced countries tend to improve. They do this because of cheap labour since in the developing countries the minimum wage rates are low. The developing countries therefore have a chance to interact with high standards nations like the US. They can then have a privilege to share business and investment ideas which could improve their economic situation in one way or the other. They not only borrow business ideas and investment ideas but they also get financial aids from the country. They get donors for some projects in their country which could then boost the country’s economy. They establish long term links.
EBay can fund some of the projects in the developing countries for the purposes of marketing and promotions. Most of the companies involve themselves in giving donations as a form of promotion. In doing that people will tend to trust and wish to be associated with eBay, this will then earn them more customers making the company to prevail. The company can sign agreements with other countries in order to become allies in the business environment. In outsourcing eBay will be making itself known to almost every part of the universe. This is therefore a great marketing strategy for the expansion of eBay.
Weaknesses of outsourcing to eBay
However there are some challenges associated with eBay which the strategic team should be aware of and put them under consideration. Customer support outsourcing has some disadvantages. Some of the disadvantages include; the hidden cost in that eBay will have to provide the insurance cover to the outsourced staff. The fee involved in signing of the contracts seems to be minimal but the costs involved matter in a business. These costs may be looked down upon but they really count. It will form a fraction of eBay’s expenses. Use of media in searching for the person to be given involves using the eBay funds to finance the advertisement (Singh 298).
Customer support outsourcing also poses various risks and threats to security. Outsourcing involves giving the information of the customers to other people. This may compromise the safety of the customers and the information about them. Because eBay involves the use of credit cards the customers may become victims of crimes associated with their credits cards. These types of crimes may involve forgery and fraud. However eBay should provide mechanisms to which the customer is protected from such risks. Since the customer outsourcing company has agreed amount of money to be paid for the work, they would not be able to do most of the work to perfect and it will lead to inefficiency in implementing and marketing of the eBay. The management team should find ways of ensuring that the customers are served timely and with good customer communication relations.
Problems of communication may also arise when the outsourcing company is handling the customers. They may not respond to customers as the regular staff of the company could have done. The person may not have all the information about eBay and might mislead the customers about the services they offer. Some customers may need vital information about an issue and they may not have the information at hand. Outsourcing of customer support may lead to eBay being tied to the outsourcing company’s well being. The financial status of eBay would be determined by the outsourcing company. If the company makes a loss it will affect eBay in one way or the other. This is because the outsourcing company will determine the stand of the company. The management should therefore look at these issues and the outsourcing staff selection should be done carefully.
Opportunities in Outsourcing
Outsourcing has been seen to solve the problem of unemployment. This is because the outsourced staff benefits as well as eBay. This has been witnessed to happen even in other US companies which normally outsource staff from China. This helps a lot since it offers a wide range of opportunities to the jobless. This in turn reduces crime rates and death rates which happen because of poverty. Outsourcing also gives opportunities to college and university students so as to work part time. This therefore earns them a good pocket money enough to maintain themselves and some even their families and become independent. This cuts across the colleges and universities around the globe. This therefore lowers the rate of unemployment among the young people across the world. In other words customer support outsourcing offers globalisation in employment.
The employment provides a source of earning to the families living in poor financial conditions. This will greatly boost the economic positions of several countries where the different staff are outsourced. Most of the population will be able to get employment and therefore support themselves rather than living in poverty and crime. Since the company will be having many staff from different countries it is a marketing strategy of its own. This is because almost everyone or someone they know will know about eBay so they tend to build trust in it. In case they want to perform trade over the web then they will not easily go for another company but eBay.
Customer support outsourcing for eBay is a brilliant idea since it will increase the economic stability of the world at large. By giving employment to the unemployed population in many countries, eBay promotes the economies status of these countries. EBay will attract many investors in their country therefore the economic status will rise. There will be low or no cases of unemployment at all in the United States of America. Since eBay will be performing very well and having very many customers its profitability will rise. The US government will hence increase the tax rates for this company. The government revenue will then increase making the country very stable. A country with well performing companies has a very stable economy because of the taxes levied to these companies.
