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Int. J. Services and Standards, Vol. 11, No. 1, 2016 81

Copyright © 2016 Inderscience Enterprises Ltd.

Project risk assessment of an outsourced call centre project for a national health insurance scheme

Samuel Famiyeh*

GIMPA Business School, Ghana Institute of Management and Public Administration, P.O. Box AH 50, Achimota, Accra, Ghana Email: [email protected] *Corresponding author

Daniel Bassaw eServices Africa Limited, IT Department, P.O. Box CT 3524, Cantonments Accra, Ghana Email: [email protected]

Abstract: This work assesses the perception of risk associated with an outsourced call centre project for a National Health Insurance Scheme. The study employed the ISO 31000:2009 risk assessment framework with risk probability and risk consequence parameters to interview experts that participated in a call centre outsourcing project. The study identified the following as major or high-risk factors that may affect a typically outsourced call centre project: integration challenges between contact centre and the existing client’s systems; inadequate project scope definition and scope creep; telecom providers not delivering effective services; poor coordination and communication among key project stakeholders; changes request by the client; estimating errors; and lack of process alignment between the contact centre and the client’s back office. The study is relevant especially for countries interested in outsourcing their national health insurance customer relations to outsourced call centres to enable them to focus on their key services.

Keywords: assessment; centre; contact; health care; insurance; outsourced; outsourcing; risk; services; standards.

Reference to this paper should be made as follows: Famiyeh, S. and Bassaw, D. (2016) ‘Project risk assessment of an outsourced call centre project for a national health insurance scheme’, Int. J. Services and Standards, Vol. 11, No. 1, pp.81–105.

Biographical notes: Samuel Famiyeh, is a Senior Lecturer in operations and project management at the Ghana Institute of Management and Public Administration (GIMPA). Currently, he is the Head of Supply Chain, Operations, Project and Procurement Management at the Business School. He has published a series of papers in both local and international journals.

82 S. Famiyeh and D. Bassaw.

Daniel Bassaw is currently the Chief Technical Officer for eServices Africa Limited. He holds a degree in Computer Science and Statistics from the University of Ghana and MBA in Project Management from the Ghana Institute of Management and Public Administration (GIMPA), Ghana.

1 Introduction

The discipline of project risk management has developed over recent decades as an important part of project management. Several researchers (e.g., Miles and Wilson, 1998; Mullins et al., 1999) consider risk as an exposure or a probability of occurrence of a loss. Further, Miles and Wilson (1998) define risk as a barrier to success and Hertz and Thomas (1994) argue that risk is related to concepts of chance such as the probability of loss or the probability of ruin. Hillson (1955) indicated that failing to manage risks on projects will result in more problems, fewer benefits and a lower chance of project success. Research shows that if risks in IT projects are not effectively identified and managed, project failure may occur (Willcocks and Griffiths, 1997; Hedelin and Allwood, 2002). Managing risk has therefore become fundamental to successful project management (Carbone and Tippett, 2004).

Managing risk has therefore become essential to successful project management (Carbone and Tippett, 2004). Governments worldwide in trying to assist their citizenry have implemented some social intervention programmes to reduce their cost of living. One of these programs is a National Health Insurance Scheme that aims at assisting citizens in the delivery of health care. To facilitate registrations and insurance claims, there is the need to identify and implement some information technology projects that prescribe some equipment, applications, services, and basic technologies that provide information to support the operation, management, analysis, and decision-making functions (Gunton, 1993; Keen, 1994; Hoepleman et al., 1997; Wang, 2001; Yang, 2001). One of these projects is the construction of an outsourced contact centre to coordinate the relationship between the health insurance scheme and its key stakeholders.

In spite of the numerous risks that might be associated with such public sector IT projects, little research has been conducted in order to identify and reduce the risks of failure during their implementation and operation. Most of the research in project risks have been focused on the private sector IT projects or in the construction sector (Baccarini et al., 2004; Dey and Ogunlana, 2004; Miles et al., 2005; Chileshe and Yirenkyi-Fianko, 2012). The very recent works in health care delivery have been focused in the area of affordable health care and delivery quality and not so much specifically on the issue of risks has been addressed. Knepper, Sonenberg and Levine (2015) examined the relationship between nurse practitioners regulatory policies and their potential impact on the cost-savings of nurse practitioners diabetes management and identified significant relationships. Essounga-Njan (2015) also discusses the importance of quality and standards in the delivery and management of healthcare regardless of the National culture, focusing on the recent Patient Protection Affordable Care Act, commonly known

