Q&A: Phillip Spencer, Aplus.net

• By Anastasia Tubanos, November 04, 2008

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(WEB HOST INDUSTRY REVIEW) -- When it comes to customer support, particularly in the hosting business, there has been a marked trend toward outsourcing those operations to companies and technicians abroad in places like India, the Philippines and Eastern Europe.

The stigmas that used to be associated with outsourcing - the language barrier, or business-style differences - have been generally addressed, or outweighed, and more and more IT companies in North America have moved toward an outsourced model for certain parts of their business because of the basic cost savings versus handling the services in-house.

The web hosting industry has by and large seen companies embrace the movement to outsource services, with a few exceptions, such as Go Daddy (which has been quite vocal about its decision against outsourcing) and now Aplus.net (www.aplus.net), which recently decided to stop outsourcing from Bulgaria and San Diego and consolidated 100 of its workers in its Overland Park facilities.

Aplus has seen several significant changes in the last few months including the appointment of a new CEO, Phillip Spencer, and the launch of a completely redesigned company website, as well as a new corporate logo.

In an email interview with the WHIR, Spencer discusses some of the advantages to consolidating his business and the challenges involved in making the shift.

What were you outsourcing that you decided to bring in-house?

Phillip Spencer: Customer care was the largest in-sourcing move we made. It is important to Aplus.net to provide the best customer support possible. By removing language barriers and business style differences that result with overseas support, we have created a more efficient support staff for our customers. Additional departments affected by this move include sales, development, marketing, and operations.

What drove you to make this change?

PS: Partnerships with our customers are vital to our success. The three main goals Aplus.net looks to achieve by this move are increased customer satisfaction, improvements in teamwork, and operational cost containment.

Can you discuss some of the advantages or disadvantages you have seen since making this change?

PS: One of the first changes we noticed was greater productivity and teamwork among Aplus.net employees. By consolidating the majority of Aplus.net employees in one location, communication and efficiency increased because employees are now easily accessible to each other and have built stronger working relationships.

An expected disadvantage was an increase in cost. Even though the cost of doing business in Europe has increased, moving our staff in-house has created a short-term financial hit. However, long-term forecasting shows lower churn rates and a larger customer base.

Overall, there seems to be a growing trend to outsource certain parts of the business. Your move to consolidate and bring things in-house goes against that. What are your thoughts on outsourcing versus looking after things in-house?

PS: Outsourcing provides many companies an affordable solution to help their company achieve greater returns. However, outsourcing works better in some industries than others. The web hosting industry is becoming a highly commoditized business. In order to succeed, Aplus.net has positioned itself as an online business partner to our customers.

This means providing higher levels of customer service and support. By keeping this in-house we believe our customers are happier and our employees are more productive. Before a company makes the decision to in-source or outsource they must perform a cost-benefit analysis to determine the best solution for their company.

What are some suggestions you could offer other companies looking to switch to an in-sourcing model?

PS: There are a couple of things to be prepared for if your company is considering in-sourcing. First, plan to take a short-term financial hit. However, in the long run, this move will pay off through increased customer retention.

Second, you must realize that this is not an easy process. Plan to spend the majority of your time planning and creating a defined timeline before any execution takes place. Finally, communication is the key in helping all stakeholders understand the end goal and how they can help achieve it. Since in-sourcing, we have received a lot of positive feedback from our customers.

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