Forgot your password?
typodupeerror

The Hidden Cost of Outsourcing 275

Posted by ScuttleMonkey
from the good-customer-service-trumps-all dept.
Alien54 writes to tell us CNNMoney is reporting that outsourcing may not be as big of a bargain as some might think. From the article: "With consumers enjoying more choice than ever before, evidence is growing that great service is essential for long-term customer retention. To cite just one example, a recent survey of pension policyholders in the United Kingdom found that 75 percent would leave their current provider if they experienced bad customer service."
This discussion has been archived. No new comments can be posted.

The Hidden Cost of Outsourcing

Comments Filter:
  • Dollar is king (Score:4, Insightful)

    by ArcherB (796902) on Saturday March 04, 2006 @10:52AM (#14849784) Journal
    To cite just one example, a recent survey of pension policyholders in the United Kingdom found that 75 percent would leave their current provider if they experienced bad customer service."

    If this were true, Dell would not be the number one mfg of computers after losing 75% of their base. How many people here have called tech support and gotten someone with a thick Indian accent named "Steve"?

    The problem (if you can call it that) is that Dell offers decent CPU's for cheap. Rather it be for the home or business, people are more willing to take the chance on a computer that's $200 than their competitors.

    • Re:Dollar is king (Score:2, Insightful)

      by Zephiria (941257)
      Actually at the shop i work in we see more dell's then anything else, so it's quite obvious that people rather buy from dell and get it fixed by us.
      • Guess the figures are right ...

        75 percent would leave their current provider if they experienced bad customer service

        In other words, 25% will put up with all sorts of sh*t. Sounds like Dell's market to me.

      • by SmallFurryCreature (593017) on Saturday March 04, 2006 @11:50AM (#14849958) Journal
        It means they bought a Dell, expected it to either to just work or be fixed by Dell, were disappointed and were then forced to go to a local shop to get the support they thought they would get from Dell.

        But since this is nothing new and Dell continues to sell it also means that either this does't happen to a lot of people or people just don't learn.

        I buy from local shops and NEVER call in with a problem. I put the defective product on the counter on a shopping day (thursday evening or a saturday) and speak loudly about how I want it repaired or replaced. Works wonders. Over a phone they can and will try to tell you that a brand new HD is supposes to show badblocks or that a single wrong pixel in a lcd is acceptable. It is offcourse. If your stupid.

        • by Zakabog (603757)
          I buy from local shops and NEVER call in with a problem. I put the defective product on the counter on a shopping day (thursday evening or a saturday) and speak loudly about how I want it repaired or replaced. Works wonders.

          So what you're saying is that your local shop sucks, and the only way they'll fix anything is if you embarass them in front of other customers? Have you considered another shop?
    • Re:Dollar is king (Score:5, Informative)

      by twiddlingbits (707452) on Saturday March 04, 2006 @11:16AM (#14849874)
      You obviously have not been paying attention. Dell caught hell for lousy customer service outsourcing to India, and they saw repeat Sales drop. They have since moved a lot of the call centers back to the USA. If you want CHEAP go with Dell, but if you are a business beware the consequences. If you want ultra-reliable machines with enterprise level features then you need Sun or IBM servers, or the DL series from HP.

      India is a great place for development,as they have very skilled programmers for cheap wages and "tech speak" has less problems with the language barriers than customer service.
      • Re:Dollar is king (Score:2, Informative)

        by Anonymous Coward
        you're kidding, right?
        everything we've outsourced to india has been slower to develop, buggier, and come with more absolute incomprehensibility of design than anything I've ever seen.
        The tech centers we've got over there are so slow as to require us to go back and do the work we would have done anyway, but now two weeks late, plus we have to clean up the mess that was left before. the "skills" we see come out of that area tend to be the skills of someone who spent years reading tech manuals and has no idea
        • Re:Dollar is king (Score:5, Insightful)

          by RevMike (632002) <revMike@gmail . c om> on Saturday March 04, 2006 @12:28PM (#14850091) Journal

          you're kidding, right?

          everything we've outsourced to india has been slower to develop, buggier, and come with more absolute incomprehensibility of design than anything I've ever seen.

          I've seen it both ways. When companies off-shore and go for the cheapest bid, they have the same poor experience as when they hire the cheapest on-shore consultants.

