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Improving customer satisfaction in
infrastructure outsourcing
Influencing the different handshakes to increase customer satisfaction
This is the Master thesis Part-time MSc General Management of
Authors: ing. Mark van Tilburg
bc. Willem Kuilman
Breukelen, January 8
Nyenrode Business University
Straatweg 25
3621 BG Breukelen
Final Version
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Improving customer satisfaction in
infrastructure outsourcing
Influencing the different handshakes to increase customer satisfaction
This is the Master thesis Part-time MSc General Management of
Authors: ing. Mark van Tilburg (20090013)
………………………………………
bc. Willem Kuilman (20090035)
………………………………………
Faculty Supervisor: Prof. Dr. Andrzej Hajdasinski MEng
Company Supervisor: Ir. Hans van Heffen
Second Reader: Drs. Hans ten Rouwelaar
Breukelen, January 8
Nyenrode Business University
Straatweg 25
3621 BG Breukelen
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Colophon
Title: Improving customer satisfaction in infrastructure
outsourcing
Sub Title: Influencing the different „handshakes‟ to increase customer
satisfaction
Version date: Final, January 8th
, 2012
Authors: ing. Mark van Tilburg
Prinses Irenestraat 31a
4671 CT Dinteloord
+31 6 13 26 65 09
mark.van.tilburg@businessmonitor.nl
bc. Willem Kuilman
Hongerlandsedijk 974
3001 LW Spijkenisse
+31 6 42 01 27 88
info@str84ward.nl
Faculty Supervisor: Prof. Dr. Andrzej Hajdasinski MEng
Nyenrode Business University
International Center for Business and Diplomacy
Straatweg 25
3621 BG Breukelen
+31 346 291 724
Company Supervisor: Ir. Hans van Heffen
Head of Infrastructure Outsourcing Services
Papendorpseweg 100
3528 BJ Utrecht
+31 306 891 205
Sponsoring Company: Capgemini Nederland B.V.
Papendorpseweg 100
3528 BJ Utrecht
+31 30 389 0000
Second Reader Drs. Hans ten Rouwelaar
Nyenrode Business University
Center for Management Accounting & Control
Straatweg 25
3621 BG Breukelen
+31 346 291 443
Disclaimer:
All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system, or transmitted in any form or by any means, electronic, mechanical, photocopying,
recording or otherwise, without the prior consent of the authors.
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Preface
This paper is the final assignment of our study at Nyenrode Business University. During
our Master of Science in Management course, we have gained great knowledge from
various professors and assistant professors. For both of us this paper also marks a mature
new start in looking at issues, in work, as in life.
During discussions with Hans van Heffen (our company sponsor), on the outsourcing
process, a research subject soon became apparent: the outsourcing process. The end result
gave way to a research question that forms the basis for this thesis.
But first a short introduction about us:
Willem Kuilman works for Capgemini Nederland B.V, within the Infrastructure
Outsourcing Services division. A big part of Capgemini‟s business is outsourcing,
accounting for approximately 36% of the organization‟s revenue (Capgemini, 2010).
Willem has fulfilled several roles within the organization from technician, controller, to
delivery manager. Mark van Tilburg is one of the owners of BusinessMonitor, a marketing
research company based in the Netherlands. The work BusinessMonitor does is (customer)
satisfaction related research, on behalf of a variety of companies.
Capgemini, our sponsoring company, is a global leader in outsourcing. Its collaborative
business approach allows the customer to achieve a better, faster and more sustainable
result. Capgemini has more than forty years of experience, is presently operating in more
than thirty countries and has a global workforce of over one hundred and fifteen thousand
professionals, of whom fifteen thousand are active in the outsourcing industry. Capgemini
is currently collaborating on some of the world‟s largest outsourcing contracts. Leading
companies entrust Capgemini as a results-driven business partner to solve their most
complex business problems.
Capgemini‟s diversified approaches to outsourcing range from traditional engagements that
focus on quick cost reductions to value-added transformational arrangements that impact
deeper, broader changes within organizations. As customers‟ needs are changing,
Capgemini provides flexible and scalable solutions through over one hundred integrated
delivery centers around the globe.
We would both like to offer a word of thanks to all those who have helped us in our thesis.
We would especially like to thank Ir. Hans van Heffen, Head of Infrastructure Outsourcing
Services from Capgemini Nederland, for enabling us to undertake our research without
restrictions. Furthermore, we would like to thank Prof. Dr. Andrzej Hajdasinski MEng
who, as our faculty supervisor, gave us lots of advice and inspiration. It was fun to
exchange ideas (and „Jantje‟ jokes) with him.
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Executive Summary
This thesis describes the diversified issues regarding the customer satisfaction during the
outsourcing process in relation to the outsourcing lifecycle within Capgemini. Also, there
are recommendations made to improve the processes to increase the customer satisfaction
during the outsourcing lifecycle.
The outsourcing lifecycle consists of different process steps. These steps are Sales - selling
the service to a customer; Transfer - transferal and delegation of the old structure from the
customer to the supplier; Transformation - changing the processes in place to the
customer, to match the new processes that will be used; Delivery „soll‟ - when the
customers' processes are upgraded to match the processes used by Capgemini.
With regard to the lifecycle, there are issues that arise from the literature such as; not being
totally honest with regard to the real costs. Project issues such as Student syndrome -
starting too late; Parkinson‟s Law - when there is time, all time will be used; Task
convergence - when one task delays all other parts of the project. Change processes involve
emotions regarding the change that is happening to the people working for the customer,
generating friction between the supplier and the employees of the customer. Third party
involvement also plays a role in friction when another company maintains the project and
creates a boundary between the supplier and the customer.
This research focuses on the internal processes within Capgemini while delivering its
service to customers. „Handshakes‟ are referred to; to describe moments where the work is
transferred between the different processes during the lifecycle and project teams involved.
The main focus is on the „handshakes‟ between the different steps in the outsourcing
lifecycle, with special regard to the processes after the deal has been closed, and a formal
contract has been signed with the customer. The process steps involved are sales, transfer,
transformation and the delivery „soll‟. To gather data on the „handshakes‟, multiple methods
are used in this research to gain insights on the subject. These methods include literature
study, qualitative interviews with senior management and quantitative interviews with the
people working in the various departments.
During the research it became clear that the main issue lay with the contents of the
„handshakes‟ and the people involved. During the „handshake‟ different teams are involved but
when the „handshake‟ is finished, the old teams are not involved anymore. A second issue
that arose, was that the people undertaking the project are also responsible for customer
contact, which decreases the options to change the service during the process.
Given the data collected, the main conclusion that can be made, is that during the entire
process, a supervisory manager should be in charge to manage the entire lifecycle as well as
the „handshakes‟ between the different project teams in particular. This person should keep
an eye on the „handshakes‟ and make sure they are done correctly, but ultimately is not
responsible for the customer relation, and just for the internal processes. One of the main
tasks of this supervisory manager would be to remove the information asymmetry between
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the departments by linking them closely together. Also the supervisory manager should be
able to change the budget allocated between the steps in the process, so that budget
overruns can happen when they solve issues further on in the process. As the supervisory
manager is not involved with the process but only has an overseeing role, he/she should
also be chairman of the steering committee to make the „handshakes‟ as smooth as possible.
Another important suggestion for change is that the responsibility for a customer should
be split between the project team and a relationship manager, where the project team
delivers the product/service, while the relationship manager maintains customer contact
and corrects the project team when something goes wrong during one of the
implementation phases, without being involved in the actual execution. This should make it
possible for customer to address issues properly at the right levels, for example CxO‟s on
both sides linked to each other, without generating friction between the project teams and
the customer.
According to the collected data and its interpretation, the process could be improved by
splitting the responsibility of the project and the customer. As such, it should make it
possible for issues to be corrected faster and earlier on in the process. When the process
steps are better linked, (because of management by a supervisory manager) with each other,
the cost of the steps should decrease where the rework in the end of the lifecycle decreases.
The supervisory manager should as such be able to shift budgets from one part of the
process to another. A second optimization would be to check the specifications with the
customer before the project actually starts; often the specifications are changing after the
sales phase, as the world is moving so are customers‟ specifications.
Other companies that have a process in place where there is a „handshake‟ between the sales
department and the department that has to deliver the service/product to the customer.
These companies could also benefit by adding a supervisory manager to the process who
makes sure that the „handshakes‟ are conducted properly and the sales department remains
involved with the other steps as long as needed, to make sure that the expectations of the
customer are met.
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Table of Contents
Preface VII
Executive Summary IX
Table of Contents XI
List of Tables and Figures XV
Abbreviations XVII
1 Introduction 1
1.1 Definition of Outsourcing 1
1.2 The outsourcing lifecycle 2
1.3 Research focus 2
1.4 Types of outsourcing and scope 3
1.5 The company problem statement and the research question 3
1.6 Conceptual model 4
1.7 Research design 4
1.8 Relevance 5
1.9 Structure of this paper 5
2 Theoretical framework 7
2.1 The outsourcing lifecycle 7
2.1.1 We are going to outsource 7
2.1.2 The sales phase 7
2.1.3 The transfer phase 7
2.1.4 The transformation phase 8
2.1.5 The delivery phase 8
2.1.6 Prolongation or termination phase 8
2.2 Known issues from the phases in the conceptual model 8
2.2.1 Issues related to cost 8
2.2.2 Outsourcing seen as a project 9
2.2.3 Third party involvement 10
2.2.4 Emotions 10
2.3 The relation between the outsourcing lifecycle and Kübler-Ross 11
2.4 Hypotheses 12
3 How the study was conducted 13
3.1 Research Subjects 13
3.2 Data collection 13
3.2.1 Phase one, qualitative data 13
3.2.2 Phase two, quantitative data 14
3.3 Reliability and validity 15
3.3.1 Qualitative phase 15
3.4 Quantitative phase 15
4 Results of data collection and analysis 17
4.1 The results of the qualitative research 17
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4.1.1 Question 1 17
4.1.2 Question 2 17
4.1.3 Question 3 17
4.1.4 Question 4 18
4.1.5 Question 5 20
4.1.6 Question 6 20
4.1.7 Question 7 21
4.2 The results of the quantitative research 22
4.2.1 Handshake between Sales and Transfer (HST) 22
4.2.2 Handshake between Transfer and Transformation (HTT) 23
4.2.3 Handshake between Transformation and Delivery „soll‟ (HTD) 25
4.2.4 Decrease or Increase in customer satisfaction 26
4.2.5 Influence on the customer satisfaction 26
4.2.6 Differences between groups on the perception of the handshake by groups 27
4.2.7 „Handshakes‟ viewed from the different groups 27
4.2.8 Discussion of the Hypotheses 29
4.2.9 Relation between the process steps and responsibility 30
5 Conclusion 33
5.1 Recommendations 34
5.2 Further research 35
5.3 Management implications 36
Appendix 1 - Open interview invitation 39
Appendix 2 - Checklist open interview 41
Appendix 3 - Summaries open interviews 42
Interviewee A 42
Interviewee B 44
Interviewee C 46
Interviewee D 48
Interviewee E 50
Interviewee F 53
Interviewee G 56
Interviewee H 58
Appendix 4 - E-mail questionnaire 60
Appendix 5 - E-mail questionnaire invitation 65
Appendix 6 - E-mail questionnaire reminder 68
Appendix 7 - Response distribution questionnaire 71
Appendix 8 – Sub categories of the categories mentioned in question three 72
Appendix 9 – Sub categories of the categories mentioned in question four 73
Appendix 10 - Sub categories of the categories mentioned in question seven 74
Appendix 11 – Total results of the questionnaire 75
Appendix 12 - Influence of the „handshakes‟ on Customer Satisfaction 87
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Appendix 13 - Effect on customer satisfaction of the „handshakes‟ 88
Appendix 14 - Analysis of the open “improvement” questions with regard to the
„handshakes‟ in the questionnaire 89
Appendix 15 – Analysis of the „handshakes‟ given a bad „handshake‟ between Sales
and Transfer 92
Appendix 16 – Grade compared to the „handshakes‟ 93
Appendix 17 – Deal compared with „handshakes‟ 94
Appendix 18 – „handshakes‟ compared to departments 95
Bibliography 97
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List of Tables and Figures
Figure 1 Process steps in the outsourcing lifecycle 2
Figure 2 Main types of outsourcing 3
Figure 3 Conceptual model 4
Figure 4 Process of transition based on Kübler-Ross theory (John M Fisher) 10
Figure 5 IT outsourcing Satisfaction Transition model 11
Figure 6 Hypotheses 12
Figure 7 Refined conceptual model 16
Table 1 The various departments and their involvement with the different „handshakes‟ 16
Table 2 Legend of Figure 8 20
Figure 8 Different „handshakes‟ in relation to customer satisfaction over time as seen by the
interviewees 20
Table 3 Those who experience of the „handshake‟ between Sales and Transfer 22
Table 4 Influence on customer satisfaction of the „handshake‟ between Sales and Transfer 22
Table 5 Effect on customer satisfaction of the „handshake‟ between Sales and Transfer 22
Table 6 Those who experience of the „handshake‟ between Transfer and Transformation 23
Table 7 Influence on customer satisfaction of the „handshake‟ between Transfer and
Transformation 23
Table 8 Effect on customer satisfaction of the „handshake‟ between Transfer and
Transformation 23
Table 9 Those who experience of the „handshake‟ between Transformation and Delivery
„soll‟ 25
Table 10 Influence on customer satisfaction of the „handshake‟ between Transformation and
Delivery „soll‟ 25
Table 11 Effect on customer satisfaction of the „handshake‟ between Transformation and
Delivery „soll‟ 25
Table 12 Effect on customer satisfaction per handshake 6 = High Increase, 0 = High
decrease 26
Table 13 Influence of the handshake on the customer satisfaction 0 = No influence, 6 =
Very high influence 26
Figure 9 Perception of the „handshakes‟ by grade 27
Figure 10 Perception of the handshake between Sales and Transfer by departments
involved in Sales phase 28
Figure 11 Perception of the handshake between Transfer and Transformation by
departments involved in Transfer phase 28
Figure 12 Perception of the handshake between Transformation and Delivery „soll‟ by
departments involved in Transformation phase 29
Figure 13 Relationship between the lifecycle' phases and the responsible manager 30
Figure 14 Different „handshakes‟ in relation to customer satisfaction over time 31
Figure 15 Kuilman-vanTilburg IT Outsourcing Satisfaction-Transition model 32
Figure 16 IT outsourcing Satisfaction-Transition model 33
Figure 17 The expected result of the improvements of the „handshakes‟ on customer
satisfaction 34
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Abbreviations
PON Platform Outsourcing Nederland
RFP Request for Proposal
TOC Theory of Constraints
SDD Service Delivery Director
SDM Service Delivery Manager
DM Delivery Manager
HST Handshake between Sales and Transfer
HTT Handshake between Transfer and Transformation
HTD Handshake between Transformation and Delivery „soll‟
SPSS Statistical Package for the Social Sciences
IOS Infrastructure Outsourcing Services
RBR Run-Build-Run
OTACE®
On Time and Above Customer Expectations (Capgemini‟s
instrument for measuring customer satisfaction)
CxO Chief x Officer where x can be any sector
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1 Introduction
Technically speaking, outsourcing acquired a business strategy in 1989 (Brown & Wilson).
The very first company to outsource some parts of their business was Eastman Kodak,
which was at that time in an extremely difficult financial situation, due to various mergers
and acquisitions. The goal of Eastman Kodak was to cut IT cost by 50% by turning over
its four data centers and three hundred workers to IBM (Loh & Venkatraman, 1992). IT
outsourcing became a hot topic in board meetings as a strategic choice, due to the fact that
this was a deal between two giants and therefore acted as a precedent. Before this
outsourcing deal, there were many other companies who outsourced, but never received
high exposure in the media.
1.1 Definition of Outsourcing
Firstly, we have to define what outsourcing means. There are several definitions of
outsourcing: (Off-shore) Outsourcing as described by the Panel of the National Academy
of Public Administration for the U.S. Congress and the Bureau of Economic Analysis as
(OFF-SHORING: AN ELUSIVE PHENOMENON, 2006) (Kedia & Mukherjee, 2009):
- Outsourcing: firms contracting out service and manufacturing activities to unaffiliated firms located
either domestically or in foreign countries
- Off-shoring: firms shifting service and manufacturing activities abroad to unaffiliated firms or their
own affiliates
- Off-shore outsourcing: a subset of both outsourcing and off-shoring in that it refers only to those service
and manufacturing activities of companies performed in unaffiliated firms located abroad
And the definition of the Platform Outsourcing Nederland (PON) (Delen, 2008):
- The transfer of services, where if applicable, the accompanying employees and resources are transferred
to a specialized service provider and consequently the rendering back of those processes by that provider
as services for the duration of the contract at an agreed upon level of quality and a financial
compensation structure.
And the last definition used by Gartner (Gartner, 2011):
- Using external service providers to effectively deliver IT-enabled business process, application service
and infrastructure solutions for business outcomes.
All the definitions cover the same matter, namely the use of vendors to execute non-core
services formerly executed by the customers themselves.
Now, having the definition of what we mean by outsourcing we can look at the major steps
we recognize in the outsourcing lifecycle.
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1.2 The outsourcing lifecycle
Six major process steps can be identified in the outsourcing lifecycle (Delen, 2008),
(Richards, 2007) as shown in Figure 1.
Figure 1 Process steps in the outsourcing lifecycle
The first step in the cycle lies in the willingness of the customer to outsource a part or parts
of their organization, based on a solid sourcing strategy. It is not only a cost effective factor
although this may account for a major part of the decision by the customer, but is also an
opportunity to look at alliances to make a proper vendor selection. Once the supplier is
selected, the sales phase will start. This is the stage where all agreements are prepared and
formalized with the customer. The sales department takes the initiative in this process.
When the deal is closed, most times there will be a transfer of goods and/or personnel.
This process of disentanglement and transfer will be referred to in this research simply as
'transfer'. After the transfer, the transformation process commences. This transformation is
done in a cost effective manner by standardizing the services and support. Standardizing
refers to the possibility to reuse existing solutions and share the existing infrastructure as
much as possible without compromising the independence of the customer. This is called
the Delivery „soll‟. The term „soll‟ refers to the preferred or desirable situation in comparing
to the current situation what is called „ist‟. These terms „ist‟ and „soll‟ have their roots in
literature regarding change processes. When the contract term ends, it can either be
extended, or the outsourcing process will repeat itself for the customer. In this case the
existing supplier has to hand over the goods and in certain cases, its personnel associated
with the account, to a new supplier or back to the customer.
1.3 Research focus
Our research is focused on the „handshakes‟ between the sales phase and transfer phase, the
transfer phase and the transformation phase and between the transformation phase and
delivery „soll‟. In this research the term „handshake‟, refers to the transferal of all
responsibilities, knowledge and other relevant information from one project team to the
next one following the outsourcing lifecycle. This includes also the change of customer‟s
primary or secondary point of contact. A research boundary set is that the focus on the
first handshake is from the moment the contract is signed and the handover from sales to
the delivery organization commences until the delivery „soll‟ Everything else regarding the
outsourcing lifecycle will be considered „ceteris paribus‟. The agreement between the supplier
and customer is created between the sales, legal, and human resource departments and the
delivery units, and is finally signed by both parties.
The disentanglement can start directly.
350decision by
customer to start
with sourcing
Sales phase
Disentanglement
Transfer
Transfer
Transfor-
mation
Transition
Delivery Soll
Prolongation of
contract or
termination
Thesis domain
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1.4 Types of outsourcing and scope
The first definition mentions different types of outsourcing. In general, we recognize five
general types of outsourcing although some will diverse even more (Delen, 2008). In this
research Greenfield sourcing, follow-up sourcing and the outsourcing are considered.
Figure 2 Main types of outsourcing
In Figure 2 the main types of sourcing are depicted, as are the different relationships
between the supplier and customer. In this research the focus is on the outsourcing deal
with the transfer of goods and personnel. All other varieties are kept out of scope.
