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Definitive Guide to Technical Support Outsourcing & Offshore IT Services

Author: Gretel Digo

Posted: March 14, 2015

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Technical support or tech support refers to services that assist users of electronic services or mechanical products.  Products include mobile phones, tablets, laptops, desktop computers, software, hardware, IT infrastructure, and cloud-based services.  The goal of technical support is to resolve issues related to a specific product or service.

Companies provide free or paid technical support for the products they sell.  Support can be given in person by support staff in a brick and mortar store, over the phone, and online via chat, email, forum comments or incident reporting.  Many enterprises also have in-house IT departments that provide troubleshooting and support for their own employees.  Some small and medium-sized businesses (SMBs) may outsource technical support for their employees to reduce costs and gain strategic benefits

Technical Support Outsourcing

Technical support outsourcing is the practice of hiring a third party or outside expert to handle an organization's tech support functions.  Tech support outsourcing is typically included in a company's IT outsourcing budget and IT outsourcing campaign.

According to a study by market research firm Parks Associates, the technical support market for SMBs in the United States will grow 14.4 percent (compound annual growth rate) from 2012 to 2016 and reach $25 billion by 2016.  Market growth will be driven by increasingly complex networks and trends like cloud services and bring your own device (BYOD).

As companies rely more and more on 24/7 uptime, major outsourced tech support providers are introducing new and robust forms of technical support that targets small businesses.  Providers will leverage their existing relationship with SMBs to deliver these new products.  Similarly, large enterprises are under pressure to keep pace with technology and reduce massive expenses associated with business disruption due to unexpected downtime.  Enterprise tech support providers are expanding and improving their offerings to meet these needs.

Technical Support Coverage

Technical support professionals are also called technicians, tech support officers, help desk operators, maintenance engineers, and applications support specialists.  Tech support specialists have in-depth understanding of technology products and information systems, and they apply their technical knowledge to resolve hardware, software, network, or systems issues. 

Tech support professionals help customers through various channels: direct questions and basic issues can be answered through telephone, SMS, or online, while face-to-face interaction may be reserved for complicated hardware or software problems.

The quality of technical support that a customer receives usually depends on whether the service is paid or free.  Most companies offer free technical support to customers through various channels, but only a few provide dedicated, one-on-one support.  Premium technical support services are typically available as a subscription or pay-as-you-go model.

The pay-as-you need model is a one-time charge for resolving issues in a one-off manner.  Monthly or annual subscriptions can be customized to expand or reduce the amount of support the customer receives.  This is ideal for companies requiring routine maintenance and support.

Technical Support Responsibilities

Responsibilities of technical support professionals vary.  In general, an organization's internal tech support staff is mainly responsible for the smooth operation of computer systems, ensuring that employees get maximum benefits from them.  Individual tasks may also include:

  • - Installation, configuration and diagnostics of hardware, software and applications
  • - Customer support and issue resolution through telephone, online or face-to-face interaction
  • - Network and systems monitoring
  • - Network and systems maintenance
  • - Troubleshooting systems and network problems
  • - Parts replacement
  • - Safety checks on computer equipment
  • - Procedure documentation and reporting
  • - New account and password setup
  • - Timely call-out response
  • - Testing and evaluation of new applications
  • - Knowledge and supporting of new applications and technology initiatives
  • - Virus and malware support
  • - Data recovery
  • - Customization

Technical Support Tiers or Levels

Technical support can be classified into four levels or tiers.  Businesses may use more than one level of support depending on their internal and customer needs.  A multi-level support system is designed to address problems in the most efficient way possible.  Tier 0 refers to scripted answers to non-technical problems (like status of an order, incident reports) and short-duration client interactions.  Tier 1 support includes scripted answers to known issues with well-defined client interaction durations.  Tier 2 refers to free-form or unscripted problem analysis, resolution or escalation to tier 3.  Tier 3 covers engineering, bug fixes, key releases, and new features or enhancements.