Project risk assessment of an outsourced call centre project 83

as the Affordable Care Act and found some relationships between healthcare quality, standards, technology and cost reductions. The recent related works in the area of call centres were more of social and economic implications of call centres (Jobs et al., 2007), call centre employee personality factors and service performance (Sawyer et al., 2009) and contributions of IT to centre productivity (Rowe et al., 2011). Most of the research in the literature studies related to call centres have rather been focused on post-performance drivers and little on the associated risk. Interestingly, Atsu et al. (2010) in an exploratory study of the contextual factors that influence the success of ICT projects in developing nations identified lack of comprehensive risk management as one of the factors that affect the success of ICT project in developing nations. It is, however, surprising that till date very few research works have been conducted to understand the perceived risks that might affect the success of an important public sector ICT project such as a customer call centre for a National health insurance scheme. The aim of this paper is to identify the perceived risks that might be associated with a national health insurance outsourced contact centre project. In this paper, we use the scenario-based technique, employing the likelihood and consequence of the perceived risk (ISO 31000:2009: Wideman, 1992; Carter et al., 1993; Chapman, 1998; Famiyeh et al., 2015) to identify and classify the risks into major, moderate and minor and finally present recommendations for the major risks identified.

The study is structured as follows: First, we present a summary of the relevant literature. Second, the theoretical framework for risk assessment is outlined. Third, the research method that explains methods for data collection and analyses are put forward. Then the main findings, conclusions, and implications are discussed. Finally, the study’s limitations and the potential for future research are presented. The findings presented will enable project managers to better understand the key risks in a typical public sector call centre outsourcing project in a developing nation and the appropriate risk response strategies to manage these risks. Although the research was conducted in an African context, it is envisaged that the outcome would be widely applicable in other similar settings in developing nation environments.

2 Literature review

2.1 Call centres

A call centre is an operation in which an employee utilises the computer to receive (inbound) or make (outbound) telephone calls and those calls are processed and controlled either by automatic call distribution (ACD) and/or predictive dialing system. The distinguishing feature of call centres is the interaction of ACD system and VDU technologies (Taylor and Bain, 1999).

Call centres are defined by Richardson and Gillespie (2003, pp.88–89) as having these distinct characteristics:


• Employees are engaged in specialist operations which integrate telecommunications and information systems technologies.

• Their work is controlled by automatic systems which virtually simultaneously distribute work, control the pace of that work and monitor their performance.

• Employees are in direct telephone contact with the customer through dealing with inbound calls, making outbound calls or a combination of the two.

• Employees in call centres are likely to not only take outbound and/or inbound calls but also, respond to e-mails as well (Jobs et al., 2007).

Call centres can be found at the end of most toll-free numbers and at the end of customer service and support for most goods and services produced (Business Support Services, 2002; United States Call Centres, 2002). Call centres are interesting areas to be researched into since they have become a central mechanism through which firms interact with their customers (Batt and Moyihan, 2002). Currently, all Fortune 500 companies have at least one call centre and more than $300 billion is spent annually on call centres around the world (Gilson and Deepak, 2005).

The role of call centres in managing phone calls, emails and letters for technical assistance, requesting answers about bills or types of service, or a variety of other inquiries as a frontline support can be a key source of goodwill or frustration (Richert, 2011).

2.2 Risk management in projects

The risk in projects can be defined as the chance of an event occurring that is likely to have a negative impact on project objectives and is measured in terms of likelihood and consequence (Wideman, 1992; Carter et al., 1993; Chapman, 1998). Risk management is an essential practice in achieving the successful delivery of IT projects (Tuman, 1993; Remenyi, 1999). According to Simister (2004) and Ward and Chapman (2004), risk management can lead to a range of project and organizational benefits including:

• Identification of favorable alternative courses of action.

• Increased confidence in achieving project objectives.

• Improved chances of success.

• Reduced surprises.

• More precise estimates (through reduced uncertainty).

• Reduced duplication of effort (through team awareness of risk control actions).

The most common definition of risk in software projects is in terms of exposure to specific factors that present a threat to achieving the expected outcomes of a project (Bannerman 2008). On this basis, risk in software projects is usually defined as the probability - weighted impact of an event on a project (Boehm, 1989; Charette, 1989, 1996). Simplistically, R = P × I where R is the risk exposure attributable to a particular


risk factor, P is the probability that the undesirable event will be realised and I is the impact or magnitude of the loss if the event occurs (Bannerman, 2008). Project-related risk management has attracted a steady stream of interest in the academic literature (Taylor, 2006), practice-based methods and standards (e.g., PMBOK and AS/NZS 4360:2004). The two most dominant models in software engineering are associated with Boehm (Boehm, 1989, 1991; Boehm and Ross, 1989) and PMI’s PMBOK Guide (ANSI/PMI 99-001-2004). Other influential models are found in the Software Engineering Institute’s CMMI (CMU/SEI-2006-TR-008), various industry and national standards (e.g., PRINCE2; ISO/IEC 16085:2004, IEEE 1540-2001; AS/NZS 4360:2004), and the academic literature (e.g., Charette, 1989, 1996; Simister, 2004).

