Academic journal article Competition Forum

Measuring Service Quality in Egyptian Service Outsourcing Provider Companies

Academic journal article Competition Forum

Measuring Service Quality in Egyptian Service Outsourcing Provider Companies

Article excerpt


Outsourcing is one of the fastest spreading forms of international trade in a globalization era. It is characterized by exponential growth in the rate of absorbing and mastering new technology and considered a catalyst to ignite worldwide economic welfare. Outsourcing is the process of subcontracting to a specialized supplier a non-core activity that used to be conducted in house and free resources for profit generating activities.

While the increasing pressure to cut cost is still among the primary drivers for this trend, today quality has become a major issue when it comes to choosing an outsourcing partner. As established outsourcing providers are besieged by new entrants from other low-cost countries, new sources of service differentiation become crucial to maintain the loyalty of existing customers and attract new ones. There has been a shiftfrom the low-cost factor to a focus on continual improvement. The cost factor alone has been a risky strategy. Customers are no longer looking for lowest cost but rather a combination of cost, quality, and long-term relationship.

This shifthas urged outsourcing providers to adopt an uncompromising approach towards quality to earn customer loyalty by providing services that are of the highest quality and greatest value. Today, quality is more than just complying with the requirement of established standards. Quality, particularly in a highly competitive environment, is more about cost-effectiveness, carefully reviewing failure modes at every state and, more importantly, planning to prevent such failures. Quality is a journey without a finish line. Performance and quality levels of most processes have the tendency to decrease over time unless forces are exerted to maintain them. To guarantee its sustained existence in the global market, outsourcing providers shifttheir focus from low cost factors to improved quality focus.

Importance of the Research

The importance of this study is basically derived from the importance of the outsourcing process itself as an innovative form of foreign investments. This necessitates studying outsourcing as a potential trend of international trade. Service quality became a vital prerequisite of successful outsourcing process, which is why measuring service quality is important as a driving force of attractiveness and competitiveness of Egyptian outsourcing service provider companies.

Research Aim

This study aims at giving insight into service quality measures of outsourcing provider companies in Egypt and to show how Egypt is to be considered a competitive outsourcing hub attracting more outsourcing contracts.

Research Objective

This study targets the gap between the expected level of quality perceived by the outsourcing client and the actual offered one from the service provider through five-quality dimensions SERVQUAL model.

Research Question

This study approaches the answer of a main question: Whether Egyptian outsourcing providers offer high quality services that satisfy their contracting clients?

This main question can be answered through discussing the following sub questions:

* What is outsourcing as a form of international trade?

* What is outsourcing market overview in Egypt?

* How is service quality an important determinant of attracting outsourcing?

* How to measure service quality in the outsourcing provider companies?

* How can an improved service quality enhance Egyptian outsourcing industry competitiveness?


The literature review of this study is based on a conceptual framework that is disaggregated into three groups. The first group gives a general overview of what is meant by outsourcing, its types, drivers, and main functions as illustrated by previous literature, such as Amiti and Wei (2004), Hummels et al. (2001) and Sykes (2004). The second group defines quality and the importance of service quality in raising outsourcing service provider companies' competitiveness. …

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