Call Out IT Support Service Agreement

Call out or maintenance technical support is a type of IT service contract where the services rendered and payment are pre-negotiated.  The customer "calls out" the technician or service provider to address a technical issue.  The customer pays for the services of the technician as well as the materials used based on an agreed-upon rate.  Call out differs from a fixed price service arrangement, where the customer pays the technician a fixed amount regardless of number or hours worked and materials used.

The terms of the call out contract are usually for a fixed duration, typically 12 months, with a minimum fee to be paid by the customer on a monthly basis.  The call out terms can be 24/7 support or for certain hours in a day for 12 months, and the rate applied is based on a previously agreed schedule. 

For example, company ABC hires a technical support professional to install a network in their office.  The technician may charge the company for time (the number of hours it takes to install the network) and materials (the cost of direct materials like cables, hard drive, software, etc.  plus any markup).

Benefits

Call out is similar to a time and materials service contract in other industries, particularly construction.  "Time and materials" refers to payment for the number of hours of work performed by the technician, direct expenses incurred, and necessary materials purchased during the project.

Call our or time and material contracts are often used when the full scope of the project is not well defined or understood.  Most consulting contracts begin as call out, with the technician being paid by the customer for hours of work and direct expenses.  Once the project scope is defined and the duration is determined, the technician may bill the customer using milestone payments or fixed-price billing.

Block Hours Tech Support Service Contact

Block hours technical support is a type of service contract that allows a customer to buy a block of time of support services for a fixed price.  Block hours are usually prepaid or paid in advance.  Instead of charging by the hour for a technician's services, block hours are offered at a reduced rate per hour.  However, block hours are sometimes offered at a standard rate. 

This type of technical support arrangement gives customers the flexibility to use the hours when they need it and whenever problems arise, while avoiding the trouble of having to pay multiple bills.  Block hours are ideal for businesses or individuals that require regular and routine tech support, but cannot or are unwilling to pay for managed services or ongoing subscriptions. 

Most providers offer block hours that can be used for any and all of the services provided by the company.  For example, IBM offers prepaid block hours for premium software support that allows customers to access the company's software expertise.  Support services are delivered on an hourly basis over a 12-month period and covers general technical consulting, operations support, developer support, emergency support, and other services.  Other providers also allow customers to access reports that itemize services performed and the remaining balance of block hours. 

Benefits

Block hours tech support is a simple and flexible way to access comprehensive professional IT services, from routine maintenance of servers, network, and workstations to premium consultancy services.  Block hours support is relatively more affordable, allowing individuals and businesses to easily get started with a company's professional tech support services and access value-added services like project management and consultancy.

Block hours can be used anytime within the terms of the contract, allowing customers to manage and control IT budgets.  There is no need to pay upfront for on-demand support whenever you encounter IT issues.  Some companies allow customers to top-up their existing block hours balance.

Managed Services Tech Support

Managed services tech support is a type of service agreement where the customer pays for management of day-to-day IT support for a fixed or variable fee.  The suite of services and resolution times are well-defined and may be provided proactively or when necessary as determined by the managed services provider (MSP).  MSPs often use remote monitoring and management (RMM) software to deploy and control managed IT support services.

Besides providing IT support services, managed services providers may be hired to manage multiple IT support vendors and evaluate their performance according to the client's requirements.  In this type of service agreement, the MSP acts as a neutral party that offers comprehensive and best in class IT support solutions at a reduced cost.  The MSP uses a vendor management system (VMS) to manage the contingent IT support workforce.

The managed services provider usually charges an upfront fee for setup and then a fixed or variable monthly fee on an ongoing basis.  This gives the client predictability when budgeting for IT support costs and allows them to pay only for what services and materials they use.  In general, the customer retains overall control and responsibility over the managed services.

A comprehensive suite of managed IT support services may include IT management, setup, helpdesk support and maintenance, onsite support, project management, IT advice and consulting, cloud services, application services, reporting, short-term/contingency staffing, and IT roadmap.

Benefits

Managed IT support is a way to reduce cost and complexity by transferring the IT management burden to a third party and to free up resources for core activities and business growth.  Managed services are designed to provide a single point of accountability and simplified structure for hardware, software, infrastructure, and IT workforce support.