2.3 Risks in ICT outsourced call centre projects

When a firm decides to outsource its Information Technology functions to a vendor, the firm is likely to encounter some risks (Aubert et al., 1999). According to Frost (2000), outsourcing IT functions lead to increase the risk of access to private and sensitive data. The decision to outsource a call centre activity tends to be risky and complicated despite the benefits that a company can expect to gain and if those risks are not properly identified and well mitigated (Wang et al., 2008). Any company seeking to outsource call centre activity runs a reputation risk since their work as frontline support staff could be a key source of frustration or goodwill (Richert, 2011). Richert (2011) identified five key risks associated with outsourced call centre project as security, availability, processing integrity, confidentiality, privacy and regulatory. Richert emphasises the need for the outsourced system to be protected against unauthorised physical or logical access and also, the need for the system to be available as agreed by the parties involved. It is also important for the outsourced system processing to be complete, accurate and timely. It is also important for employees to understand the system in order to operate it effectively. There is the need for the system to be operated in a confidential manner, maintain privacy and work within the accepted regulatory environment. Tafti (2005) reports that this needs to be considered when outsourcing any IT related activity so that proactive measures can be taken to safeguard the safety of customer privacy and their information assets. A major concern for companies is the sort of controls to put in place to ensure the privacy of customers given the confidential nature of the information received. When outsourced call centres are not operated within such environments, frustrated customers could lose confidence in the company and forgo its products for another (Richert, 2011).

Other risks issues associated with IT projects identified in the literature studies include inadequate third party performance (Krasner, 1998), friction between clients and contractors (Jones, 1993) and changing market conditions (Jones, 1993; King, 1994). The shortage of personnel for the project can also be a serious risk issue (Abdel-Hamid, 1989; Abdel-Hamid and Madnick, 1991; Engming and Hsieh, 1994). According to Cooper (1993), the quality and the skills of the personnel on the project can also affect the outcome of the project.


The operational capability of the provider is another risk associated with outsourced call centre projects, i.e., the expertise of the vendor to provide the services required (Benvenuto, 2005) or inability to perform the assigned task as expected (Gonzalez, Gasco and Llopis, 2005). According to Tafti (2005), the uncertainty in getting the agreed level of service due to the possibility of technological failure has the potential to affect an outsourced call centre activity and firms need to consider it carefully.

The collections of unrealistic requirements (Krasner, 1998) can also affect the objectives of the project. Inadequate user documentation (Boehm, 1989), as well as incomplete requirements (Shand, 1993; Engming and Hsieh, 1994) in one way or the other, can result in the construction of a solution that does not meet project objectives. Processing integrity has to do with completeness, accuracy and timeliness of service (Richert, 2011) including lack of necessary capabilities such as quality staff who understand the business of the outsourcer in order to achieve its operational performance targets. Thus, the quality of service provided may suffer if the service provider does not have a quality staff.

When the schedule and budget of the project are unreasonable (King, 1994; Krasner, 1998), it becomes difficult to realise the project objectives owing to unrealistic restrictions placed on the project’s budget, schedule, quality or level of performance. In some cases, there is no agreed end user acceptance and testing as well as sign off criteria (Boehm, 1989); this results in delays in project close-out owing to an unclear understanding of what constitutes sign-off and final solution delivery. When the project manager fails to review daily progress (Yourdon, 1996), it is most likely that the project may slip. Lack of single point accountability (Fuerst and Cheney, 1982; Thomsett, 1995), can also affect the success of the project especially the projects seem to have many team leaders but no single point of responsibility for deliverables. Over specifying the project requirements (Boehm, 1989; Turner, 1999; Cunningham, 1999) can also affect its success (Baccarini et al., 2004).

Although the risks associated with an outsourced call centre projects has been receiving some attention in the literature, the focus has mostly been on the risk associated with general ICT projects and not specifically on outsourced call centre projects. Moreover, these studies were mostly conducted outside the African environment, hence the need to explore the risks surrounding outsourced call centre projects in the African perspective.