Furthermore, the focus is on the so-called Run-Build-Run (RBR) situation whereby the
existing IT environment, delivery „ist‟, is taken over from the customer. During this period
the new environment is built after which the old environment is replaced with the new one.
The new build environment is the delivery „soll‟. This process will be referred to in this
research as 'classical' outsourcing.
1.5 The company problem statement and the research question
All companies are looking for ways to improve their service. One way is to optimize
existing processes to gain advantages. Capgemini is a company that always looks for ways
to improve its processes and has asked us to investigate how the following company
problem statement can be influenced.
The company problem statement is:
How can we mitigate the dissatisfaction between the customer and the
supplier during the beginning of the outsourcing lifecycle after the deal has
been closed?
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Academic theory offers a lot of written material regarding the subject of customer
satisfaction and the relationship with the supplier. Customer satisfaction is a measure of
how products and services supplied by a company meet or surpass customer expectation.
In general satisfaction is used as a measure between customer attitude and future intentions
(Garbarino & Johnson, 1999). With regard to the relationship there is already a lot of
knowledge in the literature so the focus of this research is not on the relationship with the
supplier. But the focus is on the processes within the supplier boundary, resulting in the
following research question:
The research is aimed at gaining knowledge and insights with respect to the
influence of friction of the ‘handshakes’, in the process
sales>transfer>transformation>delivery „soll‟ on the customer satisfaction,
during the start of the outsourcing life cycle, concerning the customer and the
people involved in the early stages of the outsourcing life cycle.
The research will contribute to a better understanding what the impact is from the
handshakes between the process steps sales>transfer>transformation>delivery „soll‟ and how to
improve and manage the „handshakes‟ in the process more effectively to influence customer
satisfaction in a positive way. This in its turn will result in a win-win situation for both
customer and supplier in an outsourcing deal.
1.6 Conceptual model
When studying the outsourcing lifecycle in Figure 1, we notice that there are certain
moments where work has shifted from one process step to another. These moments are
what we call the „handshakes‟ in the outsourcing lifecycle. The relationship between the
process steps and the „handshakes‟ forms the basis of our conceptual model as displayed in
Figure 3
Figure 3 Conceptual model
The aim of this research is to obtain an insight into how much the three „handshakes‟
influence customer satisfaction.
1.7 Research design
The research is split into three parts. The first part is a literature study. The second and
third parts are the more practical parts of the research. Part two is a qualitative study
consisting of interviews with experts in the field, regarding the process and the different
SALES DELIVERY ‘Soll’
TRANSFOR
MATION
Customer
Satisfaction
Handshake between
Transformation en
Delivery ‘soll’
(HTD)
Handshake between
Sales and Transfer
(HST)
Handshake between
Transfer en
Transformation
(HST)
TRANSFER
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„handshakes‟. The interviews are conducted with senior managers and executives or former
executives involved with the outsourcing business. The last part is a questionnaire
submitted to employees of Capgemini that are involved in the outsourcing process.
1.8 Relevance
This research is relevant scientifically and managerially. First, we will make a connection
between the different scientific approaches of this subject. In literature there is not much
research found with the focus of „handshakes‟ in the outsourcing lifecycle or similar
processes. Secondly, the managerial relevance is that the insight into the „handshakes‟ and
the effect they have on customer satisfaction is clarified, which in turn makes it possible to
control the process more vigorously. This particular method of research is also usable for
other managerial questions regarding „handshakes‟ and the diverse processes in a variety of
companies and not only for the outsourcing lifecycle in the IT business.
1.9 Structure of this paper
Following the introduction, the first focus will be on the theories related to the research
question, and there will be a discussion of concepts used. Also, a number of hypotheses
will be exemplified in this part and what we expect from the research will be discussed. In
Chapter Three the research methods are described; why they were chosen and what is
expected from them. In Chapter Four the results will be presented and analyzed.
Qualitative and quantitative researches are both presented. There is also a discussion
regarding the hypotheses performed. In the last chapter, Chapter Five, the conclusions and
recommendations as well as suggestions for further research will be presented.
All interviews of this research have been done in Dutch; some parts of the appendices are
in Dutch where they reflect actual answers of the respondents. Where possible the English
text has been added to elaborate on the contents of the appendices. Two of the appendices
are not translated entirely since they are the actual representation of answers given by the
respondents; these are the open answers in Appendix 3 – „summaries open interviews‟ and
Appendix 11 –„total results of the questionnaire‟. Those open answers are summarized during
the analysis. Appendix 8 – ‟sub categories of the categories mentioned in question three‟, Appendix 9
– „sub categories of the categories mentioned in question four‟ and Appendix 10 – „sub categories of the
categories mentioned in question seven‟ are the summarizations of the open answers from
Appendix 3 – „summaries open interviews‟ and Appendix 14 „Analysis of the open “improvement”
questions with regard to the handshakes in the questionnaire‟ is the summarization of the open
answers of Appendix 11 – „total results of the questionnaire‟.
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2 Theoretical framework
Here the element of the conceptual framework is discussed in greater detail. The
„handshakes‟ will be described, as well as the known barriers and pitfalls that are influencing
factors on customer satisfaction, are also pointed out. Secondly, we will elaborate briefly on
outsourcing as a project phenomenon. Finally, the emotional response to change and the
relationship with outsourcing as an anticipated behavior is discussed.
2.1 The outsourcing lifecycle
In this section the outsourcing lifecycle will be described. Companies decide to outsource
parts of their business; they are obtaining services from an external resource (Brown &
Wilson, 2005).
2.1.1 We are going to outsource
The reasons companies outsource part of their business is diverse, but all come back to the
question of costs, as was the case in our example in the introduction, where Eastman
Kodak was in financial difficulties. Some other companies have internal managerial
challenges, like adequately managing an IT department or want to reduce their staff. Today,
more companies use outsourcing as a strategic solution instead as a tactical. They want to
outsource the burden of simple managerial work, allowing them to focus on the more core
competences of the business. The commonality is that to enter the outsourcing lifecycle,
they must first decide that they want to transfer parts of their business to a supplier.
2.1.2 The sales phase
In this phase, the scope of the deal is established, the request for proposal (RfP) is
developed and the customer assesses the responses from suppliers. During this phase it is
common for sales to try to persuade the delivery organization in accepting exemptions in
what it can deliver. Finally, a vendor is chosen and the negotiating part of the sales phase
will commence. During this phase agreements are put on paper and boundaries are set and
both parties sign the agreement. Once the signatures are exchanged, the implementation
can start.
2.1.3 The transfer phase
This phase consists of two sub phases. The first one is the disentanglement of the services,
personnel, and hardware and software assets upon transfer to the supplier. In this stage the
customer does not notice a big difference in the service provision. It can be said they get
their former service but at a lower cost. The supplier will slowly start to improve parts of
the service to make it more robust when possible but great changes are not to be expected.
It is a learning curve for the supplier, as in this phase he/she begins to get an idea of what
is acquired despite the due diligence in the sales phase. Also the customer begins to know
their supplier better.
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2.1.4 The transformation phase
During this phase the transformation to the supplier will start. All services are transferred
to the supplier‟s location and most of the existing services are renewed and fitted into the
supplier‟s organization. The customer is implementing a governance structure and is
implementing the required interfaces to follow the standardized processes of the supplier.
Examples are the incident and change process, which are formalized according to the
contract, to ensure a smooth working of the flows at both sides. A well functioning
organization will be of value for both customer and vendor. This phase of the outsourcing
lifecycle is the most demanding. A lot of implementations are done in a short time span to
make the environment leaner, as quickly as possible, in order to have a gain for both parties
financially as well as operationally.
2.1.5 The delivery phase
This phase has the least impact during the outsourcing lifecycle. Environments are stable
and all changes in the environment are done in a controlled matter to ensure that the
environment will function on its best at the lowest possible cost. Most of the time this
phase will continue between three and five years, depending on the total contract term.
2.1.6 Prolongation or termination phase
During this phase the contract will be extended with some changes or enhancements,
otherwise the contract will end. The last choice will have significant impact on the
relationship between customer and vendor. The most optimal scenario is for both parties
to approach the ending negotiations in a professional manner, so it has less of an impact
on all fronts and for as low a cost as possible. For the customer, the cycle will restart but
with a new vendor or even a re-transition or back sourcing. When the contract is
prolonged there will be some change, as the customer will most likely demand an upgrade
on its environment as a price to pay for the awarding of the prolongation.
2.2 Known issues from the phases in the conceptual model
In this part the known issues of the outsourcing lifecycle, related to the conceptual model,
will be exhibited and discussed.
2.2.1 Issues related to cost
As many outsourcing projects are started as cost saving initiatives, this will instantly create
friction between the supplier and the customer. It becomes a zero-sum game where the
price is so low that the supplier cannot make an honest profit and is not able to innovate
and create real value for the customer (Weeks & Feeny, 2008). Outsourcing, as many other
agreements, should be a partnership where there is a win-win for both of the parties
involved. As a result, innovation can take place and the outcome will be better for both
companies (Weeks & Feeny). They should seek outsourcing arrangements that can
transform their business and increase value (Taylor, 2006). In the field of logistics it is
-9-
common for parties to work together and give each other insight in their performances and
processes. It goes even so far as pointing out that the supplier sees the turnover from their
customer, to make it possible to react on the changes caused by production or sale of
product. It is called Information Sharing (Lee & Whang, 2000) (van der Veen & Venugopal),
which is in the lifeblood of the supply chain (Liker & Choi).
Not being aboveboard is a big driver of friction between the supplier and the customer,
when there is a cost based transaction. Friction can rise between the supplier and the
customer, where they both know they are hiding costs that will benefit the customer or the
supplier. The customer can hide things during the due diligence phase and the supplier can
try to bill hidden fees that where not correctly incorporated into the contract (Weeks &
Feeny, 2008). When the contract is cost based, it is also important to keep track of hidden
costs such as time taken by management to transfer the tasks to the outsourcer but also
costs that are going to be made if there is a delay in the process or it is more expensive to
lay off old employees (Earl, 1996).
2.2.2 Outsourcing seen as a project
A project is usually considered with an end goal in mind. Outsourcing can also be seen as a
project, in total it is a big project which runs multiple years or a small project when only
considering changes which run a couple of weeks. Both types of projects have similar
issues; however the impact is much larger on big projects that run for a long time. When a
project is seen on its own there are some main key success factors, such as good project
management, the setting of clear goals and benefits for the contractor (Dvir, Raz, &
Shenhar, 2003)
To accomplish a good score on these key success factors it is important that some of the
main risks for project failure are mitigated before the project is undertaken. One of the
most common reasons for project failure is „ambiguous specifications‟ where there is either
a gap between the contracted and the contractor, the supplier misinterprets the
specifications or the specifications do not match what the contractor actually expects from
the project. For instance, „it must be fast‟ could be understood as if it feels fast it is ok, but
the customer could have meant that it should support 1000 requests at once and handle
these within five seconds each. Unclear or non-matching specifications will result in a
negative score on customer satisfaction where the contracted supplier matched the
requirements but not the real required benefits. In other words; the dashboard is green but
the customer is not satisfied.
Even if a project has a good project plan, the right requirements and a good project
manager, there are still other reasons why projects can go wrong. Student Syndrome,
Parkinson‟s Law, and Task convergence are aspects that are mainly people related issues
that influence customer satisfaction (Blackstone, Cox, & Schleier, 2009).
 Student syndrome is starting too late on a task so all tasks get postponed.
 Parkinson‟s law relates to time management. It states that when there is plenty of
time, a task will take up all time awarded for that task.
 Task convergence is when one task depending on another that is delayed. There is a
solution for task convergence, if you base the project schedules on the Theory of
Constraints (TOC) principle (Goldratt, 2004).
-10-
2.2.3 Third party involvement
When undertaking a project with a third party contractor the most important factor when
handling a project, is to cut out the middleman. It is much more difficult to talk to each
other if there is someone standing in the middle (Earl, 1996). Before the project takes place
it is advisable to have a middleman to describe the project and create good specifications
for the customer, but when the project starts they need to step aside to keep the
communication lines as unclouded as possible (Taylor, 2006).
2.2.4 Emotions
As stated earlier, outsourcing can be seen as a huge project with many aspects and has a
significant impact on the organization and the people involved (John M. Fisher, 2005). So,
whatever the reason for outsourcing, emotions will take over where there are people
involved, because most of the things they consider normal are going to change (Earl,
1996).
Figure 4 Process of transition based on Kübler-Ross theory (John M Fisher)
As with all organizational changes, outsourcing will also follow the five stages of death
(Boerner, 2008) as described by Kübler-Ross (Kübler-Ross, 1970). An explanation for this
can be found in the psychodynamic approach, where people tend to fall back on what they
have learnt, their inner working model, when the changes they are exposed to are too much
for them to handle (Schaveling, 2008).
Most of the time, peoples‟ reactions to any given situation is an unconscious one. It is a
survival reaction. The reptilian brain is predominating and we will react conservatively to
the changes (John M. Fisher, 2005). The five main stages of the Kübler-Ross model are
The Process of Transition
Anxiety
Can I
cope ?
Happiness
At Last
something’s
going to
change !
Fear
What
impact will
this have?
How will it
affect me?
Threat
This is bigger
than I
thought!
Guilt
Did I
really do
that
Depression
Who am
I?
Gradual
Acceptance
I can see
myself
in the
future
Moving
Forward
This can
work
and be
good
Hostility
I’ll make
this work
if it kills
me!!
Denial
Change?
What Change?
Disillusionment
I’m off!!
… this
isn’t for
me!
-11-
denial and isolation, anger, bargaining, depression, and acceptance, which can be
transformed to a visual representation of the process as shown in Figure 4.
2.3 The relation between the outsourcing lifecycle and Kübler-Ross
Change is emotional and as such it will follow (to a greater or lesser degree, the five stages
of grief (Boerner, 2008)). As outsourcing can be seen as a change process, it means that the
people involved will follow the Kübler-Ross model in this process.
The other factor is customer satisfaction during the outsourcing lifecycle. Satisfaction is an
emotion influenced by the change caused by the outsourcing lifecycle. As such, the Kübler-
Ross model can be transformed to a model to show how satisfied a customer is during the
outsourcing lifecycle. This transformation is shown in Figure 5.
Figure 5 IT outsourcing Satisfaction Transition model
The influence of the different „handshakes‟ on satisfaction over time can be projected in a
graph. The y-axis projects the level of satisfaction, and the x-axis projects time.
The progression in the graph will follow the line in Figure 5.
+
-
0
Satisfaction
Anxiety Happiness Fear Threat Guilt Depression Gradual
Acceptance
Moving
Forward
t
-12-
2.4 Hypotheses
Based on the expectations four hypotheses have been formulated.
Hypothesis 1: In case of a satisfactory „handshake‟ between sales and transfer, there
is a positive correlation with customer satisfaction.
Hypothesis 2: In case of a satisfactory „handshake‟ between transfer and
transformation, there is a positive correlation with customer
satisfaction
Hypothesis 3: In case of a satisfactory „handshake‟ between transformation and the
delivery organization, there is a positive correlation with customer
satisfaction
Hypothesis 4: In case of an unsatisfying „handshake‟ between sales and transition,
there is a positive correlation with an unsatisfying „handshake‟
between transition and the delivery organization.
These hypotheses are depicted in Figure 6
Figure 6 Hypotheses
-13-
3 How the study was conducted
This chapter discusses the methodology used, explaining why we opted for the methods
used, providing an outline on who was interviewed for our research, outline of the
methods we used to conduct the research.
3.1 Research Subjects
Qualitative research with in-depth expert interviews was conducted followed by a
quantitative research approach, to relate the answers from the experts within the
organization. This resulted in a broader view on the subject of customer satisfaction in
relation to the different „handshakes‟.
The study started with expert interviews to get a better understanding of the outsourcing
process inside the company. This part of the study was also initiated to gain knowledge on
how the process followed differed from theory about the outsourcing process. Capgemini
Infrastructure Outsourcing Services (IOS) is responsible for the Outsourcing lifecycle from
the sales phase through to the delivery „soll‟ phase. When choosing the subjects for the in-
depth interviews, the position of the subjects in the organization and their engagement in
the outsourcing lifecycle were taken into account. IOS is responsible for the outsourcing
life cycle for different customers, and they work in the different phases in the outsourcing
lifecycle investigated, within the different teams.
After this initial step, questionnaires were sent out to the people working in the various
departments within IOS, with questions included concerning the „handshakes‟ during the
beginning of the outsourcing lifecycle. At first, in depth interviews were conducted, to gain
knowledge about the process in the company, and to be able to ask the right questions to
employees in the final part of the research. The final part of the research also related to
getting knowledge with regard to the question of how the view of senior management
differs from the view of the staff of the different departments within Capgemini.
3.2 Data collection
This section describes how the data is collected from the different respondents in the
research phases.
3.2.1 Phase one, qualitative data
By interviewing people of different levels, qualitative data was collected. The groups of
respondents are based in Utrecht, in The Netherlands. Expert interviews were conducted
with respondents working in infrastructure outsourcing for at least 10 years, assuming that
as a result, they have more experience and in-depth knowledge within the field. The first
part of the study was mainly focused on the process itself and how people perceived the
process applied within IOS. Hereafter, a second study was done to see if the „handshakes‟
between the process steps are of any influence on the process, and how they can be
improved to create better customer satisfaction. The time used for face-to-face interviews
was between forty-five minutes and an hour.
-14-
The structure of the interview was as follows; a short introduction about the subject, after
which the questions from the checklist were posed (the questions can be found in the
checklist as presented in Appendix 2 – „checklist open interviews‟). The first question of the
checklist is to determine who is responsible for the Transfer-Transformation-Delivery
process.
Another research area looked at what the main issues in the process were, in relation to
customer satisfaction, so the focus is on the issues as the experts see them. Questions with
regard to the issues in the process, concerning the customer supplier relationship were
asked, because the issues for customer satisfaction can differ from those in the customer
supplier relationship.
After these questions, some additional questions were asked in relation to the „handshakes‟
between the different teams working in the lifecycle. With regard to these, it is interesting
to establish if there is a generic time frame when these „handshakes‟ are occurring during the
process, and how much influence the different handshakes have on the lifecycle.
The final part of the expert interview focuses on possible improvements of the entire
lifecycle with reference to customer satisfaction but also the customer supplier relationship.
3.2.2 Phase two, quantitative data
For the web-based questionnaires we used the facilities available at BusinessMonitor,
including real-time reporting and the possibility to check day-to-day response statistics. The
BusinessMonitor tool made it possible to send out surveys to the respondents as well as
remind those that did not respond. To ensure the privacy of the respondents, the survey is
send out by a third party and not via Capgemini or one of their subsidiaries. The dataset
was delivered without respondents‟ names. The questionnaires are sent by e-mail in a
Capgemini layout to emphasize that the research is done under the authority of Capgemini,
and thereby decrease the likeliness of it being ignored. The e-mail was sent to all employees
working in the departments involved in the outsourcing life cycle. The survey that was sent
to employees can be found in Appendix 4 – „e-mail questionnaire‟, the text used in the e-mail
to the employees can be found in Appendix 5 – ‟e-mail questionnaire invitation‟, the text used
for the reminder e-mail can be found in Appendix 6 – ‟e-mail questionnaire reminder‟.
Experience in the research field at Salesforce Up To Data B.V., the provider of the
BusinessMonitor tool, shows that the highest yield of responses can be reached within
three days after when the initial invitation was sent. Secondly, Salesforce knows from prior
experience that questionnaires sent on Tuesday have the highest yield in a business
environment. We decided to send out the reminder e-mail one week after the initial request
for participation. To make sure the employees would not be irritated with the questionnaire
we decided not to send a pre-announcement but just an invitation to the questionnaire. In
the invitation they also had the option to decline participating in the research.
We contacted the entire population of employees working in the departments dealing with
the outsourcings life cycle (393 employees) to get the best chance of reliable answers.