Managed services also help improve reliability and efficiency and reduce downtime through proactive monitoring.  Instead of being responsible for troubleshooting and coordination in a multi-vendor environment with different service levels, the company transfers responsibility to the managed services provider.

Crowdsourced Technical Support

Crowdsourced IT support is a type of support provided by or sourced from a group of people, usually online and through discussion boards, website forums, and online communities.  Crowdsourced tech support is typically free, but some companies may charge for premium tech support services.  Many companies have some form of crowdsourced support for their products and services.  It allows them to reduce support costs and shift work away from IT professionals or store help desk representatives to online experts who typically offer their services and expertise for free.

For example, Microsoft and Apple have online discussion communities where anyone can register and become a member.  Members can then sound off on various topics, ask for help, and provide troubleshooting support for tech issues.  Many online discussion boards also have extensive knowledge databases, often compiled by the in-house technicians, that free to access for members.  Tech support knowledge databases usually provide responses to routine questions. 

The paid crowdsourced tech support model is on the rise.  Vodafone Germany's peer-to-peer tech support model charges its users an hourly rate for face-to-face or online tech support provided by its crowdsourced IT support team.  The technicians are not all IT professionals (many are in their teens or 20s) or formally trained by Vodafone; instead, they are invited and chosen based on their tech support skills.

Companies that choose to crowdsource a part of their tech support services realize that the long-term investment in the platform costs less than hiring full-time IT support technicians.  While there are costs associated with content moderation and customer feedback monitoring, the overall expense is significantly less than traditional tech support.

Benefits

Customers today feel that they have a say in how a company does business with them.  In an age where end users expect not only high-quality tech support but acknowledgment and personalized service, the most successful businesses are those that use technology to adapt to their clients.  For customers with an internet connection, crowdsourced tech support is a fast and easy way to troubleshoot problems with mobile devices, computers, software, hardware, and consumer electronics. 

Outsourcing Technical Support

Technical support outsourcing is the transfer of responsibility for an organization's internal IT support to an outside expert or service provider.  Technical support can be outsourced to a provider within the state or country (local), in a neighboring area (nearshore), or in a far-flung location (offshore).  The third party handles an entire business function and provides process expertise, technology, operations and support.  Depending on the service agreement or contract, the customer may or may not give up control over management and operations.

Most companies outsource their IT support functions to reduce cost, reduce complexity, and keep pace with advances in technology.  Companies also see IT support outsourcing as a strategic tool that can improve focus and productivity, streamline processes, grow the bottom line and help them stay competitive in an increasingly global market.

Tech support outsourcing began as a solution to organizational complexities introduced by globalization and free trade economies.  Outsourcing IT support and maintenance functions to third parties was seen as the best way to reduce overall costs and access domain expertise.  Due to the non-tangible nature of IT services (making it unnecessary for the goods to services to be produced at the site of consumption), IT outsourcing will always be an attractive business model.

Tech Support Outsourcing Market and Trends

The global technical support outsourcing market is expected to grow at 5.92 percent CAGR from 2014 to 2018, according to a recent study by TechNavio.  Most companies outsource tech support services because outsourcing reduces risk and is more affordable.  The report showed that market growth is mainly driven by reduction in total cost of ownership associated with adopting innovative models from service providers.

A key market trend is changing consumer preferences, forcing companies to innovate and offer new and improved support services.  The rise in available service delivery options also mean new system integration and hardware/software troubleshooting processes.  According to the report, one of the biggest challenges for the tech support outsourcing market is data security.  Providers and customers struggle with lack of control over security and the risk of privacy loss and misuse of confidential information.

In the United States, market research firm Parks and Associates predicted that the technical support market for small and medium sized businesses will grow at a 14.4 percent CAGR from 2012 to 2016 and reach $25 billion by 2016.  Primary drivers of market growth are network complexity and trends like cloud services and bring your own device (BYOD).  Large enterprises are also under pressure to reduce expenses associated with business disruption due to unexpected downtime. 