2.4 Conceptual model

Schmidt et al. (2001) and Keil et al. (1998) recommend the need to first identify risks before any meaningful risk management strategies can be developed. After the identification of risks, the issues identified can be assessed using two parameters, i.e., risk probability and risk consequence (Risk Management Standard AS/NZS 4360, 1999; ISO 31000, 2009; Chapman and Ward, 1997; Ward, 1999; Patterson and Neailey, 2002; Pyra and Trask, 2002). Risk probability or likelihood indicates a chance of a risk event occurring while risk consequence, severity or impact represents an outcome generated from the risk event. The magnitude of the risk is the product of probability and


consequence (Ammar et al., 2007). After assigning the probability and severity values, risk events are represented on a grid consisting of probability on one axis and impact on another are often used to define threshold regions on the grid, which represent high and low risk events (Risk Management Standard AS/NZS 4360, 1999; ISO 31000:2009; Chapman and Ward, 1997; Ward, 1999; Pyra and Trask, 2002; Stewart and Melchers, 1997; Royer, 2000; Kululanga and Kuotcha, 2010). Probability and impact grids provide a simple format for showing the relative importance of risk events (Ammar et al., 2007; Royer, 2000). Based on these concepts, this work adopts the concepts suggested by Schmidt et al. (2001) and Keil et al. (1998), by first identifying the risk issues before assessing them using the risk probability and risk consequence (Management Standard AS/NZS 31000, 2009; Chapman and Ward, 1997; Ward, 1999; Patterson and Neailey, 2002; Pyra and Trask, 2002). ISO 31000:2009 was adopted for this work since it can be used by any public, private or community enterprise, association, group or individual. This makes ISO 31000:2009 not specific to any industry or sector. The conceptual model for this work is presented in Figure 1.

2.5 Research methodology

Based on the research objectives, we identified some of the experts who were involved in the outsourced call centre project as well as other experts who have been involved in other call centre projects before and are willing to participate in the research by virtue of their knowledge or experience (Bernard 2002; Lewis and Sheppard, 2006). This allowed the best respondents to be selected based on their knowledge of the topic and their availability. The data for this research were collected using two-phase interviews - this involved key client’s and consultant’s personnel due to their direct association with the project and their decision-making roles as well as experts who have previously been involved in similar works. As the information solicited requires in-depth knowledge and sound experience about risks in outsourced call centre projects, a purposive sampling approach was adopted to select this group of experts who should satisfy at least one of the following criteria (Chan et al., 2001; Manoliadis et al., 2006):

• Having extensive working experience in ICT or call centre projects.

• Having current/recent and direct involvement in risk management of ICT or call centre projects.

• Having sound knowledge and understanding of the concepts of call centre projects.

In fact, Baccarini et al. (2004) use a similar approach to assess the risks in IT projects in Australia as well as Yongjian et al. (2011) adopted the same method to understand the risks in China’s PPP projects.

The full questionnaire was first pilot tested using graduate students pursuing MIS and IT programs at a university in Ghana and some top IT experts for readability, coherence, clarity and consistency. Minor changes were made to the questions and scales based on the feedback received. The research identified 30 IT experts during the first phase interview where they were asked to present their perception of risks they envisage might be associated with outsourced contact centre projects. During this phase, the experts were


asked to list their perception of risks that might affect the outsourced call centre project. After collating, from all the experts, the researchers identified 23 risk factors from all the respondents. This information was used for the second phase of the process. During the second phase, these risk factors identified were then presented to the experts to assess these risk factors based on their perceptions of their likelihood of each occurring as well as severities if they actually occur as recommended by Risk Management Standard AS/NZS 4360 (1999); ISO 31000 (2009). Likelihood of occurrence values was then assigned to each risk factor as well as impact or severity values as required. Answers to questions reflected informants’ perceptions of the risk associated with the project. Participants were asked to answer by choosing a value from 1 to 5, where one signified ‘no’ or the lowest value in response to the question, and 5 indicated ‘yes’ or the highest value (Bannerman, 2008). The scale ranges (Gray and Larson, 2006) are presented in Table 1.

Table 1 Likelihood and impact scale values used

Scale Likelihood Scale Severity or impact 1 Very unlikely:

expect one occurrence or less every month

1 Very low: • The impact will not affect the definition of the project

requirements • Clients existing applications can easily be integrated • Proposed contact centre technology addressing the maximum

needs of clients • Minor data connectivity challenges between the existing

clients office and that of the consultants office • Minor delay in the delivery and installation of furniture • Minor delay on the part of telecom providers in the delivery

of service • Minor delay on the part of related government agencies • Negligible unreliable voice connectivity between telecom

services provider and the consultant office • Minor errors in project planning • Minor change requests on the part of the client • Very few inexperienced staff assigned to project • Minor resource conflicts with other projects • Minor training needs of brand ambassadors on clients

applications • Minor lack of process alignment between the contact centre

and the client’s back office • Minor duration and scheduling errors • Minor project scope and scope creep • Minor coordination and communication problems among

project stakeholders


Table 1 Likelihood and impact scale values used (continued)