After twelve days, one hundred and fifty-one (151) people responded to our questionnaire.
Out of this figure, one hundred and thirty three (133) were complete and usable for
-15-
analysis. The questionnaire used in this study was developed based on our research with
senior management and experts working in the field.
We invited respondents for the email survey on the 5th
& 12th
of December 2011. This
resulted in a total response of 38,4%; of which 88,1% was usable for analysis. We changed
the e-mail text used for the reminder compared with the initial invitation to make it clearer
that the research was also conducted with someone working at Capgemini (Willem
Kuilman).
3.3 Reliability and validity
This section describes the reliability and validity of the research conducted.
3.3.1 Qualitative phase
The first phase of our research focused on getting insights into the process of how the
company functioned and understanding if practice matched theory.
For our initial research ten employees were contacted. Eight of them responded to our
inquiry and participated in a face-to-face interview. The invitation letter consisted of a basic
outline of our research but not the actual questions to be asked. The invitation letter can be
found in appendix 1 – „open interview invitation‟, the checklist that was used during the
interviews can be found in appendix 2 – „checklist open interview‟. To make sure no language
barrier was raised during our research the whole interview was conducted in the native
language of the interviewee, (Dutch), in the expectation that this would lead to more robust
answers since the language is fully understood by the respondents and researchers.
The open-ended questions are used to get as much information as possible. Open-ended
questions allow for the interviewee to answer from their own frame of reference rather
than being confined by the structure of pre-arranged questions. For the Face-to-Face
interviews, our initial sample consisted of eight people of which three with „expert‟
experience in the field. All eight persons were interviewed with regard to the outsourcing
process. This sample equals most of the upper layers in the IOS organization.
3.4 Quantitative phase
For the second phase of our research, an e-mail questionnaire is used to get a better
understanding of how the people working in the different departments feel about the
„handshakes‟ in the lifecycle. All data is collected within IOS in the Netherlands.
We kept our survey as small as possible, twelve questions maximum, to determine if the
respondent sees the different „handshakes‟ within the organization. If they did not see any
„handshake‟, three questions were presented to the respondent. To make sure no language
barrier was raised during our research the whole questionnaire was conducted in the native
language of the respondent, (Dutch), in the expectation that this would lead to more robust
answers since the language is fully understood by the respondents and researchers. For our
research we contacted all groups that are connected with one of the handshakes
-16-
Figure 7 Refined conceptual model
In Figure 7 the „handshakes‟ depicted between sales and transfer has been abbreviated as
HST (Handshake Sales-Transfer); the „handshake‟ transfer to transformation has an
abbreviation of HTT (Handshake Transfer-Transformation) and a „handshake‟ between
transformation and delivery has abbreviation HTD (Handshake Transformation-Delivery
„soll‟). In Table 1 the relationship between the „handshakes‟ and the groups are shown.
Departments HST HTD HST,
HTT
HTT,
HTD
HST,
HTT,
HTD
R20 Infrastructure Outsourcing client team X
R21 Infrastructure Outsourcing Data Center Services X
R22 Network & Security Services X
R23 Infrastructure Outsourcing Transition, project &
delivery Excellence
X
R24 Infrastructure Outsourcing portfolio management X
R25 Service desk, Workplace & Service management X
R40 Transition Management X
R70 Sales – Business Development X
R90 Infrastructure Outsourcing Management X
R92 Human Resource Transitie X
Table 1 The various departments and their involvement with the different „handshakes‟
A more detailed outline of the groups questioned can be found in Appendix 7 – „response
distribution questionnaire‟.
Customer
Satisfaction
Handshake between
Transformation en
Delivery ‘soll’
(HTD)
Handshake between
Sales and Transfer
(HST)
Handshake between
Transfer en
Transformation
(HST)
-17-
4 Results of data collection and analysis
In this chapter analysis will be presented of the qualitative and quantitative researches in
the order that they were conducted.
4.1 The results of the qualitative research
Most of the people in our expert interviews shared the same level of knowledge, experience
and vision of the outsourcings process. During the research the process of „classical‟
outsourcing was clearly outlined and determined how the experts perceive it.
4.1.1 Question 1
Our first question was „Who is responsible for the process Transfer-Transformation-Delivery?‟
Our research shows that the interviewed experts all state that this process lies with the
delivery subsidiary. The owner of this process is the Service Delivery Director (SDD). All
managers from the sub-processes report directly or indirectly to the SDD, resulting in the
ultimate responsibility for the outsourcing process with the SDD.
4.1.2 Question 2
After we determined who was responsible for the Sales Transfer-Transformation-Delivery
process, we wanted to know if there are improvements possible with regard to the
responsibility. „Who should be responsible for the process Transfer-Transformation-Delivery?‟
Most interviewees agreed that the responsibility should not change. However, it was felt
the process itself could be optimized by keeping the same persons from the different
process steps engaged from the start of the transfer phase, until its end of the
transformation phase where the „handshake‟ to delivery „soll‟ takes place.
4.1.3 Question 3
This open question gives an insight on the major issues of the satisfaction during the
outsourcing process. „What are the major issues in the process Transfer-Transformation-Delivery with
regard to client satisfaction?‟
The answers are analyzed through categorization the answers. The sentences in the answer
are judged and categorized. These categories are then categorized again. This iterative
process is repeated until there are approximately eight main categories remaining. The top
four categories are then used to give a relevant answer to the question
The top four issues mentioned by the interviewee are; quality of the people involved,
relation and communication, opportunistic behavior and governance.
-18-
Quality of the people involved
Sales should keep deliveries demands in mind and not over promise to the customer. There
should be a good fit between both sides. If there is no match between the people on both
sides, changes will be necessary.
Relation and communication
People are working on the project but also need to maintain relations. The same persons
should not be involved in both. If the task is not done right for the customer, they should
discuss this with the relationship manager and not the technical departments. When a
customer has a problem with the project there should be the possibility to contact
someone at the other side with equal responsibility, (for example, linking the CxO levels on
both sides together) so they can tackle the issue at the same level.
Opportunistic behavior
Sales people tend to sell anything to close a deal, without necessarily keeping in mind, the
parts of the organization that actually have to deliver the goods/services. One of the
reasons for this issue is the payment of a 'sales bonus' after the closure of a deal.
Governance
It is important to get the governance in place correctly. When a deal has been closed, key
people are sometimes moved around within a company. To make sure the right services are
delivered, it is important to align the right people on both sides.
In Appendix 8 – ‟sub categories of the categories mentioned in question three‟ the sub items related to
these groups can be found.
4.1.4 Question 4
Question 4 is aimed at getting knowledge with regard to the possible issues in the process
influencing the relationship between the customer and the supplier. „What are the major issues
in the process Transfer-Transformation-Delivery with regard to the client supplier relationship?‟
The main issues that resulted from our expert interviews are Governance, Quality of the
people involved, and the fit with the customer.
Governance
With regard to governance, one of the main issues is that the people that are doing the
project are also involved with relationship management. Relationship management could
be put with account management, so issues with the project can be discussed without
frustrating the actual people involved. The CxO levels should be linked to solve issues on
both sides faster and easier.
Quality of the people
Quality of the people involved is not really about the quality of the people but more about
having the right person for the right task. Sales people will do everything to meet their
targets, including selling more than can be expected from the supplier. It is a prisoner‟s
dilemma, due to the nature of the job. It can be mitigated as long as it is possible to
manage the expectations of the customer. Most important is that the sales department does
-19-
not promise something they have no knowledge of. Communication should be transparent,
open and pro-active. Technical people are less communicative; this is a known fact and
should be dealt with by guidance and education and by putting a good governance in place.
When the specifications of a deal are determined, the people that are going to deliver the
solution also need to be involved, so a solution can be created that matches the
expectations of the customer as well as the expectations of the supplier. Some experts also
point out that there are not enough qualified people available for some of the projects.
Different types of FIT (Strategic, Business and Cultural)
The FIT between the customer and the supplier plays a big role in issues between the two
parties. With regard to „FIT‟ there are some issues that can be determined.
Departments that are going to deliver the solution have no knowledge or not enough
knowledge, on how the customers‟ business operates and need to be educated on the
processes that are in place at the customer.
Contract knowledge is crucial to be sure that the delivered goods/services match what was
agreed on with the customer and not to be played by the customer.
With regard to the alignment of the companies, the supplier must help customers who are
not experienced enough in the process. The fit between the company, culture and the
business of the customer play a big part of the issues on the relationship.
In Appendix 9 – „sub categories of the categories mentioned in question four‟ the sub items related to
these groups can be found.
-20-
4.1.5 Question 5
Figure 9 is the result of question 5 where the different „handshakes‟ are positioned on the
satisfaction curve. „Where on the graph will you place the different handshakes between the process
steps?‟ Figure 8 shows where the interviewees plot the three „handshakes‟ in relation to the
customer satisfaction where the numbers in the graph are the different „handshakes‟.
Value Label
1 Handshake between Sales and Transfer (HST)
2 Handshake between Transfer and Transformation (HTT)
3 Handshake between Transformation and Delivery „soll‟ (HTD)
Table 2 Legend of Figure 8
The letters „A‟ to „H‟ respond to the different interviewees. Two of the interviewees were
not taken into consideration due to the fact that they were not able to pinpoint the stage in
relation with the satisfaction.
Figure 8 Different „handshakes‟ in relation to customer satisfaction over time as seen by the interviewees
4.1.6 Question 6
Question 6 handles the timeline of the three „handshakes‟. „When do the different phases
„handshakes‟ take place (in x months)?‟ The conclusion of the answers is that there is no general
understanding of the timeline within an outsourcing project. Every interviewee has his or
her own view on what the average time line should be. It ranges from less than a year to
three years, before the situation is normalized. Normalized relates to the satisfaction level
of the customer being above null. There has been some dispute about this matter, because
many interviewees do not see the transfer between sales and transfer and between transfer
and transformation separately. For them, it is virtually impossible to separate the two when
answering the question without the risk that the discussion will guide them toward an
answer. The conclusion is that the question is not suitable for use. The answers of this
question will not be further used in this research.
+
-
0
Satisfaction
A
1
A
2
A
3
B
3B
2
B
1
C
1
C
2
C
3
E
1
E
2
E
3
F
1
F
2
F
3
H
1 H
2
H
3
t
-21-
4.1.7 Question 7
The last question: „How can the relationship between the customer and the supplier be improved, and
how can the client satisfaction be improved, taking the different phases (Transfer-Transformation-Delivery)
into consideration?‟ resulted in a series of keywords regarding improvements of the
relationship and customer satisfaction. These keywords are a result of a 3 time iterative
process of grouping words from the different interviews
Opportunistic behavior of sales
The Sales department tends to sell more than they are able to deliver. New cutting edge
technologies are sold to get a deal; cutting edge gives issues in the delivery phase where
they need to implement services/products they are not experienced with yet.
Communication
Projects always have issues that make them longer than expected or uncertain issues that
delay the project. To make sure the satisfaction of the customer is not decreasing very
much due to delays, it is important to keep them aware of issues that occur during the
process.
Governance customer
Within the customer organization there must be good governance in place. If people have
issues with the outsourced parts of the business, they should discuss these first within the
customers' organization to make sure those involved in the actual project, are not
influenced by the wrong people.
Quality of personnel
The right people for the right job; if a technical person needs to undertake relationship
management, it is likely that things will go wrong.
Egos and emotion
When something goes wrong in the process people need to admit that it went wrong and
work on a solution together. During different steps, all kinds of things can go wrong that
can be solved better with others involved.
Maturity customer
Customers that are doing outsourcing for the first time are not experienced and as such
giving delays during the phases. To mitigate customers that are outsourcing for the first
time, the customer should be helped with getting good governance, and more time should
be allocated for the different phases.
In Appendix 10 – „sub categories of the categories mentioned in question seven‟ the sub items related
to these groups can be found. A short summary of each face-to-face interview can be
found in Appendix 3 – „summaries open interviews‟.
-22-
4.2 The results of the quantitative research
The 2nd
phase of the research is aimed at getting knowledge with regard to how the
„handshakes‟ are perceived within the different departments working in the outsourcing
lifecycle.
The Likert scale questions are analyzed with a one sample T-Test using Statistical Package
for the Social Sciences (SPSS). For the analysis with regard to the open question a list of
terms that describe the points pointed out by the respondent is created. This list is grouped
by term and ranked on the number of times a term has been used.
The tables used for the analysis are presented in Appendix 11 – „total results of the
questionnaire‟.
4.2.1 Handshake between Sales and Transfer (HST)
The questions regarding the HST are aimed at getting knowledge about the „handshake‟, is
there a „handshake‟, does this „handshake‟ influence customer satisfaction, and if it influences
customer satisfaction does it decrease or increase it?
Of the respondents that see the HST, 76.8% of them see a „handshake‟ that can be improved.
74.7% believes the HST has influence on the customer satisfaction. Currently the effect on
the customer satisfaction score according to the respondents is a negative effect since the
customer satisfaction decreases during the HST.
Total
N (%)
Experienced
HST
N (%)
Yes, Good 22 (15.1%) 22 (23.2%)
Yes, Bad 73 (50.0%) 73 (76.8%)
No 51 (34.9%) 0 (0%)
Total 146 95
Table 3 Those who experience of the „handshake‟ between Sales and Transfer
No influence Low influence Influence High influence Very high influence
N (%) 1 (1.1%) 5 (5.5%) 17 (18.7%) 50 (54.9%) 18 (19.8%)
N (%) 6 (6.6%) 17 (18.7%) 68 (74.7)
Table 4 Influence on customer satisfaction of the „handshake‟ between Sales and Transfer
High
decrease
Decrease Neutral Increase High
increase
N (%) 3 (3.3%) 49 (53.3%) 34 (37.0%) 4 (4.3%) 2 (2.2%)
N (%) 52 (56.6%) 34 (37.0%) 6 (6.5%)
Table 5 Effect on customer satisfaction of the „handshake‟ between Sales and Transfer
With regard to the question how the HST can be improved the respondents gave a couple
of main areas where they believe the process can be improved, these are: alignment of
expectations, standardization, and involving the delivery department in the sales phase.
-23-
Alignment of expectations
A customer might expect something different than what is believed by the people that are
delivering the service. To keep in line that what is going to be delivered with the
expectation of the customer the expectations must be aligned. This keeps the gap between
actual and expected small.
Standardization
During the sales process more standardized processes should be sold to the customer this
includes standard services instead of product.
Involving delivery in the sales phase
To be sure that the sales contract only contains viable services the delivery department
should be consulted early in the process. Everything can be delivered but the price and the
time available should be in line with the services the delivery department can deliver.
4.2.2 Handshake between Transfer and Transformation (HTT)
The questions regarding the HTT are aimed at getting knowledge about the „handshake‟, is
there a „handshake‟, does this influence customer satisfaction, and if so, does it increase or
decrease customer satisfaction?
Of the respondents that see a HTT, 77.7% of them see a „handshake‟ that can be improved.
80.4% believes the HTT has influence on the customer satisfaction. Currently the effect on
the customer satisfaction score according to the respondents is a negative effect since the
customer satisfaction decreases during the HTT.
Total
N (%)
Experienced
HTT
N (%)
Yes, Good 20 (14.8%) 20 (32.3%)
Yes, Bad 70 (51.9%) 70 (77.7%)
No 45 (33.3%)
Total 135 90
Table 6 Those who experience of the „handshake‟ between Transfer and Transformation
No influence Low influence Influence High influence Very high influence
N (%) 1 (1.1%) 4 (4.6%) 12 (13.8%) 49 (56.3%) 21 (24.1%)
N (%) 5 (5.7%) 12 (13.8%) 70 (80.4)
Table 7 Influence on customer satisfaction of the „handshake‟ between Transfer and Transformation
High
decrease
Decrease Neutral Increase High
increase
N (%) 4 (4.7%) 42 (48.8%) 31 (36.0%) 9 (10.5%)
N (%) 46 (53.5) 31 (36.0%) 9 (10.5%)
Table 8 Effect on customer satisfaction of the „handshake‟ between Transfer and Transformation
-24-
With regard to the question how the HTT can be improved, respondents indicated a
couple of main areas where they believe the process can be improved, these are: alignment
of expectations, involve delivery in the transformation phase, standardization, governance
and communication customer internally.
Alignment of expectations
A customer might expect something different than what is believed by those that are
delivering the service. To keep in line, whatever is going to be delivered with the
expectation of the customer, the expectations must be aligned. This keeps the gap between
actual and expected, down to a minimum.
Involve delivery in the transformation phase
To make sure that the new processes for the customer are properly aligned within the
delivering company. The delivery department should be involved in the transformation
phase so they know early on what they have to deliver and can come up with better
solutions and processes before it is all in place.
Standardization
The focus during the phase should be more on standardization, where can the standard
services be delivered instead of creating a new tailored solution for the customer.
Governance
Responsibility should be clear to all, so everyone involved is aware of their respective
duties. This applies to the customer as well as the supplier.
Communication customer internally
During the phase where the company‟s processes are transformed into more Capgemini
compatible ones, communication inside the customer should keep the end users aware, so
they know what is happening.
-25-
4.2.3 Handshake between Transformation and Delivery „soll‟ (HTD)
The questions regarding the HTD are designed at getting knowledge about the „handshake‟,
determining if there is a „handshake‟, does it influence customer satisfaction, and if so, does it
decrease or increase it?
Of the respondents that see a HTD, 68.7% of them see a „handshake‟ that can be improved.
81.1% believe the HTD influences customer satisfaction. Currently, the effect on the
customer satisfaction score (according to the respondents) is negative, since the customer
satisfaction decreases during the HTD.
Total
N (%)
Experienced
HTD
N (%)
Yes, Good 31 (23.7%) 31 (31.3%)
Yes, Bad 68 (51.9%) 68 (68.7%)
No 32 (24.4%)
Total 131 99
Table 9 Those who experience of the „handshake‟ between Transformation and Delivery „soll‟
No influence Low Influence influence High influence Very high influence
N (%) 0 5 (5.3%) 13 (13.7%) 43 (45.3%) 35 (35.8%)
N (%) 5 (5.3%) 13 (13.7%) 78 (81.1%)
Table 10 Influence on customer satisfaction of the „handshake‟ between Transformation and Delivery „soll‟
High
decrease
Decrease Neutral Increase High
increase
N (%) 12 (12.6%) 40 (42.1%) 28 (29.5%) 14 (14.7%) 1 (1.1%)
N (%) 52 (54.7%) 28 (29.5%) 15 (15.8%)
Table 11 Effect on customer satisfaction of the „handshake‟ between Transformation and Delivery „soll‟
With regard to the issue of how the HTD can be improved, respondents suggested a few
options; standardization, acceptation criteria and the involvement of delivery in
transformation.
Standardization
The focus during the phase should be more on standardization, determining where the
standard services can be delivered, instead of creating a new tailored solution for the
customer.
Acceptation criteria
Before delivery accepts the „handshake‟ from the Transformation phase, delivery should have
had made clear what it expects from the Transformation department, so all required
documents are in place and the delivery department can start working without knowledge
gaps.
Involve delivery in the transformation phase
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To make sure that the new processes for the customer are properly aligned with
Infrastructure Outsourcing Services (IOS), the delivery departments should constantly be
involved in the transformation phase so they know what they have to deliver, and can
come up with better or improved solutions and processes before it is all in place.
4.2.4 Decrease or Increase in customer satisfaction
To determine which of the „handshakes‟ has the biggest decrease of the customer
satisfaction we recorded the answers on the question, with ratings from 0 (as the highest
decrease), 2 (decrease),3 (neutral),4 (increase), 6 (highest increase).
We used 0 and 6 for the biggest outliners to make sure that the differences between
„highest decrease‟ and „highest increase‟ are clearly visible, similarly for „highest influence‟
and „high influence‟. Used data can be found in Appendix 12 – „Influence of the „handshakes‟ on
Customer Satisfaction‟.