Tech Support Outsourcing Benefits

Providing high-quality in-house technical support is expensive, with massive investment required in labor, overhead, and maintenance.  As new devices, consumer electronics, and applications are released, the cost of IT support grows even higher.  Companies that outsource IT support save money and realize other value-added benefits.

Cost reduction through tech support outsourcing is achieved by transferring the cost burden associated with recruitment, training, infrastructure, and systems maintenance to the third party.  Offshore IT support outsourcing allows companies to realize even greater cost savings due to labor arbitrage.

Scalability is the ability of an organization's systems and infrastructure to keep pace with market and customer needs.  Outsourcing tech support to a third party allows companies to scale up or down easily and do so without significant upfront investment.  The service provider can handle both IT workforce management as well as IT support to simplify operations.  Managed services providers (MSP) can control hiring of regular and contingency staff during periods of rapid or slow growth.

IT support providers deliver additional value to customers by increasing company focus.  Outsourcing tech support frees up limited resources (human capital, infrastructure, funds) for use on core business activities and business growth.

IT Support Levels or Tiers

Technical support can be classified into levels or tiers that characterize the complexity of support given.  Businesses may utilize more than one level of support depending on their internal and customer needs.  Some companies have as many as five to six levels of support, while others have three or fewer.  A multi-level support system is designed to address problems in the most efficient way possible, with basic queries assigned to lower tiers and advanced and complex issues escalated to the highest tier.

Tier 0 or Online Knowledge Base/Self-Service

The lowest level of support, Tier 0, is the gateway to a provider's IT support services.  Tier 0 typically refers to general information, FAQs, and responses to non-technical queries.  The script and responses are compiled in an online knowledge base that both customers and technicians can easily access.  The duration of client interaction is usually short.  Customers can access knowledge base articles, order a service, check the status of an order, check the status of a support ticket, and view notifications.  Technicians can access dashboards, analytics reports, build new services, and send notifications.  Customers and technicians can also customize the Tier 0 site. 

Tier 1/Level 1 or Front Line Service Desk

Tier 1 is the first line of technical support.  Tier 1 technicians possess general knowledge about the product or service, but may not have in-depth understanding of the system.  Tier 1 technicians usually refer to a knowledge base and basic workflows during customer interaction.  Most companies provide Tier 1 support round the clock or 24/7, with many firms outsourcing basic support offshore to reduce cost. 

Tier 1 technicians are expected to resolve majority of user issues before escalating to higher support levels.  When an issue arises, customers have the option to access Tier 1 technical support through various channels: telephone, chat, SMS, email, discussion board, social media or face-to-face contact.  The Tier 1 technician would gather customer information, identify the problem, and use a scripted workflow to attempt to resolve the issue.  If the issue cannot be resolved during the interaction, the Tier 1 technician may categorize the problem, issue a support ticket, and escalate the issue to the appropriate support level.

Tier 2 or Level 2 Technical Support

Tier 2 or Level 2 support refers to a higher level of support characterized by free-form or unscripted problem analysis, resolution and escalation.  Tier 2 specialists are more experienced (three or more years of experience) than Tier 1 specialists and have advanced certifications or pursue additional training.  Tier 2 specialist responsibilities typically include installation, diagnostic testing, parts replacements, software repair, diagnostic testing, and remote control.  Because of the greater support complexity and experience required, Tier 2 support costs more.  Some companies may provide free Tier 1 support and charge for premium Tier 2 support (in-house or outsourced) for their products. 

Tier 2 technicians have a deeper understanding of software, hardware, systems and workflows than Tier 1 specialists.  Tier 2 technicians handle a variety of technical issues regularly, making them better equipped to resolve complex issues and provide in-depth troubleshooting.  Based on information gathered by the Tier 1 specialist, the Tier 2 technician will analyze the problem, determine if it belongs under L2 domain, and categorize the issue as new or existing.  The technician then performs advanced diagnostics and data analysis.