Scale Likelihood Scale Severity or impact 2 Unlikely: expect

one occurrence every three weeks

2 Low: • The impact will slightly affect the definition of the project

requirements • Clients existing applications can be integrated with slight

difficulty • Proposed contact centre technology addressing some needs of

clients • Some data connectivity challenges between the existing

clients office and that of the consultants office • Some delay in the delivery and installation of furniture • Some delay on the part of telecom providers in the delivery of

service • Some delay on the part of related government agencies • Some unreliable voice connectivity between telecom services

provider and the consultant office • Some errors in project planning • Some few change requests on the part of the client • Few inexperienced staff assigned to project • Few resource conflicts with other projects • Some training needs of brand ambassadors on clients

applications • Lack of process alignment between the contact centre and the

client’s back office • Some duration and scheduling errors • Some project scopes and scope creep • Some coordination and communication problems among

project stakeholders 3 Fairly likely:

expect one or more occurrences every two weeks

3 Moderate: • The impact will moderately affect the definition of the project

requirements • Clients existing applications can be integrated with moderate

difficulty • Proposed contact centre technology addressing moderate

needs of clients • Moderate data connectivity challenges between the existing

clients office and that of the consultants office • Moderate delay in the delivery and installation of furniture • Moderate delay on the part of telecom providers in the

delivery of service



Scale Likelihood Scale Severity or impact • Moderate delay on the part of related government agencies

• Moderate unreliable voice connectivity between telecom services provider and the consultant office

• Moderate errors in project planning • Moderate change requests on the part of the client • Moderate inexperienced staff assigned to project • Moderate resource conflicts with other projects • Moderate training needs of brand ambassadors on clients

applications • Moderate lack of process alignment between the contact

centre and the client’s back office • Moderate duration and scheduling errors • Moderate project scope and scope creep • Moderate coordination and communication problems among

project stakeholders 4 Likely: expect

one or more occurrence every week

4 High: • The impact will highly affect the definition of the project

requirements by 50% • Clients existing applications can be integrated with high

difficulty • Proposed contact centre technology addressing little needs of

clients • High data connectivity challenges between the existing clients

office and that of the consultants office • High delay in the delivery and installation of furniture • High delay on part of telecom providers in the delivery of

service by 50% of the duration • High delay on the part of related government agencies

causing about 50% of the duration • High unreliable voice connectivity between telecom services

provider and the consultant office • High errors in project planning • High change requests on the part of the client • High inexperienced staff assigned to project • High resource conflicts with other projects • High training needs of brand ambassadors on clients

applications



Scale Likelihood Scale Severity or impact • High lack of process alignment between the contact centre

and the client’s back office • High duration and scheduling errors causing project cost to

increase by 50% • High project scope and scope creep causing project cost to

increase by 50% • High coordination and communication problems among

project stakeholders 5 Very likely:

expect one or more occurrence every day

5 Very high: • The impact will highly affect the definition of the project

requirements over 50% • Clients existing applications can be integrated with very high

difficulty • Proposed contact centre technology addressing no needs of

the client • Very high data connectivity challenges between the existing

clients office and that of the consultants office • Very high delay in the delivery and installation of furniture • Very high delay on part of telecom providers in the delivery

of service over 50% of the duration • Very high delay on the part of related government agencies

causing over 50% of the duration • Very high unreliable voice connectivity between telecom

services provider and the consultant office • Very high errors in project planning causing serious quality

and duration problems • Very high change requests on the part of the client causing

serious duration problems • Very high inexperienced staff assigned to project causing

quality problems • Very high resource conflicts with other projects • Serious training needs of brand ambassadors on clients

applications • Serious lack of process alignment between the contact centre

and the client’s back office • Major duration and scheduling errors causing project cost to

increase over 50% • Very high project scope and scope creep causing project cost

to increase over 50% • Very high coordination and communication problems among

project stakeholders


The ‘mean score’ values were used to analyse the various risks. Chan and Kumaraswamy (1996) adopted the ‘mean score’ method to establish the relative importance of reasons for the delay in civil engineering projects in Hong Kong as suggested by the clients, consultants and contractors. Yongjian et al. (2011) also used a similar method to understand the risks in China’s PPP projects: ranking of their probability and consequence. We, therefore, adopted the mean values of the product of the likelihood and the severity to know the risk value of the issues identified in order to classify them into high, medium and low risks in our work (Bannerman, 2008; Yongjian et al., 2011).

A risk assessment matrix was then generated based on total risk values from the product of the likelihood and severities as suggested by Chapman and Ward (1997), Boehm (1989), Charette (1989, 1996). This risk assessment matrix presents a framework that easily depicts the various risk categories into high, medium and low-risk zones. The risk matrix, therefore, presents the various risk categories of the outsourced call centre into high, medium and low-risk zones as used by Chang et al. (2015), in understanding risks in container shipping.