Comparing the mean between the different „handshakes‟, the HTD gives the highest
decrease in customer satisfaction. This is based on the mean and the spread of the values
around the mean. HTD gives a mean of 2.379, which is the lowest when compared to
HST‟s 2.478 and HTT‟s 2.477. The score for this question ranges between 0 and 6, where 0
is the highest decrease and 6 the highest increase.
Handshake Mean
Handshake between Sales to Transfer (HST) 2.478
Handshake between Transfer to Transformation (HTT) 2.477
Handshake between Transformation to Delivery „soll‟ (HTD) 2.379
Table 12 Effect on customer satisfaction per handshake 6 = High Increase, 0 = High decrease
4.2.5 Influence on the customer satisfaction
To determine which of the „handshakes‟ has the biggest influence on the customer
satisfaction we recoded the answers on the question to 0 (no influence),2 or 3 (normal
influence),-4 or 6 (highest influence). We used 0 and 6 for the biggest outliers to make sure
the differences between „lowest influence‟ and „low influence‟ are clearly visible, similar for „highest
influence‟ and „high influence‟. The data used can be found in Appendix 13 – „Effect on customer
satisfaction of the „handshakes‟
Taking the differences in means into account between the „handshakes‟, it seems that the
HTD has the highest influence on the customer satisfaction. This is based on the mean and
the spread of the values around the mean. HTD gives a mean of 4.474, which is the highest
compared to HST‟s 4.055 and HTT‟s 4.207. Based on a score of 1 to 5, where 0 is the
lowest influence on the customer satisfaction score, and 6 is highest influence on the
customer satisfaction score.
Handshake Mean
Handshake between Sales to Transfer (HST) 4.055
Handshake between Transfer to Transformation (HTT) 4.207
Handshake between Transformation to Delivery „soll‟ (HTD) 4.474
Table 13 Influence of the handshake on the customer satisfaction 0 = No influence, 6 = Very high influence
-27-
4.2.6 Differences between groups on the perception of the handshake by groups
The research does show a difference between the „grade‟ of the people working and the
perception of the „handshakes‟, a small difference can be seen in group B compared to the
other groups this could be explained that the people in group B are not as experienced as
the people in the other groups. Due to the fact that the grade says something about the
maturity of the employee, it can be stated that employees who have been working for
Capgemini for a longer period of time perceive the „handshakes‟ similarly (data can be found
in Appendix 16 – „Grade compared to the „handshakes‟).
Figure 9 Perception of the „handshakes‟ by grade
Comparing if people came from a deal, to the perception of the „handshakes‟, did not result
in a difference between scoring a „good‟ or „bad‟ „handshake‟ (data can be found in Appendix
17 – „Deal compared with „handshakes‟‟)
4.2.7 „Handshakes‟ viewed from the different groups
For this part of the research the respondents are put into groups, according to where they
work.. Someone working in the sales phase is put into the Sales group; likewise someone
that works in the Transfer (T) phase is put into the transfer group; someone who works in
Transformation is put into the Transformation group and finally, someone who works in
the Delivery phase is put into the delivery group. These groups are compared to each other
on the basis of „handshakes‟.
It is worth noting that a part of the respondents do not see a „handshake‟ in the process.
0%
10%
20%
30%
40%
50%
60%
70%
HST: Yes, a good
handshake
HST: Yes, a bad
handshake
HST: No
HTT: Yes, a good
handshake
HTT: Yes, a bad
handshake
HTT: No
HTD: Yes, a good
handshake
HTD: Yes, a bad
handshake
HTD: No
B
C
D
E
-28-
Handshake between sales and transfer viewed from the groups involved
Although there is not much data available from the different groups, a visible difference
can be observed between the Sales group and the others. The Sales group itself states that
there is a good „handshake‟ between the Sales phase and Transfer phase, the other
departments state that this is different. This group also shows a big difference between the
groups active in the Sale phase and the other groups.
Figure 10 Perception of the handshake between Sales and Transfer by departments involved in Sales phase
Handshake between Transfer and Transformation viewed from the groups
involved.
The respondents involved in the Transfer phase do note that the „handshake‟ can be
improved upon. Also, the results are more in line with the other phases. But due to the fact
that the number of respondents on this specific „handshake‟ is low, further research should
be conducted
Figure 11 Perception of the handshake between Transfer and Transformation by departments involved in
Transfer phase
,0
10,0
20,0
30,0
40,0
50,0
60,0
Yes, a good handshake
Yes, however a bad
handshake
No
Departments involved in the Sales phase about HST
Other departments about HST
,0
10,0
20,0
30,0
40,0
50,0
60,0
Yes, a good handshake
Yes, however a bad
handshake
No
Departments involved in Transfer phase about HTT
Other departments about HTT
-29-
Handshake between transformation and delivery viewed from the different
groups involved
There is a small difference between the Transformation and the Delivery phase with regard
to the „handshake‟ itself, although the difference is varied from the other „handshakes‟; the
People involved in the Transformation phase believe that the „handshake‟ is worse than the
respondents working in the Delivery „soll‟ phase (data can be found in Appendix 18 –
„Handshakes‟ compared to departments‟)
Figure 12 Perception of the handshake between Transformation and Delivery „soll‟ by departments involved in
Transformation phase
4.2.8 Discussion of the Hypotheses
This part discusses the hypotheses as they were formulated earlier.
1. Hypothesis 1: In case of a satisfactory „handshake‟ between sales and transfer there is
a positive correlation with customer satisfaction
2. Hypothesis 2: In case of a satisfactory „handshake‟ between transfer and
transformation there is a positive correlation with customer satisfaction
3. Hypothesis 3: In case of a satisfactory „handshake‟ between transformation and the
delivery organization there is a positive correlation with customer satisfaction
Hypothesis 1,2 and 3 are clearly shown in the collected data and as such are not rejected.
Every step in the process has an influence on customer satisfaction and given the data, they
all have a decrease in the customer satisfaction level.
Hypothesis 4: In case of dissatisfaction between sales and transition there is a positive
correlation with the dissatisfaction between transformation and the delivery organization.
Due to the number of people that see all „handshake‟ it is not possible to accept the
hypothesis. Observed is that when the first „handshake‟ is seen as a bad handshake, the other
„handshakes‟ are also considered as a bad handshake. The analysis can be found in Appendix
15 – „Analysis of the „handshakes‟ given a bad „handshake‟ between Sales and Transfer‟
,0
10,0
20,0
30,0
40,0
50,0
60,0
Yes, a good handshake
Yes, however a bad
handshake
No
Departments involved in Transformation phase about HTD
Other departments about HTD
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4.2.9 Relation between the process steps and responsibility
Reviewing the analysis, the conclusion is that the responsibility of all the process steps lay
with different teams and managers, as depicted in Figure 13 and are overseen by the
Service Delivery Director who is ultimately responsible for the complete profit and loss of
the outsourcing process.
Figure 13 Relationship between the lifecycle' phases and the responsible manager
Sales
Delivery
‘ist’
Delivery
‘soll’
Transition
Sales
manager
Transition
manager
(Service)
Delivery
Manager
‘soll’
Service
Delivery
Director
(Service)
Delivery
Manager
‘ist’
-31-
Another observation is that the relation between „handshakes‟ and customer satisfaction
differs between the respondents of the qualitative and quantitative research as can been
seen in the graph of Figure 14.
Figure 14 Different „handshakes‟ in relation to customer satisfaction over time
The view of the first „handshake‟ is similar. The customer is still satisfied, but the first cracks
are presenting themselves according to the respondents of both researches. The assessment
of the second „handshake‟ differs between the two groups. The respondents of the
quantitative research seem to experience a more dissatisfied customer between the transfer
and transformation than the respondents of the qualitative research. The respondents of
the second research also experience that after the transfer to delivery the satisfaction of the
customer is still declining which contradicts the experience of the interviewees of the first
group.
+
-
0
Satisfaction
t
1
2
3
1
2
3
Response qualitative research
Response quantitative research
1 = HST
2 = HTT
3 = HTD
-32-
The influence of the „handshakes‟ on the satisfaction is corresponding with the Kübler –
Ross model. The overlaying graphs are shown in figure 15 is called the Kuilman-
vanTilburg IT outsourcing Satisfaction-Transition model.
Figure 15 Kuilman-vanTilburg IT Outsourcing Satisfaction-Transition model
In Figure 15 the relationship between the „handshakes‟ and the satisfaction level is displayed
in relation to the stages within the Kübler-Ross model. The results of both researches fit in
this model.
+
-
0
Satisfaction
t
1
2
3
1
2
3
Response qualitative research
Response quantitative research
1 = HST
2 = HTT
3 = HTD
Anxiety Happiness Fear Threat Guilt Depression Gradual
Acceptance
Moving
Forward
-33-
5 Conclusion
In this chapter the answer to the problem statement is presented and the research question
is answered. The aim of this research was to gain an insight into the dissatisfaction of
customers during the start of the outsourcing lifecycle.
The following research question was formulated:
„The research is aimed at gaining knowledge and insights with respect to the
influence of friction of the „handshakes‟, in the process
sales>transfer>transformation>delivery „soll‟ on the customer satisfaction, during
the start of the outsourcing life cycle, concerning the customer and the people
involved in the early stages of the outsourcing life cycle.‟
The research shows that the „handshakes‟ between the different phases in the outsourcing
lifecycle have a significant impact on customer satisfaction. Although the impact of the
„handshake‟ between sales and transfer (HST), the „handshake‟ between transfer and
transformation (HTT), and the „handshake‟ between transformation and delivery „soll‟ (HTD)
are not the same, there are similarities in the cause of the dissatisfaction.
In general, the keywords found in all three „handshakes‟ are communication, governance,
quality of the people (the right people on the specific task), opportunistic behavior of sales
and egos of delivery. Furthermore, it became clear that the outsourcing lifecycle has a
resemblance to the Kübler-Ross model. Customer satisfaction follows the same pattern as
seen in Figure 16. This means that the process can be predicted and as such, reactions can
be mitigated or the process can pass in a controlled manner.
Figure 16 IT outsourcing Satisfaction-Transition model
When controlling satisfaction, the expectation is that the amplitude will be less steep as it
will also be less deep. Alpha (α) is the gain in time of when the customer is satisfied again.
+
-
0
Satisfaction Anxiety Happiness Fear Threat Guilt Depression Gradual
Acceptance
Moving
Forward
t
-34-
The beta (β) is the gain of the effect on the degree of dissatisfaction of the customer. This
will result in a customer who will be satisfied earlier during the process what will have
impact on the profitability of the contract due to the fact that trust and loyalty of the
customer will raise and additional projects could be awarded.
Figure 17 The expected result of the improvements of the „handshakes‟ on customer satisfaction
Secondly, we found fragmentation in the outsourcing lifecycle, which has a negative
influence on the „handshakes‟ between the phases. The interaction between the phases and
the subsequent teams is low and gives a type of information asymmetry. Information
asymmetry means that the „handshake‟ is not complete. It is hard and may be impossible to
transfer also what was „read between the lines‟, as it is not formalized. The effect will be
that the expectation does not match what is delivered.
The third conclusion focuses on the growing dissatisfaction and fragmentation that results
in a vexed or disturbed relationship. Due to the fragmentation of the outsourcing lifecycle
a reliable relationship between customer and supplier is hard to realize. The customer is not
talking to the same individual concerning the relation. Also, the relationship will be
pressurized when the relationship is compromised by the cause of the dissatisfaction.
5.1 Recommendations
As a result of our research this chapter outlines some recommendations of how to
optimize the outsourcing lifecycle, with the aim of improving customer satisfaction at the
start of the lifecycle, through to the delivery „soll‟.
Firstly one needs to gain control over the fragmentation. Appointing a supervisory
manager can solve this. The role of the supervisory manager is to assure that the
„handshakes‟ between the different teams and processes is done according to the
-35-
expectations of both parties. This will assure that there will be no „information asymmetry‟
as described.
The avoidance of the „information asymmetry‟ will improve customer satisfaction, as it will
also improve the working atmosphere within Capgemini due to the fact that irritation
arising from the „handshakes‟ and the number of dissatisfied customers is decreased. Both
will have leverage on the profitability of the contract. People who are satisfied with their
jobs tend to make fewer mistakes and are therefore more productive. Customers who are
satisfied will grand additional work more easily.
Secondly, the supervisory manager should have enough mandates to compel the project
teams to finish their assignments according to plan. As transitions tend to overrun on cost
(and time), the supervisory manager should have a budget to compensate for the overrun.
The transition or program managers, are still accountable for the overruns, it will avoid the
fact that the (Service) Delivery Manager is starting with a budget constraint. This budget
for the supervisory manager should be 1% or 2% of the whole deal‟s budget. The
practicality of the budget should be examined more closely to match reality.
The supervisory manager will also be the chairman of the steering committee as the
representative of the Service Delivery Director (SDD). Currently the representatives of the
SDD are all a part of the outsourcing lifecycle and bias is not unlikely.
The supervisory manager reports directly to the SDD, as he/she is responsible for the
profit and loss of the whole outsourcing lifecycle.
It is important that the customer feels that they are being taken seriously during the whole
lifecycle and not only during the sales phase. Attention from executives should provide for
a solid relationship, which can be used when performance drops below expectations and
satisfaction is declining from both sides of the relationship. Also, there are issues that could
be addressed from the supplier, for example the need for a proper governance structure
within the customer‟ organization so that the right people communicate to each other on
both sides to assure an optimal functioning relationship.
Another recommendation would be to check with the customer, if the specifications are
still applicable before they are implemented. This is especially more prominent when the
specifications are drawn some time before the implementation, as the landscape of the
customer is ever changing and what was needed yesterday could be obsolete tomorrow.
The result of checking with the customer is that the expectations of the result will be in line
with that what is expected and will have an impact on customer satisfaction (Huang, 2008).
The expected result of the implementations will be an increased financial result at the end
of the outsourcing lifecycle.
5.2 Further research
We recommend that in any future research, the focus from the customer will be researched
in greater depth; it might be possible that there are issues that influence the processes such
as: the level of resistance, obstinacy behavior of different parties involved in the process
like third parties and former suppliers from customers. The role of the customer in failed
-36-
projects should also be examined in more depth, so these issues can be tackled before they
possibly occur. It should be determined what the reason is that specifications from the
customer do not match the actual expectations of the customer, and how this can be
improved.
Given the collected data during this research on the outsourcing lifecycle, we estimate that
the total cost of the lifecycle could decrease when „handshakes‟ of the outsourcing lifecycle
are managed firmly. The expectations will be met earlier in the lifecycle with less
dissatisfaction as a result. The initial cost could increase, but the cost for rework further on
in the process could be avoided what will result in lower total cost. We expect that the total
cost of the lifecycle will decrease so the profitability of the outsourcing lifecycle can
increase. This expected result should be determined with one or more pilot studies.
It is advised that the customer satisfaction is continuously measured and monitored during
the different steps in the beginning of the outsourcing lifecycle.
5.3 Management implications
This research can be applied to other companies where the main process can be described;
one department sells the service/product to a customer and another department has to
deliver the service/product. This results in the shift of the work and the customer (a
„handshake‟) between the different departments during a project.
This could be either be a project organization where the sales department sells the project
and then hands the project and the customer over to the actual departments that have to
deliver the product/service to the customer. This would apply to organizations where Sales
is split from the research development department or the project department.
The proposed solution, where a supervisory manager is responsible for maintaining the
„handshakes‟ between the different departments and the normal managers will be in charge
of the actual process but will not be involved with managing the „handshakes‟ between the
different departments, should work for these companies
-37-
Appendices
-38-
-39-
Appendix 1 - Open interview invitation
The English version followed by the original Dutch version.
Dear,
To complete our study at the Nyenrode Business University we are writing our thesis. Our
thesis subject is related to the sourcing lifecycle after the deal has been signed. To give us a
better understanding about the sourcing lifecycle within Capgemini we would like to
discuss the lifecycle with you. This will help us to determine the questions we are going to
ask in a later stadium. We believe a meeting slot of one hour is enough.
Below is a small explanation of the phases we want to research and what we want to
discuss with you.
Figure one shows the thesis area
The steps after the deal has been closed and which we are going to research are
 Transfer from Sales to Transfer
 Transfer from Transfer to Transformation
 Transfer from Transformation to Delivery
We want to determine if these steps are of influence on the customer satisfaction.
Figure 1 Sourcings lifecycle
Figure 2 Relation client satisfactions
-40-
Original Dutch version
Beste,
In het kader van onze studie aan Business Universiteit Nyenrode zijn we bezig met onze thesis. Ons thesis
onderwerp gaat over de sourcings lifecylce op het moment dat de deal gesloten is.
Om ons een idee te geven van hoe de sourcings lifecycle wordt gepercipieerd zouden wij graag met u van
gedachte willen wisselen om zo in een later stadium gerichte vragen te kunnen formuleren voor ons onderzoek.
Wij schatten in dat een gesprek van één uur voldoende is.
Onderstaand een korte uitleg van de fasen waar we onderzoek naar willen doen en waar we met u over van
gedachten willen wisselen.
In figuur 1 laten we zien wat ons thesis gebied is.
De stappen die na de deal volgen en welke wij willen onderzoeken zijn
 Overdracht van vanuit sales naar transformatie
 Overdracht van transformatie naar delivery
 Delivery
Wij willen kijken of en hoe deze stappen van invloed zijn op de tevredenheid van de klant.
Figure 1 Sourcings lifecycle
Figure 2 Relation client satisfactions
-41-
Appendix 2 - Checklist open interview
Question 1
Who is responsible for the process Transfer-Transformation-Delivery
Question 2
Who should be responsible for the process Transfer-Transformation-Delivery
Question 3
What are the major issues in the process Transfer-Transformation-Delivery with regard to
client satisfaction
Question 4
What are the major issues in the process Transfer-Transformation-Delivery with regard to
the client supplier relationship
Question 5
Where in time are the „handshakes‟ between the process steps in the following figure?
Question 6
When do the different Phase „handshakes‟ take place (in x months)
Question 7
How can the relationship between the customer and the supplier be improved, and how
can the client satisfaction be improved, taking the different Phases (Transfer-
Transformation-Delivery) into consideration.
-42-
Appendix 3 - Summaries open interviews
Interviewee A
Question 1 - Who is responsible for the process Transfer-Transformation-Delivery
Eerst sales welke daarna het geheel aan delivery overdraagt. (Tot de eerste hand shake is
sales verantwoordelijk.) Wanner de deal helemaal rond is 100% naar delivery
(IOS/DELIVERY na ondertekening) BCS (bid control sheet akkoord > dan gaat de
verantwoordelijkheid naar delivery) Zodra alles naar delivery overgedragen is gaat sales
verder naar de volgende klus.
Question 2 - Who should be responsible for the process Transfer-Transformation-
Delivery
Delivery, solution architect doortrekken voor de continuïteit +commitment, niet te snel
ontvlechten en aanspreekbaar blijven „als‟.
Transfer = minimaal knowledge transfer
Question 3 - What are the major issues in the process Transfer-Transformation-
Delivery with regard to client satisfaction
Mismatch qua verwachting tijdens de sales fase. Doorlooptijd „kort‟ is de tijd wel realistisch
kan de klant dat wel in dat tempo?. Snelheid van leverancier niet in lijn met snelheid klant.
Scherpe doorlooptijd + scherpe prijs door de salesafdeling + klant eis.
Build run vs run build run (leercurve effectiever), run build run werkt beter, door een beter
beeld van de as-is situatie
Klant met 1ste
keer uitbesteden is beter om daar run build run te doen
Kwaliteit van de regie door de klant is essentieel (cmmi level?)
1ste
generatie verwacht meer dan wat ze afnemen
Kwaliteit van de transitiemanager, replacement van de man.
Question 4 - What are the major issues in the process Transfer-Transformation-
Delivery with regard to the client supplier relationship
Rimpels masseren, maar lek repareren niet.
Multi level governance model, meerdere niveau‟s contacten + voorgang goed
communiceren. Schakelen op de juiste niveau‟s.