          The bottom-of-the-barrel firms offer cheap rates because they pay poorly. Since they pay poorly anyone with a little talent leaves as soon as they have enough experience to get a better job. The only people that stay in these jobs are incompetents.

          Plenty of off-shore providers pay well enough to attract high quality talent, and so are able to provide high quality services.

          The next time some manager wants to hire an off-shore provider, make sure they understand this and get them to hire a $40/hr firm rather than a $20/hr firm. They'll still save money over the $80+/hr that it will cost them on-shore, and they'll get a skilled workforce.

          Your experiences with India have been because of your own company's poor decisions or lack of due diligence. Brown people are just as capable as white people.

          • by typical (886006)
            India is seeing something like what we did during about 2000. They are seeing an extremely rapid influx of money into IT, and phenomenal growth in that job market.

            Not surprisingly, this is having exactly the same effect as it did in the United States during the .com boom -- lots and lots of people who absolutely should not have been hired to do what they are doing are working in the area, and there is a large chunk of the market that is unskilled. Remember all the horrible, awful, terrible websites made b
    • Right, and since I personally have never had a problem with Dell's service (they show up at my door to fix what is wrong in less than 24 hrs) then I keep doing business with them. The day they change, is the day I change.

      I dropped Earthlink for that very reason. No viable English technical skills, coupled with constantly different answers, plus a total disinterest in EVER getting a known problem fixed, caused me to dump Earthlink as my DSL provider.

      They probably do not know why, either.
    • Re:Dollar is king (Score:4, Interesting)

      by mesocyclone (80188) on Saturday March 04, 2006 @01:41PM (#14850385) Homepage Journal
      When I saw the article the first company to come to mind was Dell. I have had terrible experience with their customer service. A typical problem requires waiting on a succession of customer "service" agents, all the while listening to a recording telling me how important I am to Dell.

      Yeah, right.

      I have gone through this process only to have an agent hang up one me, leaving me to start over.

      One time the agent was downright rude a number of times, finally putting me on hold for 20 minutes and then disconnecting. The total call time just with that agent was about 2 hours.

      I have gone through tiers of agents only to be told I would have to pay a bunch of bucks (I was trying to get new copies of the original re-install disks). I tried again, went through more hours and tiers of agents, and got the disks free.

      I called to extend my warranty. After a long time, I was told that I couldn't. I tried again, different agent, and was able to extend it.

      In fairness, though, the people who finally solved my problems were usually in outsource centers in India or the Phillipines.

      Dell's problem goes way beyond outsourcing. They have too many tiers of agents, in too many different groups, with too many who can do nothing but follow scripts. They are, in other words, simply clueless about how to do customer service.

      Of course, if the Dell products I have had were more reliable, the issue of their customer service would be moot.

      I have been a Dell customer for a long time (almost a decade). Only recently have they provided such horrible customer service.

      Next time I need a laptop, I'm going to try to find someone who is clueful about after-sales service.

      I certainly hope that somebody with some power at Dell stumbles across this threat. And cares!

      • Of course, if the Dell products I have had were more reliable, the issue of their customer service would be moot.

        I have been a Dell customer for a long time (almost a decade). Only recently have they provided such horrible customer service.

        There seems to be a controdiction here. If you've had so much trouble with unreliable Dell products, why have you kept buying from them long enough to see the difference in their customer service?

    • i have never gotten anyone other than a native english speaker with dell. now microsoft, cingular and a few others...
      • i have never gotten anyone other than a native english speaker with dell

        Are you kidding?!?!

        Last time I talked to Dell support, the person on the other end was totally incomprehensible. After many repeated attempts we simply failed to communicate. I think he was from Tennessee or Kentucky.

  • by Lemmy Caution (8378) on Saturday March 04, 2006 @10:57AM (#14849797) Homepage
    The article is terse, inapplicable to those many markets which are almost entirely price-sensitive, and ill-supported. Pension policies don't really compete on price; they are about service and ROI.

    And people often say that they will take their business elsewhere, but then stick to the cheapest vendor when push comes to shove. Self-report is not the best indicator of actual behaviour, especially for a hypothetical.
    • And people often say that they will take their business elsewhere, but then stick to the cheapest vendor when push comes to shove. Self-report is not the best indicator of actual behaviour, especially for a hypothetical.