2.6 Background information of respondents

In all 30 senior officers/managers were surveyed in this study comprising of experts from the client’s company as well that from consultants executing the project. Their designations were managers, supervisors, customer service representatives and information technology engineers. Their age group ranges between 25 and 45 years old. In terms of working experience, those who participated have worked between one and seven years. The high level of experience of these respondents suggests they were very familiar with the issues being discussed and, therefore, adds to the objectivity of their responses.

3 Results

3.1 Risk identification

The first phase interview identified 23 risk factors that might affect the outsourced contact centre project from the thirty experts interviewed. These were grouped into categories which reflect common sources of risks to the project (Hillson, 2002). All common ideas were therefore put together as one to avoid duplications of common issues. Using PM1, 2004, these risks identified were grouped into four key categories; namely, technical risks, project management risks, organizational risks, and external risks.

3.1.1 Technology risks

• Contact centre requirements not clearly defined

• Proposed contact centre technology not addressing the needs of the client


• Clients existing applications, not user-friendly

• Integration challenges between contact centre and the existing client’s systems

• Data connectivity challenges between the existing clients office and that of the consultant offices.

3.1.2 External risks

• Delay in delivery and installation of furniture

• Telecom providers not delivering services on time

• Bureaucracy of related government agencies

• Force majeure

• Unreliable voice connectivity between telecom services provider and that of the consultant office.

3.1.3 Organization risks

• Incomplete identification of project dependencies

• Changes request by the client

• Inexperienced staff assigned to the project

• Lack of specialised staff

• Resource conflicts with other projects

• Inadequate training of brand ambassadors on client’s applications

• Lack of process alignment between the contact centre and the client’s back office

• Excessive approval procedure in affiliated government agencies.

3.1.4 Project management risks

• Estimating and scheduling errors

• Inadequate project scoping and scope creep

• Lack of project manager delegated authority.

• Lack of coordination and communication amon project stakeholders

• Inadequate program planning and scheduling

3.2 Risk assessment

The next step in the process was the assessment of the identified risk. The risk is measured using two parameters such as risk probability and risk consequence (Risk


Management Standard AS/NZS 4360, 1999; ISO 31000, 2009; Chapman and Ward, 1997; Ward, 1999; Patterson and Neailey, 2002; Pyra and Trask, 2002). As mentioned earlier, during the second phase, the 30 IT experts were asked to assess these risk factors based on their perceptions of their likelihood of occurring as well as severities if they really occur using the scales recommended in Table 1. Consequently, likelihood and severity values were then assigned to each risk factor by all respondents. The most common definition of risk in software projects is in terms of exposure to specific factors that present a threat to achieving the expected outcomes of a project. We adopted the mean values of the product of the likelihood and the severity to know the risk value of the issues identified in order to classify them into high, medium and low risks in our work (Bannerman 2008; Yongjian et al., 2011). Table 2 presents the ‘mean scores’ for the likelihood and severities. This forms the basis for the construction of the risk severity matrix presented in Figure 1.

Table 2 Risk assessment - average scores of likelihood and severities of project risks

ID Risk event Likelihood Impact Risk value

A Integration challenges between contact centre and the existing client’s systems

4 5 20

B Incomplete identification of project dependencies 2 5 10 C Inexperienced staff assigned to the project 2 4 8 D Resource conflicts with other projects 3 3 9 E Excessive approval procedure in affiliated government

agencies 3 2 6

F Changes request by the client 3 4 12 G Inadequate project scoping and scope creep 4 4 16 H Bureaucracy of government agencies 3 3 9 I Data connectivity challenges between the existing clients

office and that of the and consultant offices 2 5 10

J Unreliable voice connectivity between telecom services provider and that of the consultant office

2 5 10

K Telecom providers are not delivering service on time 3 5 15 L Lack of specialised staff 3 3 9 M Estimating errors 3 4 12 N Contact centre requirements not clearly defined 2 4 8 O Proposed contact centre technology not

addressing the needs of the client 2 4 8

P Clients existing applications, not user-friendly 2 4 8 Q Lack of coordination and communication among

project stakeholders 3 5 15

R Delay in the delivery and installation of furniture 2 3 6 S Lack of process alignment between the contact centre and

the client’s back office 3 4 12


Table 2 Risk assessment - average scores of likelihood and severities of project risks (continued)

ID Risk event Likelihood Impact Risk value

T Inadequate program planning and scheduling 3 3 9 U Inadequate training of Brand Ambassadors on client’s

applications 2 4 8

V Lack of project manager delegated authority 2 5 10 W Force majeure 1 5 5

Figure 1 Risk management process based on ISO 31000:2009

Source: Adapted from ISO 31000 (2009)

Each risk event has been assigned an ID as indicated in Table 2. This is to enable the plotting of these risks events on a risk severity matrix which depicts the position of these risk issues as to whether they are minor, moderate or high risks issues as presented in Figure 1.