Pro actief + Openheid van zaken
Kwaliteit van de engagement mensen (key posities) Transitie Manager + de managers in de
governance. Toegevoegde waarde door rol in de governance.
„echt snappen van elkaar‟
Question 5 + 6 (is a drawing) - Where in time are the „handshakes‟ between the
process steps in the following figure? When do the different „handshakes‟ take place
(in x months)
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Bij transformatie onder 0
Dieptepunt: TO-BE, niet wat ze wilden (delivery)
Alles nieuw + blijven werken
Elementen bij de klant, volwassenheid van de klant.
Question 7 - How can the relationship between the customer and the supplier be
improved, and how can the client satisfaction be improved, taking the different
phases (Transfer-Transformation-Delivery) into consideration.
Realistische planning + kosten door sales
Juiste governance + Transitiemanager + bewezen oplossing!
Klant kiest goedkoopste aanbieding, klant veroorzaakt zelf de spanning door de kosten die
gehaald moeten worden.
Goedkoper door „bleeding edge‟ oplossing, maar is die wel betrouwbaar??
Delivery manager eerder vanaf de sluiting van het contract erbij betrekken Ofwel eerder de
senior delivery manager en de DM to-be aansluiten in het traject.
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Thesis_MvT_WK_PTMSc13_final_v1 2

  • 1. Improving customer satisfaction in infrastructure outsourcing Influencing the different handshakes to increase customer satisfaction This is the Master thesis Part-time MSc General Management of Authors: ing. Mark van Tilburg bc. Willem Kuilman Breukelen, January 8 Nyenrode Business University Straatweg 25 3621 BG Breukelen Final Version
  • 3. -III- Improving customer satisfaction in infrastructure outsourcing Influencing the different handshakes to increase customer satisfaction This is the Master thesis Part-time MSc General Management of Authors: ing. Mark van Tilburg (20090013) ……………………………………… bc. Willem Kuilman (20090035) ……………………………………… Faculty Supervisor: Prof. Dr. Andrzej Hajdasinski MEng Company Supervisor: Ir. Hans van Heffen Second Reader: Drs. Hans ten Rouwelaar Breukelen, January 8 Nyenrode Business University Straatweg 25 3621 BG Breukelen
  • 5. -V- Colophon Title: Improving customer satisfaction in infrastructure outsourcing Sub Title: Influencing the different „handshakes‟ to increase customer satisfaction Version date: Final, January 8th , 2012 Authors: ing. Mark van Tilburg Prinses Irenestraat 31a 4671 CT Dinteloord +31 6 13 26 65 09 mark.van.tilburg@businessmonitor.nl bc. Willem Kuilman Hongerlandsedijk 974 3001 LW Spijkenisse +31 6 42 01 27 88 info@str84ward.nl Faculty Supervisor: Prof. Dr. Andrzej Hajdasinski MEng Nyenrode Business University International Center for Business and Diplomacy Straatweg 25 3621 BG Breukelen +31 346 291 724 Company Supervisor: Ir. Hans van Heffen Head of Infrastructure Outsourcing Services Papendorpseweg 100 3528 BJ Utrecht +31 306 891 205 Sponsoring Company: Capgemini Nederland B.V. Papendorpseweg 100 3528 BJ Utrecht +31 30 389 0000 Second Reader Drs. Hans ten Rouwelaar Nyenrode Business University Center for Management Accounting & Control Straatweg 25 3621 BG Breukelen +31 346 291 443 Disclaimer: All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior consent of the authors.
  • 7. -VII- Preface This paper is the final assignment of our study at Nyenrode Business University. During our Master of Science in Management course, we have gained great knowledge from various professors and assistant professors. For both of us this paper also marks a mature new start in looking at issues, in work, as in life. During discussions with Hans van Heffen (our company sponsor), on the outsourcing process, a research subject soon became apparent: the outsourcing process. The end result gave way to a research question that forms the basis for this thesis. But first a short introduction about us: Willem Kuilman works for Capgemini Nederland B.V, within the Infrastructure Outsourcing Services division. A big part of Capgemini‟s business is outsourcing, accounting for approximately 36% of the organization‟s revenue (Capgemini, 2010). Willem has fulfilled several roles within the organization from technician, controller, to delivery manager. Mark van Tilburg is one of the owners of BusinessMonitor, a marketing research company based in the Netherlands. The work BusinessMonitor does is (customer) satisfaction related research, on behalf of a variety of companies. Capgemini, our sponsoring company, is a global leader in outsourcing. Its collaborative business approach allows the customer to achieve a better, faster and more sustainable result. Capgemini has more than forty years of experience, is presently operating in more than thirty countries and has a global workforce of over one hundred and fifteen thousand professionals, of whom fifteen thousand are active in the outsourcing industry. Capgemini is currently collaborating on some of the world‟s largest outsourcing contracts. Leading companies entrust Capgemini as a results-driven business partner to solve their most complex business problems. Capgemini‟s diversified approaches to outsourcing range from traditional engagements that focus on quick cost reductions to value-added transformational arrangements that impact deeper, broader changes within organizations. As customers‟ needs are changing, Capgemini provides flexible and scalable solutions through over one hundred integrated delivery centers around the globe. We would both like to offer a word of thanks to all those who have helped us in our thesis. We would especially like to thank Ir. Hans van Heffen, Head of Infrastructure Outsourcing Services from Capgemini Nederland, for enabling us to undertake our research without restrictions. Furthermore, we would like to thank Prof. Dr. Andrzej Hajdasinski MEng who, as our faculty supervisor, gave us lots of advice and inspiration. It was fun to exchange ideas (and „Jantje‟ jokes) with him.
  • 9. -IX- Executive Summary This thesis describes the diversified issues regarding the customer satisfaction during the outsourcing process in relation to the outsourcing lifecycle within Capgemini. Also, there are recommendations made to improve the processes to increase the customer satisfaction during the outsourcing lifecycle. The outsourcing lifecycle consists of different process steps. These steps are Sales - selling the service to a customer; Transfer - transferal and delegation of the old structure from the customer to the supplier; Transformation - changing the processes in place to the customer, to match the new processes that will be used; Delivery „soll‟ - when the customers' processes are upgraded to match the processes used by Capgemini. With regard to the lifecycle, there are issues that arise from the literature such as; not being totally honest with regard to the real costs. Project issues such as Student syndrome - starting too late; Parkinson‟s Law - when there is time, all time will be used; Task convergence - when one task delays all other parts of the project. Change processes involve emotions regarding the change that is happening to the people working for the customer, generating friction between the supplier and the employees of the customer. Third party involvement also plays a role in friction when another company maintains the project and creates a boundary between the supplier and the customer. This research focuses on the internal processes within Capgemini while delivering its service to customers. „Handshakes‟ are referred to; to describe moments where the work is transferred between the different processes during the lifecycle and project teams involved. The main focus is on the „handshakes‟ between the different steps in the outsourcing lifecycle, with special regard to the processes after the deal has been closed, and a formal contract has been signed with the customer. The process steps involved are sales, transfer, transformation and the delivery „soll‟. To gather data on the „handshakes‟, multiple methods are used in this research to gain insights on the subject. These methods include literature study, qualitative interviews with senior management and quantitative interviews with the people working in the various departments. During the research it became clear that the main issue lay with the contents of the „handshakes‟ and the people involved. During the „handshake‟ different teams are involved but when the „handshake‟ is finished, the old teams are not involved anymore. A second issue that arose, was that the people undertaking the project are also responsible for customer contact, which decreases the options to change the service during the process. Given the data collected, the main conclusion that can be made, is that during the entire process, a supervisory manager should be in charge to manage the entire lifecycle as well as the „handshakes‟ between the different project teams in particular. This person should keep an eye on the „handshakes‟ and make sure they are done correctly, but ultimately is not responsible for the customer relation, and just for the internal processes. One of the main tasks of this supervisory manager would be to remove the information asymmetry between
  • 10. -X- the departments by linking them closely together. Also the supervisory manager should be able to change the budget allocated between the steps in the process, so that budget overruns can happen when they solve issues further on in the process. As the supervisory manager is not involved with the process but only has an overseeing role, he/she should also be chairman of the steering committee to make the „handshakes‟ as smooth as possible. Another important suggestion for change is that the responsibility for a customer should be split between the project team and a relationship manager, where the project team delivers the product/service, while the relationship manager maintains customer contact and corrects the project team when something goes wrong during one of the implementation phases, without being involved in the actual execution. This should make it possible for customer to address issues properly at the right levels, for example CxO‟s on both sides linked to each other, without generating friction between the project teams and the customer. According to the collected data and its interpretation, the process could be improved by splitting the responsibility of the project and the customer. As such, it should make it possible for issues to be corrected faster and earlier on in the process. When the process steps are better linked, (because of management by a supervisory manager) with each other, the cost of the steps should decrease where the rework in the end of the lifecycle decreases. The supervisory manager should as such be able to shift budgets from one part of the process to another. A second optimization would be to check the specifications with the customer before the project actually starts; often the specifications are changing after the sales phase, as the world is moving so are customers‟ specifications. Other companies that have a process in place where there is a „handshake‟ between the sales department and the department that has to deliver the service/product to the customer. These companies could also benefit by adding a supervisory manager to the process who makes sure that the „handshakes‟ are conducted properly and the sales department remains involved with the other steps as long as needed, to make sure that the expectations of the customer are met.
  • 11. -XI- Table of Contents Preface VII Executive Summary IX Table of Contents XI List of Tables and Figures XV Abbreviations XVII 1 Introduction 1 1.1 Definition of Outsourcing 1 1.2 The outsourcing lifecycle 2 1.3 Research focus 2 1.4 Types of outsourcing and scope 3 1.5 The company problem statement and the research question 3 1.6 Conceptual model 4 1.7 Research design 4 1.8 Relevance 5 1.9 Structure of this paper 5 2 Theoretical framework 7 2.1 The outsourcing lifecycle 7 2.1.1 We are going to outsource 7 2.1.2 The sales phase 7 2.1.3 The transfer phase 7 2.1.4 The transformation phase 8 2.1.5 The delivery phase 8 2.1.6 Prolongation or termination phase 8 2.2 Known issues from the phases in the conceptual model 8 2.2.1 Issues related to cost 8 2.2.2 Outsourcing seen as a project 9 2.2.3 Third party involvement 10 2.2.4 Emotions 10 2.3 The relation between the outsourcing lifecycle and Kübler-Ross 11 2.4 Hypotheses 12 3 How the study was conducted 13 3.1 Research Subjects 13 3.2 Data collection 13 3.2.1 Phase one, qualitative data 13 3.2.2 Phase two, quantitative data 14 3.3 Reliability and validity 15 3.3.1 Qualitative phase 15 3.4 Quantitative phase 15 4 Results of data collection and analysis 17 4.1 The results of the qualitative research 17
  • 12. -XII- 4.1.1 Question 1 17 4.1.2 Question 2 17 4.1.3 Question 3 17 4.1.4 Question 4 18 4.1.5 Question 5 20 4.1.6 Question 6 20 4.1.7 Question 7 21 4.2 The results of the quantitative research 22 4.2.1 Handshake between Sales and Transfer (HST) 22 4.2.2 Handshake between Transfer and Transformation (HTT) 23 4.2.3 Handshake between Transformation and Delivery „soll‟ (HTD) 25 4.2.4 Decrease or Increase in customer satisfaction 26 4.2.5 Influence on the customer satisfaction 26 4.2.6 Differences between groups on the perception of the handshake by groups 27 4.2.7 „Handshakes‟ viewed from the different groups 27 4.2.8 Discussion of the Hypotheses 29 4.2.9 Relation between the process steps and responsibility 30 5 Conclusion 33 5.1 Recommendations 34 5.2 Further research 35 5.3 Management implications 36 Appendix 1 - Open interview invitation 39 Appendix 2 - Checklist open interview 41 Appendix 3 - Summaries open interviews 42 Interviewee A 42 Interviewee B 44 Interviewee C 46 Interviewee D 48 Interviewee E 50 Interviewee F 53 Interviewee G 56 Interviewee H 58 Appendix 4 - E-mail questionnaire 60 Appendix 5 - E-mail questionnaire invitation 65 Appendix 6 - E-mail questionnaire reminder 68 Appendix 7 - Response distribution questionnaire 71 Appendix 8 – Sub categories of the categories mentioned in question three 72 Appendix 9 – Sub categories of the categories mentioned in question four 73 Appendix 10 - Sub categories of the categories mentioned in question seven 74 Appendix 11 – Total results of the questionnaire 75 Appendix 12 - Influence of the „handshakes‟ on Customer Satisfaction 87
  • 13. -XIII- Appendix 13 - Effect on customer satisfaction of the „handshakes‟ 88 Appendix 14 - Analysis of the open “improvement” questions with regard to the „handshakes‟ in the questionnaire 89 Appendix 15 – Analysis of the „handshakes‟ given a bad „handshake‟ between Sales and Transfer 92 Appendix 16 – Grade compared to the „handshakes‟ 93 Appendix 17 – Deal compared with „handshakes‟ 94 Appendix 18 – „handshakes‟ compared to departments 95 Bibliography 97
  • 14. -XIV-
  • 15. -XV- List of Tables and Figures Figure 1 Process steps in the outsourcing lifecycle 2 Figure 2 Main types of outsourcing 3 Figure 3 Conceptual model 4 Figure 4 Process of transition based on Kübler-Ross theory (John M Fisher) 10 Figure 5 IT outsourcing Satisfaction Transition model 11 Figure 6 Hypotheses 12 Figure 7 Refined conceptual model 16 Table 1 The various departments and their involvement with the different „handshakes‟ 16 Table 2 Legend of Figure 8 20 Figure 8 Different „handshakes‟ in relation to customer satisfaction over time as seen by the interviewees 20 Table 3 Those who experience of the „handshake‟ between Sales and Transfer 22 Table 4 Influence on customer satisfaction of the „handshake‟ between Sales and Transfer 22 Table 5 Effect on customer satisfaction of the „handshake‟ between Sales and Transfer 22 Table 6 Those who experience of the „handshake‟ between Transfer and Transformation 23 Table 7 Influence on customer satisfaction of the „handshake‟ between Transfer and Transformation 23 Table 8 Effect on customer satisfaction of the „handshake‟ between Transfer and Transformation 23 Table 9 Those who experience of the „handshake‟ between Transformation and Delivery „soll‟ 25 Table 10 Influence on customer satisfaction of the „handshake‟ between Transformation and Delivery „soll‟ 25 Table 11 Effect on customer satisfaction of the „handshake‟ between Transformation and Delivery „soll‟ 25 Table 12 Effect on customer satisfaction per handshake 6 = High Increase, 0 = High decrease 26 Table 13 Influence of the handshake on the customer satisfaction 0 = No influence, 6 = Very high influence 26 Figure 9 Perception of the „handshakes‟ by grade 27 Figure 10 Perception of the handshake between Sales and Transfer by departments involved in Sales phase 28 Figure 11 Perception of the handshake between Transfer and Transformation by departments involved in Transfer phase 28 Figure 12 Perception of the handshake between Transformation and Delivery „soll‟ by departments involved in Transformation phase 29 Figure 13 Relationship between the lifecycle' phases and the responsible manager 30 Figure 14 Different „handshakes‟ in relation to customer satisfaction over time 31 Figure 15 Kuilman-vanTilburg IT Outsourcing Satisfaction-Transition model 32 Figure 16 IT outsourcing Satisfaction-Transition model 33 Figure 17 The expected result of the improvements of the „handshakes‟ on customer satisfaction 34
  • 16. -XVI-
  • 17. -XVII- Abbreviations PON Platform Outsourcing Nederland RFP Request for Proposal TOC Theory of Constraints SDD Service Delivery Director SDM Service Delivery Manager DM Delivery Manager HST Handshake between Sales and Transfer HTT Handshake between Transfer and Transformation HTD Handshake between Transformation and Delivery „soll‟ SPSS Statistical Package for the Social Sciences IOS Infrastructure Outsourcing Services RBR Run-Build-Run OTACE® On Time and Above Customer Expectations (Capgemini‟s instrument for measuring customer satisfaction) CxO Chief x Officer where x can be any sector
  • 19. -1- 1 Introduction Technically speaking, outsourcing acquired a business strategy in 1989 (Brown & Wilson). The very first company to outsource some parts of their business was Eastman Kodak, which was at that time in an extremely difficult financial situation, due to various mergers and acquisitions. The goal of Eastman Kodak was to cut IT cost by 50% by turning over its four data centers and three hundred workers to IBM (Loh & Venkatraman, 1992). IT outsourcing became a hot topic in board meetings as a strategic choice, due to the fact that this was a deal between two giants and therefore acted as a precedent. Before this outsourcing deal, there were many other companies who outsourced, but never received high exposure in the media. 1.1 Definition of Outsourcing Firstly, we have to define what outsourcing means. There are several definitions of outsourcing: (Off-shore) Outsourcing as described by the Panel of the National Academy of Public Administration for the U.S. Congress and the Bureau of Economic Analysis as (OFF-SHORING: AN ELUSIVE PHENOMENON, 2006) (Kedia & Mukherjee, 2009): - Outsourcing: firms contracting out service and manufacturing activities to unaffiliated firms located either domestically or in foreign countries - Off-shoring: firms shifting service and manufacturing activities abroad to unaffiliated firms or their own affiliates - Off-shore outsourcing: a subset of both outsourcing and off-shoring in that it refers only to those service and manufacturing activities of companies performed in unaffiliated firms located abroad And the definition of the Platform Outsourcing Nederland (PON) (Delen, 2008): - The transfer of services, where if applicable, the accompanying employees and resources are transferred to a specialized service provider and consequently the rendering back of those processes by that provider as services for the duration of the contract at an agreed upon level of quality and a financial compensation structure. And the last definition used by Gartner (Gartner, 2011): - Using external service providers to effectively deliver IT-enabled business process, application service and infrastructure solutions for business outcomes. All the definitions cover the same matter, namely the use of vendors to execute non-core services formerly executed by the customers themselves. Now, having the definition of what we mean by outsourcing we can look at the major steps we recognize in the outsourcing lifecycle.
  • 20. -2- 1.2 The outsourcing lifecycle Six major process steps can be identified in the outsourcing lifecycle (Delen, 2008), (Richards, 2007) as shown in Figure 1. Figure 1 Process steps in the outsourcing lifecycle The first step in the cycle lies in the willingness of the customer to outsource a part or parts of their organization, based on a solid sourcing strategy. It is not only a cost effective factor although this may account for a major part of the decision by the customer, but is also an opportunity to look at alliances to make a proper vendor selection. Once the supplier is selected, the sales phase will start. This is the stage where all agreements are prepared and formalized with the customer. The sales department takes the initiative in this process. When the deal is closed, most times there will be a transfer of goods and/or personnel. This process of disentanglement and transfer will be referred to in this research simply as 'transfer'. After the transfer, the transformation process commences. This transformation is done in a cost effective manner by standardizing the services and support. Standardizing refers to the possibility to reuse existing solutions and share the existing infrastructure as much as possible without compromising the independence of the customer. This is called the Delivery „soll‟. The term „soll‟ refers to the preferred or desirable situation in comparing to the current situation what is called „ist‟. These terms „ist‟ and „soll‟ have their roots in literature regarding change processes. When the contract term ends, it can either be extended, or the outsourcing process will repeat itself for the customer. In this case the existing supplier has to hand over the goods and in certain cases, its personnel associated with the account, to a new supplier or back to the customer. 1.3 Research focus Our research is focused on the „handshakes‟ between the sales phase and transfer phase, the transfer phase and the transformation phase and between the transformation phase and delivery „soll‟. In this research the term „handshake‟, refers to the transferal of all responsibilities, knowledge and other relevant information from one project team to the next one following the outsourcing lifecycle. This includes also the change of customer‟s primary or secondary point of contact. A research boundary set is that the focus on the first handshake is from the moment the contract is signed and the handover from sales to the delivery organization commences until the delivery „soll‟ Everything else regarding the outsourcing lifecycle will be considered „ceteris paribus‟. The agreement between the supplier and customer is created between the sales, legal, and human resource departments and the delivery units, and is finally signed by both parties. The disentanglement can start directly. 350decision by customer to start with sourcing Sales phase Disentanglement Transfer Transfer Transfor- mation Transition Delivery Soll Prolongation of contract or termination Thesis domain
  • 21. -3- 1.4 Types of outsourcing and scope The first definition mentions different types of outsourcing. In general, we recognize five general types of outsourcing although some will diverse even more (Delen, 2008). In this research Greenfield sourcing, follow-up sourcing and the outsourcing are considered. Figure 2 Main types of outsourcing In Figure 2 the main types of sourcing are depicted, as are the different relationships between the supplier and customer. In this research the focus is on the outsourcing deal with the transfer of goods and personnel. All other varieties are kept out of scope. Furthermore, the focus is on the so-called Run-Build-Run (RBR) situation whereby the existing IT environment, delivery „ist‟, is taken over from the customer. During this period the new environment is built after which the old environment is replaced with the new one. The new build environment is the delivery „soll‟. This process will be referred to in this research as 'classical' outsourcing. 1.5 The company problem statement and the research question All companies are looking for ways to improve their service. One way is to optimize existing processes to gain advantages. Capgemini is a company that always looks for ways to improve its processes and has asked us to investigate how the following company problem statement can be influenced. The company problem statement is: How can we mitigate the dissatisfaction between the customer and the supplier during the beginning of the outsourcing lifecycle after the deal has been closed?