      I agree and disagree. Your point's on, but when I'm looking for something to buy, I restrict my search for the best price on an item to very reputable vendors, not the large majority of vendors who are getting consistently crappy ratings at pricewatch or resellerratings. Why? Because if the
    • I was going to say that, but you said it so much better. Thanks!
    • Exactly.

      evidence is growing that great service is essential for long-term customer retention

      And, for most consumer driven business, long-term customer retention is not even part of the equation. Many companies exist solely to make a quick profit, and have their assets consumed by some other company with similar goals. There's no point in cultivating long term customers for a disposable product line.

  • by Anonymous Coward on Saturday March 04, 2006 @10:57AM (#14849798)
    What's a pension?
  • IP? (Score:4, Insightful)

    by cyberkahn (398201) on Saturday March 04, 2006 @10:57AM (#14849800) Homepage
    How about intellectual property? Spend millions of dollars in the U.S. on research and development and then outsource the manufacturing to China and then wonder why the Chinese develop a very similar product. Duh!
    • by Anonymous Coward
      Clearly you don't have any experience of the postgraduate environment in our universities. Half of the brightest students are Chinese, and they take their doctorates and fantastic brains home with them.

      They don't need our or anyone else's stinking IP. You've been reading too much western propaganda.

      And by the way, "Intellectual Property" is a term created by lawyers for the purpose of getting the different issues all mixed up so that they can profit from "expertly" separating them again. Don't fall for i
      • by blincoln (592401) on Saturday March 04, 2006 @03:02PM (#14850647) Homepage Journal
        They don't need our or anyone else's stinking IP. You've been reading too much western propaganda.

        Mmm... no. Sorry.

        There are a lot of bright people in China, but there are also a lot of companies out to swipe IP from other countries. The most recent example I've read about is a whole segment of the auto industry over there devoted to copying the designs of companies like Honda and Mercedes.

        One of them even stole their *symbol* from Audi, which they slapped on a copy of another manufacturer's car. I thought that one was particularly funny - it reminded me of the bootleg Versace/Universal Studios "dual logo" t-shirts in Kamikaze Girls.
  • I remember a few years ago around 2003/2004 reading article after article that IT in USA is finished all the jobs will go to India, CHina and other. But here we are few years later and the IT job market is pretty good, atleast I think so. Its probably still tougher for somebody with no expierence than it was around 1999/2000. But I am no longer afraid I won't have a job in the IT sector... atleast under current conditions.
    • I remember a few years ago around 2003/2004 reading article after article that IT in USA is finished all the jobs will go to India, CHina and other. But here we are few years later and the IT job market is pretty good, atleast I think so. Its probably still tougher for somebody with no expierence than it was around 1999/2000. But I am no longer afraid I won't have a job in the IT sector... atleast under current conditions.

      And I bet that the minute that IT people have internalized that fact the current wav

    • You can improve your chances of getting a good, high-paying, and interesting job in the technology and IT sectors by learning to use a spell checker.

          Try practicing with it on your resume first. Having misspelled words on a resume is the fastest way to a long career in the fast-food customer service industry regardless of your college degree.
  • Broken Connection (Score:5, Insightful)

    by camcorder (759720) on Saturday March 04, 2006 @10:59AM (#14849810)
    Outsourcing does not mean, bad service. It's about getting a service from abroad with most probably lower costs. It's evident that same quality of service taken from India, or China is a lot cheaper than the one taken from US or some other European countries. Companies should be more selective on outsourcing, then they won't lose customer due to bad service, but in no way there's a direct connection with outsourcing and bad service.
    • by replicant108 (690832) on Saturday March 04, 2006 @11:10AM (#14849849) Journal
      no way there's a direct connection with outsourcing and bad service

      Have you ever dealt with a customer service centre which has been outsourced to India?

      Even if you argue that popular opinion is 'wrong' on this issue, you must accept that when it comes to customer service, it is the perception that counts.

      • Have you ever dealt with a customer service centre which has been outsourced to India?