The amount of tax levied to eBay makes a great percentage of the government revenue, which will ensure continuous funding of different projects for the smooth running of the country. This may include roads and rail systems and even communication services. Therefore there will be fast and reliable transportation in the country and faster communication channels. Improved infrastructure of a nation attracts a lot of foreign investments hence increasing the country’s revenue at large. Other people who may not be employed by eBay could also get their salary rising because of the existing economic status of the country. This will therefore improve the living standard of almost all the people in the country. EBay through its outsourcing will be able to network with many people and even companies. This will improve its coverage. Very many companies would want to list their products with eBay since it is very much widespread.
EBay will have enough time to focus on their internal affairs when they outsource customer support services. These internal matters could be more demanding and more critical than customer support services. These support services should therefore be acquired from outside eBay. Currently the customer support staff for eBay makes two-thirds of the entire company employees. If these services are therefore outsourced the regular staff shall be having good time to settle internal matters. It has been seen that most of the employees spent the whole time of their working hours attending the customer requests. The customer requests which are responded to are issues with selling. Bidding, product categories and bidding, it also involves pricing and legal issues on listings. These are therefore very obvious procedures and policies when known. There is nothing technical and therefore people could be trained to respond to these requests since almost all the descriptions have been computerised. It is for the customer support staff to match the requests with a corresponding response already written and personalise the send to the customer (Bragg, p. 139).
Threats associated with Outsourcing
Some of the outsourced customer support employees may be criminals and other could be having malicious intentions. Since there is no much monitoring and surveillance when the support staffs is attending to the customer request several types of crimes could probe up. The human resource team for eBay should therefore be keen in recruiting the outsourced customer support staff. The information provided by the buyers to the site is in most cases sensitive. It hence a great challenge for eBay to protect the customer information. Policies should be put in place to safeguard this sensitive information and legal issues enacted upon it. An employee found to be misusing any customers’ information should receive a thorough punishment from eBay so as to prevent others from committing the same criminal activities. Ensuring that the information is safe will build trust among the customers on eBay and its staff. This will therefore increase the number of customers using eBay and in turn increase the company’s profitability. The number of buyers and sellers will rise therefore increasing the amount of revenue earned by eBay.
Dalton raised the issue of trust and safety. She asked herself several questions about trust and safety. She wondered the amount and kind of trust which could be safely outsourced. Rob Red who headed the trust and safety group had told her and other members of the team that there is a high probability risk involved in outsourcing staff. The management team should therefore be prepared for the risks involved in this. Bank details of several customers, the credit card numbers and their social security numbers are exchanged on eBay. The outsourced customer support employees are accessible to these sensitive details of customers. Therefore should enact critical policies in order to safeguard the information of their customers.
She also wondered how eBay would determine the credibility and trust of the vendors who are to be outsourced. Therefore the recruitment team should be very careful in taking up the support staff. They should look into the past records of the potential support staff. They should then filter out those with criminal record since they cannot be trusted with the customer support service. This should be done since outsourcing will have several benefits and so if security is taken care of then eBay will be doing very well.
Another problem which has been witnessed to be brought about by outsourcing is when the outsourced staff uses the company facilities for their personal stuff. The outsourced staff will be provided with personal computers and internet access. The can be busy attending their personal businesses over the internet and neglecting the customer support service. EBay should therefore implement job surveillance in these employees to prevent this from happening. Several companies are facing the problem of staff misusing the company’s facilities for their own advantage. This can affect eBay in so many ways. The customer request may not be attended to on a timely manner. The customers may then not be satisfied with the services offered by eBay and may quit working with it. This will lead to reduction of the company’s profitability and may lead to several staff losing their jobs since the company may lack finances to meet their salaries.
