Pagoda.

com Case Study

Kathryn Stacy
FSCJ
Fall 2020
Question 1). Calculate the total cost of outsourcing the online help desk versus staying with the
current solution. Which option is cheaper?
Current solution New Delhi
Personnel Costs 40x40,000=1,600,00 -
Supervisors 3x70,00=210,000 -
Variable 800,000x1.50=1,200,00 800,000x.50=400,000
servers 4x2,000=8,000 1,500,000
pc 20x1,000=20,000 -
Total cost 3,038,000 1,540,000

Outsourcing the online help desk would be the cheaper option.

Question 2). What other factors, other than costs, should Pagoda consider? How would you
weigh these factors? Given above, how might you use weighted-point evaluation system to
evaluate the two?
Pagoda should consider the quality their customers would receive from the New Delhi online
help desk. Though the initial offer included that the representative had degrees and a tech
background, is it the same type of knowledge someone might receive in states? Also, India is an
up and coming nation, would they be able to handle and influx of callers and be equipped to
provide the service needed?
Using the performance score formula, you can calculate the weight of each option.
current New Delhi
Quality 4.0x0.3=1.20 4.5x0.3=1.35
Tech abilities 4.0x0.2=0.80 4.1x0.2=0.82
service 3.0x0.3=0.9 4.5x0.3=1.35
total 2.9 3.52

Outsourcing is still the better option of the two.

Question 3). Should Pagoda.com outsource its online help desk? Wy or why not?
Yes, Pagoda should outsource because it is the best and most cost efficient of the two options.
Even with the “what if” variables, outsourcing will still save Pagoda money on each request
made.
Question 4). A statement of work typically specifies performance measurements that the buying
firm can use to determine whether the service provider is meeting the terms of the contract. What
performance measurements would you recommend be put in place? What should happen if the
service provider fails to meet these requirements?
Some requirements I would implement is low waiting times, customer friendliness, promptness
on solving an issue (because this was one of the top reasons customers stayed with Pagoda for
short, reliable wait times), and customer satisfaction. If any of these were to be broken or the
overall quality of the service desk were to lower, I would have to find the source of the problem
and if it were a reasonable fix at an effective cost I would continue to outsource. But if it is an
unfixable issue and the customer would continue to suffer, I would have to cancel the contract.