        Yes, and just because the work has been moved to India does not mean the work is done poorly. The major disadvantage to outsourcing to a foreign country comes from language/accent/communication issues. I have definitely had times where I had trouble communicating with a person in customer service because of that. However, if that hurdle can be overcome through education or through selectively hiring foreigners who have mad
        • by blincoln (592401) on Saturday March 04, 2006 @03:04PM (#14850655) Homepage Journal
          Support lines can be open 24/7 rather than the standard 9am-5pm Mon-Fri.

          As hard as it may be to imagine, a long time ago American corporations actually valued their customers enough to pay for call centers in the US to be staffed around the clock.
        • In my experience the biggest problem dealing with customer support centres in India is the poor connection. There is often a second or two of latency, and the sound quality is very low (I believe most use VoIP with no QoS between their call centre and a switching point near here to keep costs down). The competence of the person at the far end is usually about as low as someone in a more local call centre, but the significantly reduced call quality makes things very difficult.
    • by ArcherB (796902)
      An excellent point. Outsourcing != bad.
      Oursourcing does not neccessarily mean overseas either. I worked for an outsource company here in the US. We provided technical support and customer service for a wide variety of companies, many who were not large enough to have their own call centers, or who did not recieve enough calls to need one. We supported notebooks from four different companies. The knowledge we received from one notebook manufacturer would bleed over to the others. This worked for the th
    • Yes, outsourcing (to anywhere, locally or internationally) does result in poorer service. Why? Because someone who is not employed by you has less interest in the success of your company.
      • by Anonymous Coward
        Yes, outsourcing (to anywhere, locally or internationally) does result in poorer service. Why? Because someone who is not employed by you has less interest in the success of your company.

        Since the success of THEIR company depends on the quality of their services, how can that possibly make any sense?

        We outsource our office cleaning. If we're not happy with the service then we switch supplier. How does whether the cleaners care about the success of OUR company come into it? It's their jobs that are on the li
        • Since the success of THEIR company depends on the quality of their services, how can that possibly make any sense?

          Because once you're under contract, the goal is to fulfill the contract, not to do the best job.

          We outsource our office cleaning. If we're not happy with the service then we switch supplier. How does whether the cleaners care about the success of OUR company come into it? It's their jobs that are on the line if they don't perform.

          You're using an example that doesn't really matter to t
        • "Since the success of THEIR company depends on the quality of their services, how can that possibly make any sense?"

          Outsourcing customer service has conflicting incentives which often make it to the advantage of the vendor to provide sub-par service.

          For example, some vendors providing the customer service are paid per call. So the service reps don't properly solve your problem on the first call, forcing you to call again. Bad service, but they get paid more. Maybe they'll lose some clients in the long ru
      • I don't think this applies universally. I have had very good customer service relationships with Indian outsourcers and I think part of it is cultural (in general respect and diligence are faded values in the US, while elsewhere they are only fading) and part of it may be that many of the people being employed in India do not care so much about the success of their company, but that simply for financial reasons and uncertainty about the job market, care about keeping their job.
    • in no way there's a direct connection with outsourcing and bad service.
      It's just coincidence that Lloyds-TSB's phone banking has recently become utter shite, then.
    • by EnronHaliburton2004 (815366) * on Saturday March 04, 2006 @01:28PM (#14850334) Homepage Journal
      It's about getting a service from abroad with most probably lower costs.

      Some costs like labor & rent may be lower. Other costs, such as communication, are much higher.

      It is hard enough for manager to communicate their technical needs to a technical staff when they are sitting in the same room, working on the same whiteboard, with the same set of requirements in front of them. This same process becomes much more difficult when you are dealing with staff who speak a different language, work in a different timezone, who have different coding standards and who can only communicate over the phone or some kludgy computer tools.

      There are too many companies today who think you can treat the employees (including managers) as a unit of business logic-- they think you can assign task X to any person who fits the "job category", and they can get the job done. This is usually the result of an manager who does not understand the details in the project-- The devil is always in the details.

      I've known several dozen large projects where the technical staff was in Europe, Australia, India or some other country; and the managing staff was in the US--- only 1-2 of those those projects suceeded. The rest usually died a slow lingering death. The costs looked good up front, but that's because they managers underestimated all of the inefficiencies in the outsourcing.
      • by jadavis (473492)
        Some outsourcing is very economically efficient. Some outsourcing is inefficient. The inefficient firms will die*, and the efficient firms will prosper.