  • 22. -4- Academic theory offers a lot of written material regarding the subject of customer satisfaction and the relationship with the supplier. Customer satisfaction is a measure of how products and services supplied by a company meet or surpass customer expectation. In general satisfaction is used as a measure between customer attitude and future intentions (Garbarino & Johnson, 1999). With regard to the relationship there is already a lot of knowledge in the literature so the focus of this research is not on the relationship with the supplier. But the focus is on the processes within the supplier boundary, resulting in the following research question: The research is aimed at gaining knowledge and insights with respect to the influence of friction of the ‘handshakes’, in the process sales>transfer>transformation>delivery „soll‟ on the customer satisfaction, during the start of the outsourcing life cycle, concerning the customer and the people involved in the early stages of the outsourcing life cycle. The research will contribute to a better understanding what the impact is from the handshakes between the process steps sales>transfer>transformation>delivery „soll‟ and how to improve and manage the „handshakes‟ in the process more effectively to influence customer satisfaction in a positive way. This in its turn will result in a win-win situation for both customer and supplier in an outsourcing deal. 1.6 Conceptual model When studying the outsourcing lifecycle in Figure 1, we notice that there are certain moments where work has shifted from one process step to another. These moments are what we call the „handshakes‟ in the outsourcing lifecycle. The relationship between the process steps and the „handshakes‟ forms the basis of our conceptual model as displayed in Figure 3 Figure 3 Conceptual model The aim of this research is to obtain an insight into how much the three „handshakes‟ influence customer satisfaction. 1.7 Research design The research is split into three parts. The first part is a literature study. The second and third parts are the more practical parts of the research. Part two is a qualitative study consisting of interviews with experts in the field, regarding the process and the different SALES DELIVERY ‘Soll’ TRANSFOR MATION Customer Satisfaction Handshake between Transformation en Delivery ‘soll’ (HTD) Handshake between Sales and Transfer (HST) Handshake between Transfer en Transformation (HST) TRANSFER
  • 23. -5- „handshakes‟. The interviews are conducted with senior managers and executives or former executives involved with the outsourcing business. The last part is a questionnaire submitted to employees of Capgemini that are involved in the outsourcing process. 1.8 Relevance This research is relevant scientifically and managerially. First, we will make a connection between the different scientific approaches of this subject. In literature there is not much research found with the focus of „handshakes‟ in the outsourcing lifecycle or similar processes. Secondly, the managerial relevance is that the insight into the „handshakes‟ and the effect they have on customer satisfaction is clarified, which in turn makes it possible to control the process more vigorously. This particular method of research is also usable for other managerial questions regarding „handshakes‟ and the diverse processes in a variety of companies and not only for the outsourcing lifecycle in the IT business. 1.9 Structure of this paper Following the introduction, the first focus will be on the theories related to the research question, and there will be a discussion of concepts used. Also, a number of hypotheses will be exemplified in this part and what we expect from the research will be discussed. In Chapter Three the research methods are described; why they were chosen and what is expected from them. In Chapter Four the results will be presented and analyzed. Qualitative and quantitative researches are both presented. There is also a discussion regarding the hypotheses performed. In the last chapter, Chapter Five, the conclusions and recommendations as well as suggestions for further research will be presented. All interviews of this research have been done in Dutch; some parts of the appendices are in Dutch where they reflect actual answers of the respondents. Where possible the English text has been added to elaborate on the contents of the appendices. Two of the appendices are not translated entirely since they are the actual representation of answers given by the respondents; these are the open answers in Appendix 3 – „summaries open interviews‟ and Appendix 11 –„total results of the questionnaire‟. Those open answers are summarized during the analysis. Appendix 8 – ‟sub categories of the categories mentioned in question three‟, Appendix 9 – „sub categories of the categories mentioned in question four‟ and Appendix 10 – „sub categories of the categories mentioned in question seven‟ are the summarizations of the open answers from Appendix 3 – „summaries open interviews‟ and Appendix 14 „Analysis of the open “improvement” questions with regard to the handshakes in the questionnaire‟ is the summarization of the open answers of Appendix 11 – „total results of the questionnaire‟.
  • 24. -6-
  • 25. -7- 2 Theoretical framework Here the element of the conceptual framework is discussed in greater detail. The „handshakes‟ will be described, as well as the known barriers and pitfalls that are influencing factors on customer satisfaction, are also pointed out. Secondly, we will elaborate briefly on outsourcing as a project phenomenon. Finally, the emotional response to change and the relationship with outsourcing as an anticipated behavior is discussed. 2.1 The outsourcing lifecycle In this section the outsourcing lifecycle will be described. Companies decide to outsource parts of their business; they are obtaining services from an external resource (Brown & Wilson, 2005). 2.1.1 We are going to outsource The reasons companies outsource part of their business is diverse, but all come back to the question of costs, as was the case in our example in the introduction, where Eastman Kodak was in financial difficulties. Some other companies have internal managerial challenges, like adequately managing an IT department or want to reduce their staff. Today, more companies use outsourcing as a strategic solution instead as a tactical. They want to outsource the burden of simple managerial work, allowing them to focus on the more core competences of the business. The commonality is that to enter the outsourcing lifecycle, they must first decide that they want to transfer parts of their business to a supplier. 2.1.2 The sales phase In this phase, the scope of the deal is established, the request for proposal (RfP) is developed and the customer assesses the responses from suppliers. During this phase it is common for sales to try to persuade the delivery organization in accepting exemptions in what it can deliver. Finally, a vendor is chosen and the negotiating part of the sales phase will commence. During this phase agreements are put on paper and boundaries are set and both parties sign the agreement. Once the signatures are exchanged, the implementation can start. 2.1.3 The transfer phase This phase consists of two sub phases. The first one is the disentanglement of the services, personnel, and hardware and software assets upon transfer to the supplier. In this stage the customer does not notice a big difference in the service provision. It can be said they get their former service but at a lower cost. The supplier will slowly start to improve parts of the service to make it more robust when possible but great changes are not to be expected. It is a learning curve for the supplier, as in this phase he/she begins to get an idea of what is acquired despite the due diligence in the sales phase. Also the customer begins to know their supplier better.
  • 26. -8- 2.1.4 The transformation phase During this phase the transformation to the supplier will start. All services are transferred to the supplier‟s location and most of the existing services are renewed and fitted into the supplier‟s organization. The customer is implementing a governance structure and is implementing the required interfaces to follow the standardized processes of the supplier. Examples are the incident and change process, which are formalized according to the contract, to ensure a smooth working of the flows at both sides. A well functioning organization will be of value for both customer and vendor. This phase of the outsourcing lifecycle is the most demanding. A lot of implementations are done in a short time span to make the environment leaner, as quickly as possible, in order to have a gain for both parties financially as well as operationally. 2.1.5 The delivery phase This phase has the least impact during the outsourcing lifecycle. Environments are stable and all changes in the environment are done in a controlled matter to ensure that the environment will function on its best at the lowest possible cost. Most of the time this phase will continue between three and five years, depending on the total contract term. 2.1.6 Prolongation or termination phase During this phase the contract will be extended with some changes or enhancements, otherwise the contract will end. The last choice will have significant impact on the relationship between customer and vendor. The most optimal scenario is for both parties to approach the ending negotiations in a professional manner, so it has less of an impact on all fronts and for as low a cost as possible. For the customer, the cycle will restart but with a new vendor or even a re-transition or back sourcing. When the contract is prolonged there will be some change, as the customer will most likely demand an upgrade on its environment as a price to pay for the awarding of the prolongation. 2.2 Known issues from the phases in the conceptual model In this part the known issues of the outsourcing lifecycle, related to the conceptual model, will be exhibited and discussed. 2.2.1 Issues related to cost As many outsourcing projects are started as cost saving initiatives, this will instantly create friction between the supplier and the customer. It becomes a zero-sum game where the price is so low that the supplier cannot make an honest profit and is not able to innovate and create real value for the customer (Weeks & Feeny, 2008). Outsourcing, as many other agreements, should be a partnership where there is a win-win for both of the parties involved. As a result, innovation can take place and the outcome will be better for both companies (Weeks & Feeny). They should seek outsourcing arrangements that can transform their business and increase value (Taylor, 2006). In the field of logistics it is
  • 27. -9- common for parties to work together and give each other insight in their performances and processes. It goes even so far as pointing out that the supplier sees the turnover from their customer, to make it possible to react on the changes caused by production or sale of product. It is called Information Sharing (Lee & Whang, 2000) (van der Veen & Venugopal), which is in the lifeblood of the supply chain (Liker & Choi). Not being aboveboard is a big driver of friction between the supplier and the customer, when there is a cost based transaction. Friction can rise between the supplier and the customer, where they both know they are hiding costs that will benefit the customer or the supplier. The customer can hide things during the due diligence phase and the supplier can try to bill hidden fees that where not correctly incorporated into the contract (Weeks & Feeny, 2008). When the contract is cost based, it is also important to keep track of hidden costs such as time taken by management to transfer the tasks to the outsourcer but also costs that are going to be made if there is a delay in the process or it is more expensive to lay off old employees (Earl, 1996). 2.2.2 Outsourcing seen as a project A project is usually considered with an end goal in mind. Outsourcing can also be seen as a project, in total it is a big project which runs multiple years or a small project when only considering changes which run a couple of weeks. Both types of projects have similar issues; however the impact is much larger on big projects that run for a long time. When a project is seen on its own there are some main key success factors, such as good project management, the setting of clear goals and benefits for the contractor (Dvir, Raz, & Shenhar, 2003) To accomplish a good score on these key success factors it is important that some of the main risks for project failure are mitigated before the project is undertaken. One of the most common reasons for project failure is „ambiguous specifications‟ where there is either a gap between the contracted and the contractor, the supplier misinterprets the specifications or the specifications do not match what the contractor actually expects from the project. For instance, „it must be fast‟ could be understood as if it feels fast it is ok, but the customer could have meant that it should support 1000 requests at once and handle these within five seconds each. Unclear or non-matching specifications will result in a negative score on customer satisfaction where the contracted supplier matched the requirements but not the real required benefits. In other words; the dashboard is green but the customer is not satisfied. Even if a project has a good project plan, the right requirements and a good project manager, there are still other reasons why projects can go wrong. Student Syndrome, Parkinson‟s Law, and Task convergence are aspects that are mainly people related issues that influence customer satisfaction (Blackstone, Cox, & Schleier, 2009).  Student syndrome is starting too late on a task so all tasks get postponed.  Parkinson‟s law relates to time management. It states that when there is plenty of time, a task will take up all time awarded for that task.  Task convergence is when one task depending on another that is delayed. There is a solution for task convergence, if you base the project schedules on the Theory of Constraints (TOC) principle (Goldratt, 2004).
  • 28. -10- 2.2.3 Third party involvement When undertaking a project with a third party contractor the most important factor when handling a project, is to cut out the middleman. It is much more difficult to talk to each other if there is someone standing in the middle (Earl, 1996). Before the project takes place it is advisable to have a middleman to describe the project and create good specifications for the customer, but when the project starts they need to step aside to keep the communication lines as unclouded as possible (Taylor, 2006). 2.2.4 Emotions As stated earlier, outsourcing can be seen as a huge project with many aspects and has a significant impact on the organization and the people involved (John M. Fisher, 2005). So, whatever the reason for outsourcing, emotions will take over where there are people involved, because most of the things they consider normal are going to change (Earl, 1996). Figure 4 Process of transition based on Kübler-Ross theory (John M Fisher) As with all organizational changes, outsourcing will also follow the five stages of death (Boerner, 2008) as described by Kübler-Ross (Kübler-Ross, 1970). An explanation for this can be found in the psychodynamic approach, where people tend to fall back on what they have learnt, their inner working model, when the changes they are exposed to are too much for them to handle (Schaveling, 2008). Most of the time, peoples‟ reactions to any given situation is an unconscious one. It is a survival reaction. The reptilian brain is predominating and we will react conservatively to the changes (John M. Fisher, 2005). The five main stages of the Kübler-Ross model are The Process of Transition Anxiety Can I cope ? Happiness At Last something’s going to change ! Fear What impact will this have? How will it affect me? Threat This is bigger than I thought! Guilt Did I really do that Depression Who am I? Gradual Acceptance I can see myself in the future Moving Forward This can work and be good Hostility I’ll make this work if it kills me!! Denial Change? What Change? Disillusionment I’m off!! … this isn’t for me!
  • 29. -11- denial and isolation, anger, bargaining, depression, and acceptance, which can be transformed to a visual representation of the process as shown in Figure 4. 2.3 The relation between the outsourcing lifecycle and Kübler-Ross Change is emotional and as such it will follow (to a greater or lesser degree, the five stages of grief (Boerner, 2008)). As outsourcing can be seen as a change process, it means that the people involved will follow the Kübler-Ross model in this process. The other factor is customer satisfaction during the outsourcing lifecycle. Satisfaction is an emotion influenced by the change caused by the outsourcing lifecycle. As such, the Kübler- Ross model can be transformed to a model to show how satisfied a customer is during the outsourcing lifecycle. This transformation is shown in Figure 5. Figure 5 IT outsourcing Satisfaction Transition model The influence of the different „handshakes‟ on satisfaction over time can be projected in a graph. The y-axis projects the level of satisfaction, and the x-axis projects time. The progression in the graph will follow the line in Figure 5. + - 0 Satisfaction Anxiety Happiness Fear Threat Guilt Depression Gradual Acceptance Moving Forward t
  • 30. -12- 2.4 Hypotheses Based on the expectations four hypotheses have been formulated. Hypothesis 1: In case of a satisfactory „handshake‟ between sales and transfer, there is a positive correlation with customer satisfaction. Hypothesis 2: In case of a satisfactory „handshake‟ between transfer and transformation, there is a positive correlation with customer satisfaction Hypothesis 3: In case of a satisfactory „handshake‟ between transformation and the delivery organization, there is a positive correlation with customer satisfaction Hypothesis 4: In case of an unsatisfying „handshake‟ between sales and transition, there is a positive correlation with an unsatisfying „handshake‟ between transition and the delivery organization. These hypotheses are depicted in Figure 6 Figure 6 Hypotheses
  • 31. -13- 3 How the study was conducted This chapter discusses the methodology used, explaining why we opted for the methods used, providing an outline on who was interviewed for our research, outline of the methods we used to conduct the research. 3.1 Research Subjects Qualitative research with in-depth expert interviews was conducted followed by a quantitative research approach, to relate the answers from the experts within the organization. This resulted in a broader view on the subject of customer satisfaction in relation to the different „handshakes‟. The study started with expert interviews to get a better understanding of the outsourcing process inside the company. This part of the study was also initiated to gain knowledge on how the process followed differed from theory about the outsourcing process. Capgemini Infrastructure Outsourcing Services (IOS) is responsible for the Outsourcing lifecycle from the sales phase through to the delivery „soll‟ phase. When choosing the subjects for the in- depth interviews, the position of the subjects in the organization and their engagement in the outsourcing lifecycle were taken into account. IOS is responsible for the outsourcing life cycle for different customers, and they work in the different phases in the outsourcing lifecycle investigated, within the different teams. After this initial step, questionnaires were sent out to the people working in the various departments within IOS, with questions included concerning the „handshakes‟ during the beginning of the outsourcing lifecycle. At first, in depth interviews were conducted, to gain knowledge about the process in the company, and to be able to ask the right questions to employees in the final part of the research. The final part of the research also related to getting knowledge with regard to the question of how the view of senior management differs from the view of the staff of the different departments within Capgemini. 3.2 Data collection This section describes how the data is collected from the different respondents in the research phases. 3.2.1 Phase one, qualitative data By interviewing people of different levels, qualitative data was collected. The groups of respondents are based in Utrecht, in The Netherlands. Expert interviews were conducted with respondents working in infrastructure outsourcing for at least 10 years, assuming that as a result, they have more experience and in-depth knowledge within the field. The first part of the study was mainly focused on the process itself and how people perceived the process applied within IOS. Hereafter, a second study was done to see if the „handshakes‟ between the process steps are of any influence on the process, and how they can be improved to create better customer satisfaction. The time used for face-to-face interviews was between forty-five minutes and an hour.