For existing issues, the Tier 2 technician looks for a solution or workaround in the database and gives it to the customer.  If no solution can be found (as in the case of open bugs), the technician may record the issue in the bug list.  Depending on the number of incidents reported, the technician may ask the developers to fix the bug immediately.

For new issues, the Tier 2 technician will perform further analysis using diagnostic tools to determine if the problem can be resolved immediately.  The solution is then offered to the customer.  If there is no workaround for the new issue after exhausting all Tier 2 resources, the technician may escalate the problem to Tier 3 support, where the developer directly responsible for the product or service can resolve it.  Escalation to Tier 3 may also be done if the Tier 2 technician is unable to resolve the issue due to limited access.

Tier 3 or Level 3 IT Support

Tier 3 or Level 3 support is the highest support level in a three-tier technical support model.  Tier 3 support covers bug fixes, releases, new features and enhancements, and engineering.  Tier 3 technicians (also called high-end support or back-end support) are typically senior engineers or product developer with 10 or more years of experience.  They hold many advanced certifications and accreditations.  Their realm of expertise is specialized and they may serve as subject matter experts (SMEs) for a particular product or IT department.

When new, unknown or complicated issues arise, it is usually the Tier 3 specialist who is consulted and asked to troubleshoot.  Tier 3 specialists also assist Tier 1 and Tier 2 technicians and perform research and development for solutions to unknown issues.  Like Tier 2 support, Tier 3 specialists review workflows and analyze the duration of client interactions to prioritize tasks and better manage time.

Sometimes, issues are escalated to Tier 3 support because lower level support failed to discover an existing workaround.  In this case, the Tier 3 technician will work to resolve the problem immediately.  For new or unknown issues, the Tier 3 technician may resolve the problem immediately or ask for more time, in which case the customer is contacted and informed.

In extreme cases where the product or service cannot be repaired or must be replaced, the issue is sent to the original developers for in-depth analysis.  If the problem can be solved, the expert-level technicians are responsible for developing and testing several solutions, and implementing the most successful one.  Once the solution is verified, it is delivered to the customer and included in the database.  For example, Microsoft Windows developers receive support tickets from tech support staff located all over the world.  Sometimes, the problem requires deeper analysis of the operating system, and the solution is rolled out as a Windows OS update.

Tier 4 or Level 4 IT Troubleshooting and Support

Tier 4 or Level 4 technical support refers to IT support performed outside the organization.  Tier 4 tech support is less common than the three-tier support model.  Delivery is usually business to business (enterprise support) instead of business to consumer.  Companies that utilize Tier 4 support may work with multiple vendors involved in creating a product or service.

The Tier 4 specialist is usually a hardware or software engineer employed by an IT vendor.  Like Tier 3 specialists, Tier 4 engineers have several years of experience with technical support and in-depth knowledge of database systems architecture, hardware/software, networks and cloud-based technology.  They also hold many advanced industry certifications.  Many companies require their Tier 4 engineers to be proficient in development languages like Java, C++, Ruby, and others.

Tier 4 engineers fulfill many roles besides technical support, but their main focus is troubleshooting complex or difficult issues across multiple platforms.  They are responsible for developing high-level tools that analyze crash reports and logs, streamlining analytics processes, and reducing tech support time.  They examine crash dump reports, log files, and network traces for root-cause analysis and resolution. 

They also develop documentation and provide support to the IT and engineering departments.  Tier 4 engineers may work in a lab environment with similar T4 professionals assigned to an IT product or service.  In the lab, the engineers reproduce issues, isolate problems, and understand how customers use the product or device, focusing on patterns and providing feedback on areas that can be improved. 

An example of Tier 4 support is between a mobile app developer (company A) and a mobile OS vendor (company B).  Company B employs a team of Tier 4 engineers that analyze logs and troubleshoot problems with mobile operating systems (OS).  When company A (mobile app developer) encounters problems with the OS designed by company B, company A escalates a support request to company B.  The Tier 4 engineers will handle analysis, development, testing, implementation, and resolution. 


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