        It's called global trade. Just like people have to decide whether 1000 bananas are worth 50 truck tires (often through a lot of indirect trading), people have to decide what functions are more efficiently performed in another country.

        There's a lot of outsourcing and a lot of insourcing in the United States. And that's good, because that means that both insou
        • Where do you think your "Japanese" or "Korean" car is made? There's a good chance it's made in the U.S.

          Excellent statement. I've been saying this for years... I can buy a Ford, which is manufacured from components from the US, Mexico, Japan & Korea; or I can buy a Toyota, which is *also* made from the same countries.
          • by Bozdune (68800)
            Yes, but your CAPITAL is going to Japanese fat cats, not to American fat cats and the UAW. That's a Bad Thing, apparently. I've never been entirely sure why, perhaps some economics major can weigh in and explain it to me.

            Love your ID, by the way. Lost money on one, made it on the other.
            • That's a Bad Thing, apparently. I've never been entirely sure why, perhaps some economics major can weigh in and explain it to me.

              Because it's all about being patriotic instead of insisting on a good product that won't die before 100k miles.

    • Sure it does. I work for a company (who everyone of you know and have heard of) who does all their level 1 and 2 technical support through an outsourcer. I would honestly say that the biggest hurdle in our organization to providing good support is the company we outsource to. Why?

      Mostly because they seem to have their own interests at heart. They've shortened training, they pay people like 8.50 starting wage, and their attrition rate is way over 200%. Its kinda depressing - as soon as they get someone good
      • Thanx for the pointer to the report on MSN "support." As a former Tier II agent at an ISP that didn't have a Tier III, much of that rings true for my company as well. (I was laid off when the call center was outsourced overseas.)

        However, there are a few differences. First, Tier I didn't have to get Tier II's permission to escallate; at most, a new tech might have to check with his lead. They simply transfer the call to the Tier II queue and go on with their next call. Second, if you asked for a superv

  • by xxxJonBoyxxx (565205) on Saturday March 04, 2006 @10:59AM (#14849813)
    "...evidence is growing that great service is essential for long-term customer retention..."

    The author is thirty years behind if this the first time he's run across this idea. There have been shitloads of studies done over and over again that show that most (i.e., >50%) people leave/switch because of shitty service from their existing supplier/provider/brand/etc.

    • Of course, when people switch providers, they will switch to the lowest-cost (or greatest price-feature) provider, not the one with the best quality of service.

      And to be frank, in most areas I'm quite willing to forgoe service for price. Even the best service policies are generally too restrictive and inconvenient to be worth it. If it's cheap enough I can have a third party repair it (or have a backup plan if it's a service-only thing), or just replace as needed and it will still end up being cheaper and l
      • by xxxJonBoyxxx (565205) on Saturday March 04, 2006 @11:33AM (#14849917)
        "...when people switch providers, they will switch to the lowest-cost (or greatest price-feature) provider, not the one with the best quality of service."

        Often this is not the case. As a part-time marketeer, I can tell you that often what I do to lure customers away from my competition is:
        1) "educate" my target segment to expect a higher level of service (change their expectations)
        2) tell my competitor's customers that my competitor does not offer that higher level of service (given the new expectations, make them feel unhappy with their current provider)
        3) make damn sure my own company offers the higher level of service when my competitor's now-unhappy customers go looking
        4) don't compete on price; higher service can demand equal or higher price
        5) repeat as necessary

        Believe me - I'm not the only out there doing this either.

        • by twitter (104583) on Saturday March 04, 2006 @01:11PM (#14850265) Homepage Journal
          what I do to lure customers away from my competition is: 1) "educate" my target segment to expect a higher level of service (change their expectations) 2) tell my competitor's customers that my competitor does not offer that higher level of service (given the new expectations, make them feel unhappy with their current provider) 3) make damn sure my own company offers the higher level of service when my competitor's now-unhappy customers go looking

          #2 and #3 are flawed. In practice, #2 is often false or provided by sabotage. As a salesman you really have no control of #3 and may be as duped as your customers.