Vrio Analysis on Outsourcing
Technological advancement should be put in place in order to keep abreast of the demands of the customers. EBay is trying as possible to go as per the current technology. Some of the available technologies include email marketing, search engine optimization and even instant messaging. Improved social media and pay per click applications are also available. There is also affiliate marketing and enhanced social media. Some applications to enhance customer interactions will be achieved through web 2 technologies. This will enable the customer’s voice to be heard and be responded to by a monitor. This can also be responded by the customer support staff. This can be achieved with the introduction of blogs and advanced platforms for digital marketing. The current monitors will be integrated into ore channels and devices. This will greatly enhance the marketing processes. Social websites like facebook has also provides an opportunity for different companies to market their services to those who access the site. The information content on these sites should be eye-catching in order to get attention of the audience. Search will continue to be the launch element for the online applications. Technological advancement to search engine will be made to enhance the customer searches and acquisition of the necessary information. Users will be using these searches to get updated information.
Google is the major search engine for most online application. It will always be improved to meet adapt the changes in technology ad to meet the customer requirements. These advancements in technology will improve the interaction of the customers. Several buyers will be able to meet several other sellers and they can also be able to compare prices of various commodities. Customers can always choose the language they are familiar with. This is possible because digital information about the eBay activities has been translated to many languages. This has been done in order to reach all the targeted audience. Digital marketing has made information about a company’s products and services to reach different targeted markets of diverse languages and cultural practices eBay can therefore market itself by using other websites (McIvor, p. 145).
Customer support outsourcing will gather for several cultural and linguistic diversities. It can be made possible that customer requests are made in the language the customer understands and should be directed to customer support staffs who also communicate with the same language. Every company’s main objective in enabling good communication to the target markets of different languages and cultural matters is to get a higher return on investment. Also through improved international communication and promoting the cultural practices of the target market. This will make the company’s services to be accepted by the target market hence enhancing its profitability and return on investment. In case of language differences a language translator to enhance communication to the targeted audience. This ensures the company communicates the right message to the targeted market.
The customer support staff should understand the cultural practices of both the source and targeted markets hence making them communicate well to the customers. The information should always be available in almost every language so that customers from different language diversities can be attended to in the language they most comfortably understand. The company should therefore take Dalton’s idea on the continuous customer support outsourcing.
Recently there has been several advancement of technology. This enhance several practices which are digital no exempting the online/digital marketing. This is therefore part of eBay. Several improved software and hardware are developed and implemented. This has a great impact on online marketing and communication. It is therefore evident that these trends of technological advancements continue to the future. There will be advancements in the use of internet. The data bundle transmitted will be in different formats. A combination of voice, text, video and graphics is transmitted within one cable. The use of fibre optic as a transmission media has brought major advancement to the use of internet and in turn to digital marketing. Information in this cable is transmitted with a very high speed approximately the speed of light. The information will therefore reach the targeted market within the stipulated time (Barney and Hesterly, p. 321).
Alternative Analysis
EBay uses Kana email management system. This solved the problem of answering identical requests. It makes easy the work of the customer representatives. This is because they could only add a few personal details to the message and post it to the customer. This technology greatly saved the time since the response time was made short. Instead of the support staff typing all the procedures may be in listing or other requests, there are already stored description which could be edited a bit to fit a particular customer request. It therefore increases the number of responses per hour. Kana has done several advancements to eBay and even the idea of outsourcing came from implementing this system. Even after using Kana to fasten the customer support service, eBay still needs to outsource staff for better services because it seems they could not attend to all the customers within the required time. This system could then be improved to handle more other request instead of outsourcing the customer support staff.
The introduction of 3G and 4G mobile phones and even iPhones, will also enhance digital marketing and even digital responding to various customer request. The entire possible request could be automated and their respective descriptions provided to answer the customers’ requests. With these cellular phones buyers and sellers can access eBay at any time of the day irrespective of where they are. These devices can store several types of content e.g. multimedia messages, sound, video data objects. Customers can get access to information wherever they are and can even shop. These phone has very efficient internet applications and search engines and can therefore buyers can download videos of the products offered by different sellers. This technology can therefore be used to answer the customers on behave of the customer support staff.