  • 32. -14- The structure of the interview was as follows; a short introduction about the subject, after which the questions from the checklist were posed (the questions can be found in the checklist as presented in Appendix 2 – „checklist open interviews‟). The first question of the checklist is to determine who is responsible for the Transfer-Transformation-Delivery process. Another research area looked at what the main issues in the process were, in relation to customer satisfaction, so the focus is on the issues as the experts see them. Questions with regard to the issues in the process, concerning the customer supplier relationship were asked, because the issues for customer satisfaction can differ from those in the customer supplier relationship. After these questions, some additional questions were asked in relation to the „handshakes‟ between the different teams working in the lifecycle. With regard to these, it is interesting to establish if there is a generic time frame when these „handshakes‟ are occurring during the process, and how much influence the different handshakes have on the lifecycle. The final part of the expert interview focuses on possible improvements of the entire lifecycle with reference to customer satisfaction but also the customer supplier relationship. 3.2.2 Phase two, quantitative data For the web-based questionnaires we used the facilities available at BusinessMonitor, including real-time reporting and the possibility to check day-to-day response statistics. The BusinessMonitor tool made it possible to send out surveys to the respondents as well as remind those that did not respond. To ensure the privacy of the respondents, the survey is send out by a third party and not via Capgemini or one of their subsidiaries. The dataset was delivered without respondents‟ names. The questionnaires are sent by e-mail in a Capgemini layout to emphasize that the research is done under the authority of Capgemini, and thereby decrease the likeliness of it being ignored. The e-mail was sent to all employees working in the departments involved in the outsourcing life cycle. The survey that was sent to employees can be found in Appendix 4 – „e-mail questionnaire‟, the text used in the e-mail to the employees can be found in Appendix 5 – ‟e-mail questionnaire invitation‟, the text used for the reminder e-mail can be found in Appendix 6 – ‟e-mail questionnaire reminder‟. Experience in the research field at Salesforce Up To Data B.V., the provider of the BusinessMonitor tool, shows that the highest yield of responses can be reached within three days after when the initial invitation was sent. Secondly, Salesforce knows from prior experience that questionnaires sent on Tuesday have the highest yield in a business environment. We decided to send out the reminder e-mail one week after the initial request for participation. To make sure the employees would not be irritated with the questionnaire we decided not to send a pre-announcement but just an invitation to the questionnaire. In the invitation they also had the option to decline participating in the research. We contacted the entire population of employees working in the departments dealing with the outsourcings life cycle (393 employees) to get the best chance of reliable answers. After twelve days, one hundred and fifty-one (151) people responded to our questionnaire. Out of this figure, one hundred and thirty three (133) were complete and usable for
  • 33. -15- analysis. The questionnaire used in this study was developed based on our research with senior management and experts working in the field. We invited respondents for the email survey on the 5th & 12th of December 2011. This resulted in a total response of 38,4%; of which 88,1% was usable for analysis. We changed the e-mail text used for the reminder compared with the initial invitation to make it clearer that the research was also conducted with someone working at Capgemini (Willem Kuilman). 3.3 Reliability and validity This section describes the reliability and validity of the research conducted. 3.3.1 Qualitative phase The first phase of our research focused on getting insights into the process of how the company functioned and understanding if practice matched theory. For our initial research ten employees were contacted. Eight of them responded to our inquiry and participated in a face-to-face interview. The invitation letter consisted of a basic outline of our research but not the actual questions to be asked. The invitation letter can be found in appendix 1 – „open interview invitation‟, the checklist that was used during the interviews can be found in appendix 2 – „checklist open interview‟. To make sure no language barrier was raised during our research the whole interview was conducted in the native language of the interviewee, (Dutch), in the expectation that this would lead to more robust answers since the language is fully understood by the respondents and researchers. The open-ended questions are used to get as much information as possible. Open-ended questions allow for the interviewee to answer from their own frame of reference rather than being confined by the structure of pre-arranged questions. For the Face-to-Face interviews, our initial sample consisted of eight people of which three with „expert‟ experience in the field. All eight persons were interviewed with regard to the outsourcing process. This sample equals most of the upper layers in the IOS organization. 3.4 Quantitative phase For the second phase of our research, an e-mail questionnaire is used to get a better understanding of how the people working in the different departments feel about the „handshakes‟ in the lifecycle. All data is collected within IOS in the Netherlands. We kept our survey as small as possible, twelve questions maximum, to determine if the respondent sees the different „handshakes‟ within the organization. If they did not see any „handshake‟, three questions were presented to the respondent. To make sure no language barrier was raised during our research the whole questionnaire was conducted in the native language of the respondent, (Dutch), in the expectation that this would lead to more robust answers since the language is fully understood by the respondents and researchers. For our research we contacted all groups that are connected with one of the handshakes
  • 34. -16- Figure 7 Refined conceptual model In Figure 7 the „handshakes‟ depicted between sales and transfer has been abbreviated as HST (Handshake Sales-Transfer); the „handshake‟ transfer to transformation has an abbreviation of HTT (Handshake Transfer-Transformation) and a „handshake‟ between transformation and delivery has abbreviation HTD (Handshake Transformation-Delivery „soll‟). In Table 1 the relationship between the „handshakes‟ and the groups are shown. Departments HST HTD HST, HTT HTT, HTD HST, HTT, HTD R20 Infrastructure Outsourcing client team X R21 Infrastructure Outsourcing Data Center Services X R22 Network & Security Services X R23 Infrastructure Outsourcing Transition, project & delivery Excellence X R24 Infrastructure Outsourcing portfolio management X R25 Service desk, Workplace & Service management X R40 Transition Management X R70 Sales – Business Development X R90 Infrastructure Outsourcing Management X R92 Human Resource Transitie X Table 1 The various departments and their involvement with the different „handshakes‟ A more detailed outline of the groups questioned can be found in Appendix 7 – „response distribution questionnaire‟. Customer Satisfaction Handshake between Transformation en Delivery ‘soll’ (HTD) Handshake between Sales and Transfer (HST) Handshake between Transfer en Transformation (HST)
  • 35. -17- 4 Results of data collection and analysis In this chapter analysis will be presented of the qualitative and quantitative researches in the order that they were conducted. 4.1 The results of the qualitative research Most of the people in our expert interviews shared the same level of knowledge, experience and vision of the outsourcings process. During the research the process of „classical‟ outsourcing was clearly outlined and determined how the experts perceive it. 4.1.1 Question 1 Our first question was „Who is responsible for the process Transfer-Transformation-Delivery?‟ Our research shows that the interviewed experts all state that this process lies with the delivery subsidiary. The owner of this process is the Service Delivery Director (SDD). All managers from the sub-processes report directly or indirectly to the SDD, resulting in the ultimate responsibility for the outsourcing process with the SDD. 4.1.2 Question 2 After we determined who was responsible for the Sales Transfer-Transformation-Delivery process, we wanted to know if there are improvements possible with regard to the responsibility. „Who should be responsible for the process Transfer-Transformation-Delivery?‟ Most interviewees agreed that the responsibility should not change. However, it was felt the process itself could be optimized by keeping the same persons from the different process steps engaged from the start of the transfer phase, until its end of the transformation phase where the „handshake‟ to delivery „soll‟ takes place. 4.1.3 Question 3 This open question gives an insight on the major issues of the satisfaction during the outsourcing process. „What are the major issues in the process Transfer-Transformation-Delivery with regard to client satisfaction?‟ The answers are analyzed through categorization the answers. The sentences in the answer are judged and categorized. These categories are then categorized again. This iterative process is repeated until there are approximately eight main categories remaining. The top four categories are then used to give a relevant answer to the question The top four issues mentioned by the interviewee are; quality of the people involved, relation and communication, opportunistic behavior and governance.
  • 36. -18- Quality of the people involved Sales should keep deliveries demands in mind and not over promise to the customer. There should be a good fit between both sides. If there is no match between the people on both sides, changes will be necessary. Relation and communication People are working on the project but also need to maintain relations. The same persons should not be involved in both. If the task is not done right for the customer, they should discuss this with the relationship manager and not the technical departments. When a customer has a problem with the project there should be the possibility to contact someone at the other side with equal responsibility, (for example, linking the CxO levels on both sides together) so they can tackle the issue at the same level. Opportunistic behavior Sales people tend to sell anything to close a deal, without necessarily keeping in mind, the parts of the organization that actually have to deliver the goods/services. One of the reasons for this issue is the payment of a 'sales bonus' after the closure of a deal. Governance It is important to get the governance in place correctly. When a deal has been closed, key people are sometimes moved around within a company. To make sure the right services are delivered, it is important to align the right people on both sides. In Appendix 8 – ‟sub categories of the categories mentioned in question three‟ the sub items related to these groups can be found. 4.1.4 Question 4 Question 4 is aimed at getting knowledge with regard to the possible issues in the process influencing the relationship between the customer and the supplier. „What are the major issues in the process Transfer-Transformation-Delivery with regard to the client supplier relationship?‟ The main issues that resulted from our expert interviews are Governance, Quality of the people involved, and the fit with the customer. Governance With regard to governance, one of the main issues is that the people that are doing the project are also involved with relationship management. Relationship management could be put with account management, so issues with the project can be discussed without frustrating the actual people involved. The CxO levels should be linked to solve issues on both sides faster and easier. Quality of the people Quality of the people involved is not really about the quality of the people but more about having the right person for the right task. Sales people will do everything to meet their targets, including selling more than can be expected from the supplier. It is a prisoner‟s dilemma, due to the nature of the job. It can be mitigated as long as it is possible to manage the expectations of the customer. Most important is that the sales department does
  • 37. -19- not promise something they have no knowledge of. Communication should be transparent, open and pro-active. Technical people are less communicative; this is a known fact and should be dealt with by guidance and education and by putting a good governance in place. When the specifications of a deal are determined, the people that are going to deliver the solution also need to be involved, so a solution can be created that matches the expectations of the customer as well as the expectations of the supplier. Some experts also point out that there are not enough qualified people available for some of the projects. Different types of FIT (Strategic, Business and Cultural) The FIT between the customer and the supplier plays a big role in issues between the two parties. With regard to „FIT‟ there are some issues that can be determined. Departments that are going to deliver the solution have no knowledge or not enough knowledge, on how the customers‟ business operates and need to be educated on the processes that are in place at the customer. Contract knowledge is crucial to be sure that the delivered goods/services match what was agreed on with the customer and not to be played by the customer. With regard to the alignment of the companies, the supplier must help customers who are not experienced enough in the process. The fit between the company, culture and the business of the customer play a big part of the issues on the relationship. In Appendix 9 – „sub categories of the categories mentioned in question four‟ the sub items related to these groups can be found.
  • 38. -20- 4.1.5 Question 5 Figure 9 is the result of question 5 where the different „handshakes‟ are positioned on the satisfaction curve. „Where on the graph will you place the different handshakes between the process steps?‟ Figure 8 shows where the interviewees plot the three „handshakes‟ in relation to the customer satisfaction where the numbers in the graph are the different „handshakes‟. Value Label 1 Handshake between Sales and Transfer (HST) 2 Handshake between Transfer and Transformation (HTT) 3 Handshake between Transformation and Delivery „soll‟ (HTD) Table 2 Legend of Figure 8 The letters „A‟ to „H‟ respond to the different interviewees. Two of the interviewees were not taken into consideration due to the fact that they were not able to pinpoint the stage in relation with the satisfaction. Figure 8 Different „handshakes‟ in relation to customer satisfaction over time as seen by the interviewees 4.1.6 Question 6 Question 6 handles the timeline of the three „handshakes‟. „When do the different phases „handshakes‟ take place (in x months)?‟ The conclusion of the answers is that there is no general understanding of the timeline within an outsourcing project. Every interviewee has his or her own view on what the average time line should be. It ranges from less than a year to three years, before the situation is normalized. Normalized relates to the satisfaction level of the customer being above null. There has been some dispute about this matter, because many interviewees do not see the transfer between sales and transfer and between transfer and transformation separately. For them, it is virtually impossible to separate the two when answering the question without the risk that the discussion will guide them toward an answer. The conclusion is that the question is not suitable for use. The answers of this question will not be further used in this research. + - 0 Satisfaction A 1 A 2 A 3 B 3B 2 B 1 C 1 C 2 C 3 E 1 E 2 E 3 F 1 F 2 F 3 H 1 H 2 H 3 t
  • 39. -21- 4.1.7 Question 7 The last question: „How can the relationship between the customer and the supplier be improved, and how can the client satisfaction be improved, taking the different phases (Transfer-Transformation-Delivery) into consideration?‟ resulted in a series of keywords regarding improvements of the relationship and customer satisfaction. These keywords are a result of a 3 time iterative process of grouping words from the different interviews Opportunistic behavior of sales The Sales department tends to sell more than they are able to deliver. New cutting edge technologies are sold to get a deal; cutting edge gives issues in the delivery phase where they need to implement services/products they are not experienced with yet. Communication Projects always have issues that make them longer than expected or uncertain issues that delay the project. To make sure the satisfaction of the customer is not decreasing very much due to delays, it is important to keep them aware of issues that occur during the process. Governance customer Within the customer organization there must be good governance in place. If people have issues with the outsourced parts of the business, they should discuss these first within the customers' organization to make sure those involved in the actual project, are not influenced by the wrong people. Quality of personnel The right people for the right job; if a technical person needs to undertake relationship management, it is likely that things will go wrong. Egos and emotion When something goes wrong in the process people need to admit that it went wrong and work on a solution together. During different steps, all kinds of things can go wrong that can be solved better with others involved. Maturity customer Customers that are doing outsourcing for the first time are not experienced and as such giving delays during the phases. To mitigate customers that are outsourcing for the first time, the customer should be helped with getting good governance, and more time should be allocated for the different phases. In Appendix 10 – „sub categories of the categories mentioned in question seven‟ the sub items related to these groups can be found. A short summary of each face-to-face interview can be found in Appendix 3 – „summaries open interviews‟.
  • 40. -22- 4.2 The results of the quantitative research The 2nd phase of the research is aimed at getting knowledge with regard to how the „handshakes‟ are perceived within the different departments working in the outsourcing lifecycle. The Likert scale questions are analyzed with a one sample T-Test using Statistical Package for the Social Sciences (SPSS). For the analysis with regard to the open question a list of terms that describe the points pointed out by the respondent is created. This list is grouped by term and ranked on the number of times a term has been used. The tables used for the analysis are presented in Appendix 11 – „total results of the questionnaire‟. 4.2.1 Handshake between Sales and Transfer (HST) The questions regarding the HST are aimed at getting knowledge about the „handshake‟, is there a „handshake‟, does this „handshake‟ influence customer satisfaction, and if it influences customer satisfaction does it decrease or increase it? Of the respondents that see the HST, 76.8% of them see a „handshake‟ that can be improved. 74.7% believes the HST has influence on the customer satisfaction. Currently the effect on the customer satisfaction score according to the respondents is a negative effect since the customer satisfaction decreases during the HST. Total N (%) Experienced HST N (%) Yes, Good 22 (15.1%) 22 (23.2%) Yes, Bad 73 (50.0%) 73 (76.8%) No 51 (34.9%) 0 (0%) Total 146 95 Table 3 Those who experience of the „handshake‟ between Sales and Transfer No influence Low influence Influence High influence Very high influence N (%) 1 (1.1%) 5 (5.5%) 17 (18.7%) 50 (54.9%) 18 (19.8%) N (%) 6 (6.6%) 17 (18.7%) 68 (74.7) Table 4 Influence on customer satisfaction of the „handshake‟ between Sales and Transfer High decrease Decrease Neutral Increase High increase N (%) 3 (3.3%) 49 (53.3%) 34 (37.0%) 4 (4.3%) 2 (2.2%) N (%) 52 (56.6%) 34 (37.0%) 6 (6.5%) Table 5 Effect on customer satisfaction of the „handshake‟ between Sales and Transfer With regard to the question how the HST can be improved the respondents gave a couple of main areas where they believe the process can be improved, these are: alignment of expectations, standardization, and involving the delivery department in the sales phase.
  • 41. -23- Alignment of expectations A customer might expect something different than what is believed by the people that are delivering the service. To keep in line that what is going to be delivered with the expectation of the customer the expectations must be aligned. This keeps the gap between actual and expected small. Standardization During the sales process more standardized processes should be sold to the customer this includes standard services instead of product. Involving delivery in the sales phase To be sure that the sales contract only contains viable services the delivery department should be consulted early in the process. Everything can be delivered but the price and the time available should be in line with the services the delivery department can deliver. 4.2.2 Handshake between Transfer and Transformation (HTT) The questions regarding the HTT are aimed at getting knowledge about the „handshake‟, is there a „handshake‟, does this influence customer satisfaction, and if so, does it increase or decrease customer satisfaction? Of the respondents that see a HTT, 77.7% of them see a „handshake‟ that can be improved. 80.4% believes the HTT has influence on the customer satisfaction. Currently the effect on the customer satisfaction score according to the respondents is a negative effect since the customer satisfaction decreases during the HTT. Total N (%) Experienced HTT N (%) Yes, Good 20 (14.8%) 20 (32.3%) Yes, Bad 70 (51.9%) 70 (77.7%) No 45 (33.3%) Total 135 90 Table 6 Those who experience of the „handshake‟ between Transfer and Transformation No influence Low influence Influence High influence Very high influence N (%) 1 (1.1%) 4 (4.6%) 12 (13.8%) 49 (56.3%) 21 (24.1%) N (%) 5 (5.7%) 12 (13.8%) 70 (80.4) Table 7 Influence on customer satisfaction of the „handshake‟ between Transfer and Transformation High decrease Decrease Neutral Increase High increase N (%) 4 (4.7%) 42 (48.8%) 31 (36.0%) 9 (10.5%) N (%) 46 (53.5) 31 (36.0%) 9 (10.5%) Table 8 Effect on customer satisfaction of the „handshake‟ between Transfer and Transformation
  • 42. -24- With regard to the question how the HTT can be improved, respondents indicated a couple of main areas where they believe the process can be improved, these are: alignment of expectations, involve delivery in the transformation phase, standardization, governance and communication customer internally. Alignment of expectations A customer might expect something different than what is believed by those that are delivering the service. To keep in line, whatever is going to be delivered with the expectation of the customer, the expectations must be aligned. This keeps the gap between actual and expected, down to a minimum. Involve delivery in the transformation phase To make sure that the new processes for the customer are properly aligned within the delivering company. The delivery department should be involved in the transformation phase so they know early on what they have to deliver and can come up with better solutions and processes before it is all in place. Standardization The focus during the phase should be more on standardization, where can the standard services be delivered instead of creating a new tailored solution for the customer. Governance Responsibility should be clear to all, so everyone involved is aware of their respective duties. This applies to the customer as well as the supplier. Communication customer internally During the phase where the company‟s processes are transformed into more Capgemini compatible ones, communication inside the customer should keep the end users aware, so they know what is happening.