          Cingular's "Raising the bar" is a great example. Instead of building out their network, they are spending money on exclusive phone deals and billboards. The purpose of those billboards is to expect a fictional level of service and simply say, without proof, that theirs is better. Having had Cingular and Sprint, I can say their promise is bogus where I live and I enjoy better service than Verizon and other incumbent subscribing friends do. "Education" has to be built on fact.

      • Of course, when people switch providers, they will switch to the lowest-cost (or greatest price-feature) provider, not the one with the best quality of service.

        If that was true Speakeasy.net wouldn't be around. Their success disproves your point.
  • So... (Score:5, Insightful)

    by Anonymous Coward on Saturday March 04, 2006 @10:59AM (#14849814)
    It's a good thing that inhouse customer service can't be terrible!

    Seriously, this just means that you have to be careful who it is who provides your outsourced service just like you'd have to be careful who it is who provides your inhouse services. The big difference is that outsourced service contracts are generally easier, quicker and cheaper to terminate and replace if they're don't meet the agreed standard.
  • by CMiYC (6473) on Saturday March 04, 2006 @10:59AM (#14849815) Homepage
    "a recent survey of pension policyholders in the United Kingdom found that 75 percent would leave their current provider if they experienced bad customer service."

    People say they will take action all the time. How many actually do? Well they do take action. They tell all their friends how shitty "the company" treated them. They go into detail about how "the company" doesn't care. And then next money they send "the company" a check for the bill.

    Replace "the company" with practically any business name.
    • I do, and I tell all my friends and aquaintances about the crappy service I received from Conglomo.

      Don't underestimate the effect of a pissed-off customer. I'll never buy anything from GEICO due to the shabby and dishonest way they treated my Mother after she was injured in an automobile accident.

      I dumped my bank of 15+ years after they screwed up my accounts.

    • People say they will take action all the time. How many actually do?

      I'm currently avoiding Sony products (due to 'rootkit' discussed ad nauseum in Slashdot). Just bought an LCD TV - didn't even look at Sony. I wouldn't buy anything from SCO either - assuming that I actually wanted anything they produced.
  • by cryfreedomlove (929828) on Saturday March 04, 2006 @11:00AM (#14849816)
    This article is evidence that its best to let free markets decide the value of things such as out sourcing. So long as consumers have choices, they'll be free to make choices based on what they value. In this case, people don't like the out sourced solution and they are moving to the competitors product.

    This is all a lot more neat, clean, and effective than a heavy handed reponse from a clumsy government. Consumers always win when they have an array of free and voluntary choices.
  • More than that.... (Score:2, Interesting)

    by RabidAmerican (863381)
    Most people resent having been sold a product/service and find out that their most personal details are in the hands of a company that exists in a country that does little to recognize privacy laws of the originating nation. Yes, there is a problem in the U.S. but it is being pursued daily to tighten the laws at hand.

    Additionally, getting a "script monkey" on the support-line does an unbelievable amount of damage to customer confidence in the company in question. Knowing that you will have to endure the
  • by WebHostingGuy (825421) * on Saturday March 04, 2006 @11:08AM (#14849842) Homepage Journal
    From the article "A 2005 Gartner study predicts"

    Okay, I understand Slashdot seeks subjects which spur debate but this one is on the edge. First this is a study which is "predicting." That's the first clue that something is wrong about this, you can make stastics say anything you want. But the real problem here is that they automatically assume that outsourcing will result in a bad experience. Who says? You can have a bad experience with a customer service person (who is American) and just doesn't give a damn. There is no golden rule that the people working for you have any more motivation to help you than an outsourced worker. The article quotes human nature as why they won't identify with the organization...bull. This is nothing but a hyper-general statement to support their conclusions. (Aside from the words likely to, tend to, which are all assumptions.)

    The real problem is not that there are companies which are outsourcing -- it is that companies are not caring whether the service rendered is good enough to begin with. If you set a level of expectation for anyone working on your behalf and follow through to ensure that level is being reached it won't matter whether you have employees working at home, in the office or in another country. Far too many companies simply outsource and say do it without monitoring the level of communications to make sure they are doing it right. Saying that outsourcing will automatically cause problems is just an over generalized conclusion.

