This Article Full Text (PDF) e-companion References Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Download to citation manager Citing Articles Citing Articles via HighWire Citing Articles via Google Scholar Google Scholar Articles by Ren, Z. J. Articles by Zhou, Y.-P. Search for Related Content

Call Center Outsourcing: Coordinating Staffing Level and Service Quality

School of Management, Boston University, Boston, Massachusetts 02215
Michael G. Foster School of Business, University of Washington, Seattle, Washington 98195
ren{at}bu.edu
yongpin{at}u.washington.edu

In this paper, we study the contracting issues in an outsourcing supply chain consisting of a user company and a call center that does outsourcing work for the user company. We model the call center as a G/G/s queue with customer abandonment. Each call has a revenue potential, and we model the call center's service quality by the percentage of calls resolved (revenue realized). The call center makes two strategic decisions: how many agents to have and how much effort to exert to achieve service quality.

We are interested in the contracts the user company can use to induce the call center to both staff and exert effort at levels that are optimal for the outsourcing supply chain (i.e., chain coordination). Two commonly used contracts are analyzed first: piecemeal and pay-per-call-resolved contracts. We show that although they can coordinate the staffing level, the resulting service quality is below system optimum. Then, depending on the observability and contractibility of the call center's effort, we propose two contracts that can coordinate both staffing and effort. These contracts suggest that managers pay close attention to service quality and its contractibility in seeking call center outsourcing.

Key Words: call center outsourcing; staffing; service quality; call center contracting
History: Received: October 31, 2004;

This article has been cited by other articles:

				O. Baron and J. Milner Staffing to Maximize Profit for Call Centers with Alternate Service-Level Agreements Operations Research, May 1, 2009; 57(3): 685 - 700. [Abstract] [PDF]

				L. X. Lu, J. A. Van Mieghem, and R. C. Savaskan Incentives for Quality Through Endogenous Routing MSOM, April 1, 2009; 11(2): 254 - 273. [Abstract] [PDF]

				S. Hasija, E. J. Pinker, and R. A. Shumsky Call Center Outsourcing Contracts Under Information Asymmetry Management Science, April 1, 2008; 54(4): 793 - 807. [Abstract] [PDF]

				O. Z. Aksin, F. de Vericourt, and F. Karaesmen Call Center Outsourcing Contract Analysis and Choice Management Science, February 1, 2008; 54(2): 354 - 368. [Abstract] [PDF]