3.3 Risk severity matrix

The severity of the different risks issues affecting the call centre project is categorised into the risk severity matrix in Figure 2. The values in the severity matrix were obtained by multiplying the likelihood value and the corresponding impact value (Risk Management Standard AS/NZS 4360, 1999; ISO 31000, 2009; Chapman and Ward, 1997; Ward, 1999; Patterson and Neailey, 2002; Pyra and Trask, 2002). The matrix is typically structured around the impact and likelihood of the risk event. The matrix is divided into black, grey and white zones representing major, moderate and minor risks, respectively. The black zone is centred on the top right corner of the matrix (high


impact/high likelihood), while the white zone is centred on the bottom left corner (low impact/low likelihood). The moderate risk, grey zone extends down the middle of the matrix (Larson and Gray, 2008). The categories of the various risks factors were classified as follows:

Minor - 1–4 (White zone); Moderate - 5–10 (Grey zone); and High - 11–25 (Black zone).

The very high risks based on the threshold value are shown in Table 3.

Figure 2 Risk severity matrix

Table 3 Risks identified as high priority - black zone

ID Risk event Risk value

A Integration challenges between contact centre and the existing client’s systems

20

G Inadequate project scoping and scope creep 16 K Telecom providers are not delivering service on time 15 Q Lack of coordination and communication among project stakeholders 15 F Changes request by the client 12 M Estimating errors 12 S Lack of process alignment between the contact centre and the client’s

back office 12

3.4 Risk response development

After the assessment of the various risk factors, according to Simister (2004), there is the need to develop strategies to respond to those that would be classified as serious risk or those in the ‘danger’ zone. Flanagan and Norman (1993) indicated that these responses can be classified as mitigating, avoiding, transferring, sharing, or retaining. Based on this, proposals for responses to the high priority risks issues in Table 3 have been developed.


The output of this exercise is the risk response matrix shown in Table 4. This risk response matrix summarises how the high priority risk events identified would be managed. The risk response matrix presented in Table 4 presents the risk ID, risk event, risk response plan, contingency plan, triggers, and responsibility.

Table 4 Risk response matrix

ID Risk event Risk value Response

Contingency plan Trigger Responsibility

A Integration challenges between the call centre and client’s systems

20 Mitigate: Conduct early integration tests

Use a temporary manual workaround

Not resolved within 8 hours

IT Manager

G The possibility of project scope creep

16 Avoid Clarify requirements and sign off

Engage key stakeholders and implement agreed scope creep measures

Stakeholders requesting for changes

Project Manager

K Telecom providers are not delivering service on time

15 Avoid: Have an advance completion schedule and an alternative provider

Use the alternative provider

Services not delivered within 24 hours

IT Manager

Q Lack of coordination and communication among project stakeholders

15 Mitigate: Engage stakeholders and get their buy-in from the very beginning of the project. Sign off on communication plan

Review communication plan and re-engage the stakeholders

Stakeholders reporting of not having project updates

Deputy Communications Director

F Change request by client

12 Mitigate: Clarify acceptable changes, document the change procedure and sign off

Review change management document and re-engage stakeholders

Changes from the client that are outside the scope

Project Manager


Table 4 Risk response matrix (continued)

ID Risk event Risk value Response

Contingency plan Trigger Responsibility

M Estimating errors

12 Mitigate: Assign skilled people and adopt the bottom-up approach of estimation

Use a backup estimation team

Estimates are 10% above or below the top down estimates.

Project Team

S Lack of process alignment between the contact centre and the client’s back office

12 Mitigate: Meetings with the client to get their commitment, document the processes, test them and sign off

Review alignment processes and re-engages the stakeholders

Two or more complaints of delayed resolutions

Director of Operations

4 Discussion and conclusion

The main objectives of this study were to identify the perception of risks associated with an outsourced call centre project intended to be the main contact centre as far as the relationship between national health insurances scheme and its clients are concerned. We used two-phase interviews involving key experts with experience in outsourced call centre projects and well as key ICT personnel involved in the project due to their direct association with the project and decision-making roles. We identified eight issues that are critical to the success of the project. There were:

• Integration challenges between the contact centre and the existing client’s systems.

• The possibility of project scope creep.

• Telecom providers are not delivering services on time.

• Lack of coordination and communication among project stakeholders.

• Changes request by the client.

• Estimating errors.

• Lack of process alignment between the contact centre and the client’s back office.