    The one point they did get right though is that it is silly just to compete on price alone. That is actually true, however, they are trying to make this point by generalizing on something which may or may not be true and by missing the real point of customer service.
  • Slightly OT (Score:3, Informative)

    by kortex (590172) on Saturday March 04, 2006 @11:09AM (#14849843)
    "evidence is growing that great service is essential for long-term customer retention."

    To me this is a remarkable indicator of the high cluelessness level of a very large number of businesses. This is such a basic truth, it's like "Please open mouth to breathe".

    Happy Customers/Happy Employees can make a successful business even if the product is just 'adequate'. People resist change more when they are happy than not. F---ing duh.
  • by AnotherDaveB (912424) on Saturday March 04, 2006 @11:12AM (#14849855)

    From the article, "you'll soon figure out that competing solely on price is a fool's game"

    Quote below taken from DNUK's website [dnuk.com]

    The DNUK Advantage

    • We currently offer all the major GNU/Linux distributions on our systems; including Debian, Fedora, Mandrake, Red Hat, Slackware, SuSE and White Box
    • Unlike other system builders we offer all GNU/Linux distributions at no charge with our systems and we also sell the retail boxed products as an option
    • We can offer a degree of customisation for our customers that the large OEMs simply cannot match
    • We pride ourselves on our customer support - all our technicians are experienced with GNU/Linux support
    • Customers can communicate directly with the very same technicians that built their systems
    • We do not use offshore support departments in India!
    • We do not use offshore support departments in India!

      I would so like a technical support engineer in India who isn't trying to imitate a US accent. My problem isn't with the Indian accent, it is with the US/British accents that they try to imitate.
  • Capative Audience... (Score:3, Interesting)

    by creimer (824291) on Saturday March 04, 2006 @11:15AM (#14849865) Homepage
    ... found that 75 percent would leave their current provider if they experienced bad customer service ...

    I keep thinking about that whenever one of my witty, insightful and intelligent comment is modded down by some idiot moderator on Slashdot. Why do I keep coming back to same abuse day in and day out? I really need to go somewhere else.
  • by gregor-e (136142) on Saturday March 04, 2006 @11:21AM (#14849886) Homepage
    There are other hidden costs to offshoring deriving from cultural differences and communication problems. I was involved with three software development projects that had been outsourced to three different firms in India. In only one case was there a marginal win, despite net billing rates that were perhaps half of what we would have paid for domestic IT talent. Much of the cost overruns arose from miscommunication backed by a desire on their part to not appear incompetent. The engineers would come here for several weeks to gain understanding before returning to India to work on the project. Despite this, I found out there were fundamental knowledge gaps that should have been cleared up in the first day, let alone two weeks after they had returned to India (and billed us for two weeks of apparent head-scratching). In my opinion, the only way to make technical offshoring work is to make it onshoring, by opening a local office in the country where the talent lives. I doubt there is a similar solution for offshoring customer support.
    • It's probably not a stretch to say that the more you bring a project in-house, the more profit you stand to gain. The people benefitting most from the current world regime are the ones who have the most value owned, that is to say, maufacturing, labor costs, distribution all under their control. Oil, automation, media...what monopolist has ever argued that giving up control leads to profit? None of them ever have.

      If you're a small businessman, the key to profit is enhancing ownership. If that's a superm
  • by i_want_you_to_throw_ (559379) on Saturday March 04, 2006 @11:33AM (#14849915) Homepage Journal
    When you call JetBlue airlines and talk to one of their reservations agents, you talking to someone sitting in their home. ALL of their reservations agents are home based. They get away with cheaper labor and a happier workforce.

    Not that there's anything wrong with Indian call centers but half the time I can't get past the Indian accent to understand what the hell is being said. There is a limited amount of things they can do as well and to say that Indian call centers provide "customer service" would be an overstatement.

    When you call a company for customer service you should be able to get someone able to bend the rules if circumstances warrant. The "paid parrots" of Indian call centers can't do that.
  • by saskboy (600063) on Saturday March 04, 2006 @11:51AM (#14849964) Homepage Journal
    Oh Slashdot, why are you being so left wing?
    http://politics.slashdot.org/article.pl?sid=06/03/ 03/1712242&threshold=0 [slashdot.org]

    Just yesterday the President [God be upon him] was telling us that Outsourcing is GOOD for the American workforce. Please don't contradict what the President [God be upon him] says!