  • 43. -25- 4.2.3 Handshake between Transformation and Delivery „soll‟ (HTD) The questions regarding the HTD are designed at getting knowledge about the „handshake‟, determining if there is a „handshake‟, does it influence customer satisfaction, and if so, does it decrease or increase it? Of the respondents that see a HTD, 68.7% of them see a „handshake‟ that can be improved. 81.1% believe the HTD influences customer satisfaction. Currently, the effect on the customer satisfaction score (according to the respondents) is negative, since the customer satisfaction decreases during the HTD. Total N (%) Experienced HTD N (%) Yes, Good 31 (23.7%) 31 (31.3%) Yes, Bad 68 (51.9%) 68 (68.7%) No 32 (24.4%) Total 131 99 Table 9 Those who experience of the „handshake‟ between Transformation and Delivery „soll‟ No influence Low Influence influence High influence Very high influence N (%) 0 5 (5.3%) 13 (13.7%) 43 (45.3%) 35 (35.8%) N (%) 5 (5.3%) 13 (13.7%) 78 (81.1%) Table 10 Influence on customer satisfaction of the „handshake‟ between Transformation and Delivery „soll‟ High decrease Decrease Neutral Increase High increase N (%) 12 (12.6%) 40 (42.1%) 28 (29.5%) 14 (14.7%) 1 (1.1%) N (%) 52 (54.7%) 28 (29.5%) 15 (15.8%) Table 11 Effect on customer satisfaction of the „handshake‟ between Transformation and Delivery „soll‟ With regard to the issue of how the HTD can be improved, respondents suggested a few options; standardization, acceptation criteria and the involvement of delivery in transformation. Standardization The focus during the phase should be more on standardization, determining where the standard services can be delivered, instead of creating a new tailored solution for the customer. Acceptation criteria Before delivery accepts the „handshake‟ from the Transformation phase, delivery should have had made clear what it expects from the Transformation department, so all required documents are in place and the delivery department can start working without knowledge gaps. Involve delivery in the transformation phase
  • 44. -26- To make sure that the new processes for the customer are properly aligned with Infrastructure Outsourcing Services (IOS), the delivery departments should constantly be involved in the transformation phase so they know what they have to deliver, and can come up with better or improved solutions and processes before it is all in place. 4.2.4 Decrease or Increase in customer satisfaction To determine which of the „handshakes‟ has the biggest decrease of the customer satisfaction we recorded the answers on the question, with ratings from 0 (as the highest decrease), 2 (decrease),3 (neutral),4 (increase), 6 (highest increase). We used 0 and 6 for the biggest outliners to make sure that the differences between „highest decrease‟ and „highest increase‟ are clearly visible, similarly for „highest influence‟ and „high influence‟. Used data can be found in Appendix 12 – „Influence of the „handshakes‟ on Customer Satisfaction‟. Comparing the mean between the different „handshakes‟, the HTD gives the highest decrease in customer satisfaction. This is based on the mean and the spread of the values around the mean. HTD gives a mean of 2.379, which is the lowest when compared to HST‟s 2.478 and HTT‟s 2.477. The score for this question ranges between 0 and 6, where 0 is the highest decrease and 6 the highest increase. Handshake Mean Handshake between Sales to Transfer (HST) 2.478 Handshake between Transfer to Transformation (HTT) 2.477 Handshake between Transformation to Delivery „soll‟ (HTD) 2.379 Table 12 Effect on customer satisfaction per handshake 6 = High Increase, 0 = High decrease 4.2.5 Influence on the customer satisfaction To determine which of the „handshakes‟ has the biggest influence on the customer satisfaction we recoded the answers on the question to 0 (no influence),2 or 3 (normal influence),-4 or 6 (highest influence). We used 0 and 6 for the biggest outliers to make sure the differences between „lowest influence‟ and „low influence‟ are clearly visible, similar for „highest influence‟ and „high influence‟. The data used can be found in Appendix 13 – „Effect on customer satisfaction of the „handshakes‟ Taking the differences in means into account between the „handshakes‟, it seems that the HTD has the highest influence on the customer satisfaction. This is based on the mean and the spread of the values around the mean. HTD gives a mean of 4.474, which is the highest compared to HST‟s 4.055 and HTT‟s 4.207. Based on a score of 1 to 5, where 0 is the lowest influence on the customer satisfaction score, and 6 is highest influence on the customer satisfaction score. Handshake Mean Handshake between Sales to Transfer (HST) 4.055 Handshake between Transfer to Transformation (HTT) 4.207 Handshake between Transformation to Delivery „soll‟ (HTD) 4.474 Table 13 Influence of the handshake on the customer satisfaction 0 = No influence, 6 = Very high influence
  • 45. -27- 4.2.6 Differences between groups on the perception of the handshake by groups The research does show a difference between the „grade‟ of the people working and the perception of the „handshakes‟, a small difference can be seen in group B compared to the other groups this could be explained that the people in group B are not as experienced as the people in the other groups. Due to the fact that the grade says something about the maturity of the employee, it can be stated that employees who have been working for Capgemini for a longer period of time perceive the „handshakes‟ similarly (data can be found in Appendix 16 – „Grade compared to the „handshakes‟). Figure 9 Perception of the „handshakes‟ by grade Comparing if people came from a deal, to the perception of the „handshakes‟, did not result in a difference between scoring a „good‟ or „bad‟ „handshake‟ (data can be found in Appendix 17 – „Deal compared with „handshakes‟‟) 4.2.7 „Handshakes‟ viewed from the different groups For this part of the research the respondents are put into groups, according to where they work.. Someone working in the sales phase is put into the Sales group; likewise someone that works in the Transfer (T) phase is put into the transfer group; someone who works in Transformation is put into the Transformation group and finally, someone who works in the Delivery phase is put into the delivery group. These groups are compared to each other on the basis of „handshakes‟. It is worth noting that a part of the respondents do not see a „handshake‟ in the process. 0% 10% 20% 30% 40% 50% 60% 70% HST: Yes, a good handshake HST: Yes, a bad handshake HST: No HTT: Yes, a good handshake HTT: Yes, a bad handshake HTT: No HTD: Yes, a good handshake HTD: Yes, a bad handshake HTD: No B C D E
  • 46. -28- Handshake between sales and transfer viewed from the groups involved Although there is not much data available from the different groups, a visible difference can be observed between the Sales group and the others. The Sales group itself states that there is a good „handshake‟ between the Sales phase and Transfer phase, the other departments state that this is different. This group also shows a big difference between the groups active in the Sale phase and the other groups. Figure 10 Perception of the handshake between Sales and Transfer by departments involved in Sales phase Handshake between Transfer and Transformation viewed from the groups involved. The respondents involved in the Transfer phase do note that the „handshake‟ can be improved upon. Also, the results are more in line with the other phases. But due to the fact that the number of respondents on this specific „handshake‟ is low, further research should be conducted Figure 11 Perception of the handshake between Transfer and Transformation by departments involved in Transfer phase ,0 10,0 20,0 30,0 40,0 50,0 60,0 Yes, a good handshake Yes, however a bad handshake No Departments involved in the Sales phase about HST Other departments about HST ,0 10,0 20,0 30,0 40,0 50,0 60,0 Yes, a good handshake Yes, however a bad handshake No Departments involved in Transfer phase about HTT Other departments about HTT
  • 47. -29- Handshake between transformation and delivery viewed from the different groups involved There is a small difference between the Transformation and the Delivery phase with regard to the „handshake‟ itself, although the difference is varied from the other „handshakes‟; the People involved in the Transformation phase believe that the „handshake‟ is worse than the respondents working in the Delivery „soll‟ phase (data can be found in Appendix 18 – „Handshakes‟ compared to departments‟) Figure 12 Perception of the handshake between Transformation and Delivery „soll‟ by departments involved in Transformation phase 4.2.8 Discussion of the Hypotheses This part discusses the hypotheses as they were formulated earlier. 1. Hypothesis 1: In case of a satisfactory „handshake‟ between sales and transfer there is a positive correlation with customer satisfaction 2. Hypothesis 2: In case of a satisfactory „handshake‟ between transfer and transformation there is a positive correlation with customer satisfaction 3. Hypothesis 3: In case of a satisfactory „handshake‟ between transformation and the delivery organization there is a positive correlation with customer satisfaction Hypothesis 1,2 and 3 are clearly shown in the collected data and as such are not rejected. Every step in the process has an influence on customer satisfaction and given the data, they all have a decrease in the customer satisfaction level. Hypothesis 4: In case of dissatisfaction between sales and transition there is a positive correlation with the dissatisfaction between transformation and the delivery organization. Due to the number of people that see all „handshake‟ it is not possible to accept the hypothesis. Observed is that when the first „handshake‟ is seen as a bad handshake, the other „handshakes‟ are also considered as a bad handshake. The analysis can be found in Appendix 15 – „Analysis of the „handshakes‟ given a bad „handshake‟ between Sales and Transfer‟ ,0 10,0 20,0 30,0 40,0 50,0 60,0 Yes, a good handshake Yes, however a bad handshake No Departments involved in Transformation phase about HTD Other departments about HTD
  • 48. -30- 4.2.9 Relation between the process steps and responsibility Reviewing the analysis, the conclusion is that the responsibility of all the process steps lay with different teams and managers, as depicted in Figure 13 and are overseen by the Service Delivery Director who is ultimately responsible for the complete profit and loss of the outsourcing process. Figure 13 Relationship between the lifecycle' phases and the responsible manager Sales Delivery ‘ist’ Delivery ‘soll’ Transition Sales manager Transition manager (Service) Delivery Manager ‘soll’ Service Delivery Director (Service) Delivery Manager ‘ist’
  • 49. -31- Another observation is that the relation between „handshakes‟ and customer satisfaction differs between the respondents of the qualitative and quantitative research as can been seen in the graph of Figure 14. Figure 14 Different „handshakes‟ in relation to customer satisfaction over time The view of the first „handshake‟ is similar. The customer is still satisfied, but the first cracks are presenting themselves according to the respondents of both researches. The assessment of the second „handshake‟ differs between the two groups. The respondents of the quantitative research seem to experience a more dissatisfied customer between the transfer and transformation than the respondents of the qualitative research. The respondents of the second research also experience that after the transfer to delivery the satisfaction of the customer is still declining which contradicts the experience of the interviewees of the first group. + - 0 Satisfaction t 1 2 3 1 2 3 Response qualitative research Response quantitative research 1 = HST 2 = HTT 3 = HTD
  • 50. -32- The influence of the „handshakes‟ on the satisfaction is corresponding with the Kübler – Ross model. The overlaying graphs are shown in figure 15 is called the Kuilman- vanTilburg IT outsourcing Satisfaction-Transition model. Figure 15 Kuilman-vanTilburg IT Outsourcing Satisfaction-Transition model In Figure 15 the relationship between the „handshakes‟ and the satisfaction level is displayed in relation to the stages within the Kübler-Ross model. The results of both researches fit in this model. + - 0 Satisfaction t 1 2 3 1 2 3 Response qualitative research Response quantitative research 1 = HST 2 = HTT 3 = HTD Anxiety Happiness Fear Threat Guilt Depression Gradual Acceptance Moving Forward
  • 51. -33- 5 Conclusion In this chapter the answer to the problem statement is presented and the research question is answered. The aim of this research was to gain an insight into the dissatisfaction of customers during the start of the outsourcing lifecycle. The following research question was formulated: „The research is aimed at gaining knowledge and insights with respect to the influence of friction of the „handshakes‟, in the process sales>transfer>transformation>delivery „soll‟ on the customer satisfaction, during the start of the outsourcing life cycle, concerning the customer and the people involved in the early stages of the outsourcing life cycle.‟ The research shows that the „handshakes‟ between the different phases in the outsourcing lifecycle have a significant impact on customer satisfaction. Although the impact of the „handshake‟ between sales and transfer (HST), the „handshake‟ between transfer and transformation (HTT), and the „handshake‟ between transformation and delivery „soll‟ (HTD) are not the same, there are similarities in the cause of the dissatisfaction. In general, the keywords found in all three „handshakes‟ are communication, governance, quality of the people (the right people on the specific task), opportunistic behavior of sales and egos of delivery. Furthermore, it became clear that the outsourcing lifecycle has a resemblance to the Kübler-Ross model. Customer satisfaction follows the same pattern as seen in Figure 16. This means that the process can be predicted and as such, reactions can be mitigated or the process can pass in a controlled manner. Figure 16 IT outsourcing Satisfaction-Transition model When controlling satisfaction, the expectation is that the amplitude will be less steep as it will also be less deep. Alpha (α) is the gain in time of when the customer is satisfied again. + - 0 Satisfaction Anxiety Happiness Fear Threat Guilt Depression Gradual Acceptance Moving Forward t
  • 52. -34- The beta (β) is the gain of the effect on the degree of dissatisfaction of the customer. This will result in a customer who will be satisfied earlier during the process what will have impact on the profitability of the contract due to the fact that trust and loyalty of the customer will raise and additional projects could be awarded. Figure 17 The expected result of the improvements of the „handshakes‟ on customer satisfaction Secondly, we found fragmentation in the outsourcing lifecycle, which has a negative influence on the „handshakes‟ between the phases. The interaction between the phases and the subsequent teams is low and gives a type of information asymmetry. Information asymmetry means that the „handshake‟ is not complete. It is hard and may be impossible to transfer also what was „read between the lines‟, as it is not formalized. The effect will be that the expectation does not match what is delivered. The third conclusion focuses on the growing dissatisfaction and fragmentation that results in a vexed or disturbed relationship. Due to the fragmentation of the outsourcing lifecycle a reliable relationship between customer and supplier is hard to realize. The customer is not talking to the same individual concerning the relation. Also, the relationship will be pressurized when the relationship is compromised by the cause of the dissatisfaction. 5.1 Recommendations As a result of our research this chapter outlines some recommendations of how to optimize the outsourcing lifecycle, with the aim of improving customer satisfaction at the start of the lifecycle, through to the delivery „soll‟. Firstly one needs to gain control over the fragmentation. Appointing a supervisory manager can solve this. The role of the supervisory manager is to assure that the „handshakes‟ between the different teams and processes is done according to the
  • 53. -35- expectations of both parties. This will assure that there will be no „information asymmetry‟ as described. The avoidance of the „information asymmetry‟ will improve customer satisfaction, as it will also improve the working atmosphere within Capgemini due to the fact that irritation arising from the „handshakes‟ and the number of dissatisfied customers is decreased. Both will have leverage on the profitability of the contract. People who are satisfied with their jobs tend to make fewer mistakes and are therefore more productive. Customers who are satisfied will grand additional work more easily. Secondly, the supervisory manager should have enough mandates to compel the project teams to finish their assignments according to plan. As transitions tend to overrun on cost (and time), the supervisory manager should have a budget to compensate for the overrun. The transition or program managers, are still accountable for the overruns, it will avoid the fact that the (Service) Delivery Manager is starting with a budget constraint. This budget for the supervisory manager should be 1% or 2% of the whole deal‟s budget. The practicality of the budget should be examined more closely to match reality. The supervisory manager will also be the chairman of the steering committee as the representative of the Service Delivery Director (SDD). Currently the representatives of the SDD are all a part of the outsourcing lifecycle and bias is not unlikely. The supervisory manager reports directly to the SDD, as he/she is responsible for the profit and loss of the whole outsourcing lifecycle. It is important that the customer feels that they are being taken seriously during the whole lifecycle and not only during the sales phase. Attention from executives should provide for a solid relationship, which can be used when performance drops below expectations and satisfaction is declining from both sides of the relationship. Also, there are issues that could be addressed from the supplier, for example the need for a proper governance structure within the customer‟ organization so that the right people communicate to each other on both sides to assure an optimal functioning relationship. Another recommendation would be to check with the customer, if the specifications are still applicable before they are implemented. This is especially more prominent when the specifications are drawn some time before the implementation, as the landscape of the customer is ever changing and what was needed yesterday could be obsolete tomorrow. The result of checking with the customer is that the expectations of the result will be in line with that what is expected and will have an impact on customer satisfaction (Huang, 2008). The expected result of the implementations will be an increased financial result at the end of the outsourcing lifecycle. 5.2 Further research We recommend that in any future research, the focus from the customer will be researched in greater depth; it might be possible that there are issues that influence the processes such as: the level of resistance, obstinacy behavior of different parties involved in the process like third parties and former suppliers from customers. The role of the customer in failed
  • 54. -36- projects should also be examined in more depth, so these issues can be tackled before they possibly occur. It should be determined what the reason is that specifications from the customer do not match the actual expectations of the customer, and how this can be improved. Given the collected data during this research on the outsourcing lifecycle, we estimate that the total cost of the lifecycle could decrease when „handshakes‟ of the outsourcing lifecycle are managed firmly. The expectations will be met earlier in the lifecycle with less dissatisfaction as a result. The initial cost could increase, but the cost for rework further on in the process could be avoided what will result in lower total cost. We expect that the total cost of the lifecycle will decrease so the profitability of the outsourcing lifecycle can increase. This expected result should be determined with one or more pilot studies. It is advised that the customer satisfaction is continuously measured and monitored during the different steps in the beginning of the outsourcing lifecycle. 5.3 Management implications This research can be applied to other companies where the main process can be described; one department sells the service/product to a customer and another department has to deliver the service/product. This results in the shift of the work and the customer (a „handshake‟) between the different departments during a project. This could be either be a project organization where the sales department sells the project and then hands the project and the customer over to the actual departments that have to deliver the product/service to the customer. This would apply to organizations where Sales is split from the research development department or the project department. The proposed solution, where a supervisory manager is responsible for maintaining the „handshakes‟ between the different departments and the normal managers will be in charge of the actual process but will not be involved with managing the „handshakes‟ between the different departments, should work for these companies
  • 56. -38-
  • 57. -39- Appendix 1 - Open interview invitation The English version followed by the original Dutch version. Dear, To complete our study at the Nyenrode Business University we are writing our thesis. Our thesis subject is related to the sourcing lifecycle after the deal has been signed. To give us a better understanding about the sourcing lifecycle within Capgemini we would like to discuss the lifecycle with you. This will help us to determine the questions we are going to ask in a later stadium. We believe a meeting slot of one hour is enough. Below is a small explanation of the phases we want to research and what we want to discuss with you. Figure one shows the thesis area The steps after the deal has been closed and which we are going to research are  Transfer from Sales to Transfer  Transfer from Transfer to Transformation  Transfer from Transformation to Delivery We want to determine if these steps are of influence on the customer satisfaction. Figure 1 Sourcings lifecycle Figure 2 Relation client satisfactions
  • 58. -40- Original Dutch version Beste, In het kader van onze studie aan Business Universiteit Nyenrode zijn we bezig met onze thesis. Ons thesis onderwerp gaat over de sourcings lifecylce op het moment dat de deal gesloten is. Om ons een idee te geven van hoe de sourcings lifecycle wordt gepercipieerd zouden wij graag met u van gedachte willen wisselen om zo in een later stadium gerichte vragen te kunnen formuleren voor ons onderzoek. Wij schatten in dat een gesprek van één uur voldoende is. Onderstaand een korte uitleg van de fasen waar we onderzoek naar willen doen en waar we met u over van gedachten willen wisselen. In figuur 1 laten we zien wat ons thesis gebied is. De stappen die na de deal volgen en welke wij willen onderzoeken zijn  Overdracht van vanuit sales naar transformatie  Overdracht van transformatie naar delivery  Delivery Wij willen kijken of en hoe deze stappen van invloed zijn op de tevredenheid van de klant. Figure 1 Sourcings lifecycle Figure 2 Relation client satisfactions
  • 59. -41- Appendix 2 - Checklist open interview Question 1 Who is responsible for the process Transfer-Transformation-Delivery Question 2 Who should be responsible for the process Transfer-Transformation-Delivery Question 3 What are the major issues in the process Transfer-Transformation-Delivery with regard to client satisfaction Question 4 What are the major issues in the process Transfer-Transformation-Delivery with regard to the client supplier relationship Question 5 Where in time are the „handshakes‟ between the process steps in the following figure? Question 6 When do the different Phase „handshakes‟ take place (in x months) Question 7 How can the relationship between the customer and the supplier be improved, and how can the client satisfaction be improved, taking the different Phases (Transfer- Transformation-Delivery) into consideration.
  • 60. -42- Appendix 3 - Summaries open interviews Interviewee A Question 1 - Who is responsible for the process Transfer-Transformation-Delivery Eerst sales welke daarna het geheel aan delivery overdraagt. (Tot de eerste hand shake is sales verantwoordelijk.) Wanner de deal helemaal rond is 100% naar delivery (IOS/DELIVERY na ondertekening) BCS (bid control sheet akkoord > dan gaat de verantwoordelijkheid naar delivery) Zodra alles naar delivery overgedragen is gaat sales verder naar de volgende klus. Question 2 - Who should be responsible for the process Transfer-Transformation- Delivery Delivery, solution architect doortrekken voor de continuïteit +commitment, niet te snel ontvlechten en aanspreekbaar blijven „als‟. Transfer = minimaal knowledge transfer Question 3 - What are the major issues in the process Transfer-Transformation- Delivery with regard to client satisfaction Mismatch qua verwachting tijdens de sales fase. Doorlooptijd „kort‟ is de tijd wel realistisch kan de klant dat wel in dat tempo?. Snelheid van leverancier niet in lijn met snelheid klant. Scherpe doorlooptijd + scherpe prijs door de salesafdeling + klant eis. Build run vs run build run (leercurve effectiever), run build run werkt beter, door een beter beeld van de as-is situatie Klant met 1ste keer uitbesteden is beter om daar run build run te doen Kwaliteit van de regie door de klant is essentieel (cmmi level?) 1ste generatie verwacht meer dan wat ze afnemen Kwaliteit van de transitiemanager, replacement van de man. Question 4 - What are the major issues in the process Transfer-Transformation- Delivery with regard to the client supplier relationship Rimpels masseren, maar lek repareren niet. Multi level governance model, meerdere niveau‟s contacten + voorgang goed communiceren. Schakelen op de juiste niveau‟s. Pro actief + Openheid van zaken Kwaliteit van de engagement mensen (key posities) Transitie Manager + de managers in de governance. Toegevoegde waarde door rol in de governance. „echt snappen van elkaar‟ Question 5 + 6 (is a drawing) - Where in time are the „handshakes‟ between the process steps in the following figure? When do the different „handshakes‟ take place (in x months)
  • 61. -43- Bij transformatie onder 0 Dieptepunt: TO-BE, niet wat ze wilden (delivery) Alles nieuw + blijven werken Elementen bij de klant, volwassenheid van de klant. Question 7 - How can the relationship between the customer and the supplier be improved, and how can the client satisfaction be improved, taking the different phases (Transfer-Transformation-Delivery) into consideration. Realistische planning + kosten door sales Juiste governance + Transitiemanager + bewezen oplossing! Klant kiest goedkoopste aanbieding, klant veroorzaakt zelf de spanning door de kosten die gehaald moeten worden. Goedkoper door „bleeding edge‟ oplossing, maar is die wel betrouwbaar?? Delivery manager eerder vanaf de sluiting van het contract erbij betrekken Ofwel eerder de senior delivery manager en de DM to-be aansluiten in het traject.