Managing Service contract and service quality : a case from telecommunication industry.

Abstract

Outsourcing plays a major role in Sri Lankan telecommunication industry by targeting cost reduction and task specialization to get the competitive advantage over rivalries. Managed Services is one of the most important type of outsourcing which can be predominantly seen in telecommunication industry in the Sri Lankan context. Operation and maintenance cost of the network elements takes a huge portion of the total OPEX and there is a trend of outsourcing them to vendor companies for the benefit of the operator. On the other hand the quality of service is utmost important while looking for cost reduction as it is the attractive part of customer engagement within the business environment. But there is trade-off between cost reduction and service quality of the operation. It seems to appear some issues associated with the overall service quality of a Managed Service Contract although the cost of operations is reduced to a certain level. Therefore, it is vital to identify the critical factors which affect the service quality of Managed Service Contract in the Sri Lankan context. The authors have chosen the quantitative deductive approach and the data was gathered from 83 top and middle level managers in the telecommunication sector who are 6 directly engaged with Managed Service Contracts through a questionnaire survey. Both SPSS and Smart PLS software packages were used to carry out the exploratory and confirmatory factors analysis for the initial data refinement and evaluating the overall model respectively. Quantitative data collected via questionnaires were analysed by using inferential techniques such as descriptive statistics and linear regression. The customer relationship and technology transfer of Managed Service Provider have been found as key factors on service quality of Managed Service Contract. Further, it was found that the relationship with the customer was the most critical factor and that there was no reward of technology transfer mechanisms. Hence, the findings of the research can be used by the stakeholders in telecommunication sector to increase the service quality of the Managed Service Contracts.