The customers will therefore get responses to their requests at a faster and desirable speed. There will be a greater bandwidth to enable very large amounts of information to be carried. The speed is also very fast hence the speed of communication to the customer is enhanced. Customers will be able to get up to date information and enable them to decide on their shopping. Buyers will be able to access the different products and services offered by various sellers. They can therefore compare prices and qualities of a variety of products before they make their bids for a particular product. This could therefore eliminate the idea of outsourcing.
Recommendations
EBay should continue outsourcing the customer support staff since it will make the company improve its uptime and availability. This is the desire of every customer that the services he/she needs should be available. The requests made by customers determine the number of transactions which will be done on eBay. The inquiries should always be attended to in order to retain the visiting customers. Once a customer builds trust with eBay it will be rooted there and very difficult to take them out of the company. So the main concern here is to keep the customer server as fast as possible and let them be satisfied of the response and be free to ask other questions. It is always said that a first impression counts. Therefore when the customer is inquiring it could possibly be the first time they are on eBay and so they should have a nice reception for them to keep remembering the company. This reception means availability for a quick response to the questions they asked.
Outsourcing will therefore increase service availability. This is possible there will be enough staff to attend to the upcoming requests hence no customer inquiry will be left out. This will also increase the number of people using eBay. When there are many clients being served in the site it means that many people are using eBay and therefore there is increased profitability. Customer support should be taken well care of because this is what makes eBay to be in existence. The company has to strive to get good responses from these customers for their good and consistent services. Customers have to build trust with the company so as not to lose them. EBay should therefore find a nice way of protecting personal information provided by the customers from any unauthorised access. The information provided by the sellers and buyers is in most cases very sensitive since it might include bank details, credit card and debit card numbers and other personal details. The information should therefore be properly handled so as not to be used for fraudulent purposes or any other purpose without the consent of the customer.
Implementations
The reputation of the company will also be lowered since customers will be complaining of poor services. This will tend to shy away other potential customers to eBay. The management team for eBay should therefore work hard to ensure that the outsourced team work and be available all the time as requi9red by the customer. They pay the outsourced staff on commission basis such that they work hard to get a higher commission. The human resource management of eBay should also work to ensure that the staff are rewarded and motivated. It has been seen that a motivated team is more productive than a less motivate or without motivation at all. They could hold conferences to appreciate them and reward them for their reputable performances.
All in all it has been noted that the benefits associated with customer support outsourcing for eBay far much outweigh the challenges involved. Therefore eBay should go ahead and implement the idea of both domestic and offshore customer support outsourcing. In order to curb the discussed challenges effective security measures and policies should be put in place to ensure that the sensitive information provided by different customers is safe. This will improve the trust of customers with eBay and therefore increase its profitability. The support staff selection is also an important task which should be performed to minimise crime associated with customer details.
Works cited
- Barney, Jay and Hesterly William. Strategic Management and Competitive Advantage MyStratLab Series. 3rd ed. New York: Prentice Hall, 2009
- Bragg, Steven M. Outsourcing: a guide to selecting the correct business unit—negotiating the contract maintaining control of the process. 2nd ed. New Jersey: John Wiley and Sons, 2006.
- Hitt, Michael A. R. Ireland Duane and Hoskisson, Robert. Strategic management:Â competitiveness and globalization : concepts & cases. New York; Cengage Learning, 2008
- McIvor, Ronan. The outsourcing process: strategies for evaluation and management. Cambridge: Cambridge University Press, 2005
- Schniederjans, Marc J. and Schniederjans, Ashlyn M. Outsourcing management information systems. Hershey: Idea Group Inc (IGI), 2007
- Singh, Manikant. Strategic Management and Competitive Advantage. New York: Global India Publications, 2008