Integration challenges between the new contact centres and the existing clients systems can affect the success of the project. When existing and new systems are not well integrated, functionally become very ineffective (Jones, 1993; King, 1994). An unstable project scope problem arises when key deliverables of projects are not well defined before implementation commences. In such instances, there is always the possibility of


project scope changes by the client. This, in turn, delays the duration of the project as well as the cost. Untimely provision of services at the call centre also affects the quality of the services. This normally frustrates customers and makes them loose interest to forgo the services for another (Richert, 2011; Tafti, 2005). From the results, it is important to have effective coordination and communication among the project stakeholders. For projects of such nature, coordination and communication are very important to its success (Famiyeh and Muzzu, 2013).

Change request or requirements by the client was also identified as one of the significant risks that might affect the project. Continuous changes to requirements by client or stakeholders affect the functionality of IT projects throughout the project life cycle. This is consistent with Jones (1993), King (1994) and Clancy (1994). Errors in the estimation of projects budgets and schedules were also identified as one of the key risks that might affect the project (Cooper, 1993). When projects schedules and budgets are unreasonable estimated, the project is unable to realise its objectives owing to unrealistic restrictions placed on the project’s budget, schedule, quality or level of performance (King, 1994; Krasner, 1998). A project failing to meet its committed deliverables or is significantly over budget can be terminated (Boehm, 1989; King, 1994; Turner, 1999). The last but not the least issue identified was the lack of process alignment between the contact centre and the client’s back office, a very important issue to facilitate the operation of the call centre.

4.1 Implications of study for practice and theory

The high-risk issues identified with a typically outsourced call centre project were: the integration challenges between the contact centre and the existing client’s systems; the possibility of project scope creep; telecom providers’ not delivering services on time; lack of coordination and communication among project stakeholders. The others were: changes request by the client; estimating errors; and lack of process alignment between the contact centre and the client’s back office.

The results have implications for practice and theory. For practice, the results have implications for project managers, outsourced call centre operators and their clients and policy makers.

For project managers, poor definition of project requirements during the planning stage as well as changes in clients request can lead to some changes in the scope during projects implementation, which in turn affects the quality, duration, cost as well as performance requirements. It would, therefore, be technically advisable for project clients as well as managers to meet to discuss what the priorities of the projects are and sign off a clear project charter, spelling out what should be included and what should be excluded prior to project implementation. It was also clear that for projects to be successful there is the need for effective coordination and communication among all stakeholders especially the key stakeholders throughout the project life cycle. Without a clear plan of responsibilities, coordination and communication, project stakeholders lose track of what sort of information should be carried out, to whom, by who and at what point in time in


the course of the project. To effectively coordinate and communicate information during project implementation, there is the need for the project management team to have clear communication plan before the commencement of the project. This should spell out the type of information to be prepared, who is responsible, the targeted stakeholder(s) and the time of delivery. This makes communication very effective throughout the life of the project. Another important issue originating from the study was the issue of poor estimations in terms of duration and cost of the project. When durations and budgets are poorly estimated, the success of the project become very difficult, especially for time- and cost-constraints projects. To reduce these errors, it is important to always adopt the bottom-up strategy during estimation, by using very detailed work breakdown structures and also allowing those to be involved in the project with the adequate technical know-how to undertake these estimations. This reduces the bias and errors which in turn keeps project duration and budget on course.

For outsourced call centre service providers, it is important to have a synergy with existing and new systems, it is important for clients and service providers to have clear strategies for integrating existing systems with newly developed centres. If plans are not developed to figure out how newly developed systems can be integrated with existing ones, it is always very difficult to achieve harmonization between the two systems. This means prior to the commencement of any project that demands integration of systems, it is important to assess the requirements of the old system to enable the definition of new requirements that permits easy integration. It is also important to the service provider to always go in for the best technologies to avoid connection problems between the customers and the outsourced call centre for quality and quicker delivery of services.

For policy makers outsourcing such important public sector service, it is important to request services to experienced ICT experts at the initiating stage to develop a clear project scope with detailed plans to avoid the presentations of changes request in the middle of the project. In addition, it is important to avoid ‘soul sourcing’, rather an open competitive bidding in order to get the best providers to deliver such important projects in a very competitive manner.

For theory, the new findings concerning the perception of risk of outsourced call centres can be useful for more comprehensive studies on the risk issues associated with outsourced contact centre and other information technology projects, using more data from different projects in developing countries. Such a study will provide a more theoretical understanding of the risk factors that affects outsourced contact centre projects and other information technology projects in developing and the developed nations.

5 Limitations of study and recommendations for future research

This study only considered only one outsourced call centre project in a public sector based on clients and consultants perception of risks. Apart from these factors perceived by these experts, there is also the need to investigate the perception of other experts in other sectors as well as consultants other than those who participated to reinforce the risk


factors indicated in this study. Future studies should apply other risk management tools to the risk factors indicated in this study. This would be useful in ascertaining the robustness of the positions of the risk factors as indicated by this study.

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