    Yes I'm being sarcastic, thank you for noticing.
  • by GuyFawkes (729054) on Saturday March 04, 2006 @11:57AM (#14849981) Homepage Journal
    This is the thing nobody apparently gets.

    It is an utter waste of time to study scenarios where customer orders product and pays for it, vendor ships product, customer receives product, end of story.

    The _important_ metric is always the worst case scenario where the customer ends up falling in between the cracks in between different departments within a large organisation, nobody the customer contacts has responsobility, nobody has authority, nobody has motivation, nobody has their ass on the line if it escalates.

    Anyone can sell acreage on the moon, you judge a company or business by how badly its worst mistakes fuck customers over, and you place the responsobility for that exactly where it belongs, on the directors conference table, and let it run down right through the company.

    The reality is the bigger the company the more likely its reaction to a fuck-up being escalated through inaction is to undulge in ever more psychopathic behaviour.
    • I couldn't disagree with you more. Just like people, companies need to focus on what they did right. If I'm getting 999 out of 1,000 orders right, I'd be foolish to focus on that 1 order. I need to focus on continuing that level and seeing how I can raise it to 9,999 out of 10,000.

      Exceptions simply need to be treated as exceptions - just like you have exception handling in software applications. You simply set-up a special process to handle the 1 out of 1,000. Then, you take a look at how your general pr

  • Just a thought (Score:4, Interesting)

    by Anonymous Coward on Saturday March 04, 2006 @12:17PM (#14850053)
    Okay first the disclaimer:
    I'm currently working as a Customer Support in a local company in Malaysia where we help our client's client (mostly from the US and UK) troubleshooting their generic computing problems over the telephone.

    Anyway, I've been working for a almost a year now and from what I've seen, the company I worked for has been recruting really skillful/talented people (most of them have CS degrees from Australia) to do the support.

    However as you may know, most of these people speaks really poor, non-standard English. To make the matter worse, most of them (including me) have problems with our clients' American/English accent. Personally I'm sad that I've had clients that hanged up on me because they couldn't understand me in some occasions.

    Okay so now, I would like some opinions from my fellow /.ers on this (maybe I should be submitting this to Ask /.) Is the quality of the outsourced job really terrible?
  • I can't speak to Outsourcing in general but I recently posted this in my journal it seems especially apropos in the light of Outsourcing and Offshoring software. I think it cuts both ways and really you should look for talent no matter where you are looking for people:

    Unfortunately, with code, it takes the test of time and change to tell if a programmer is a truly talented one or just capable of writing volumes of drek that holds together. The audience that can read code is small and those qualified to
  • by andr0meda (167375) on Saturday March 04, 2006 @12:45PM (#14850167) Homepage Journal

    Well, here's a true story. A DG (I will not mention which DG) of the European Union has outsourced it's software system that is responsible for the registration and follow-up of requests that basically seek funding of the EU government. That same project is running on it's last legs. The reason is quite simple.

    After version 4 and 5, which worked but were not 'modern' enough (not using EJB's in a J2EE server) version 6 was outsourced, and contractor architects designed a J2EE application that should bring the next installment of the software which was untill then running just fine. The rules were a little more complex than before, and some political choices undoubtedly had their effect on the overall design of the system, but so far so good. Of course, the EU is a 'fair' institution, meaning that everybody should be allowed to bid on a contract that allowed the contractor firm to (and here it went terribly wrong) design and implement of a subsection of tha entire application. Ok, ok, not the best solution in the world, and you know, maybe this would have worked if the staff (of which most of them serve lifteme sentences):

    - had at least been knowledgeable of J2EE
    - had reduced the complexity induced by splitting the application
    - if the number of contractors involved in the project would be limited.
    - if each project would have had a propper code-review follow-up and an architecture steering group that had an overarching view on the system
    - if testing frameworks had been used to test the software
    - if project leads would not have been pushed around like toypuppets, from 'dev' to 'organisation', from 'infrastructure' to 'dev'
    - if projects themselves would not have been pushed around. Basically they were extremely good in killing all forms of know-how about their own system. Hand-overs were cabinets full of stacks of paper that nobody reads or cares about.

    None of these things were there. Can you imagine the mess they are in? I guess you need a little help, let me refresh what can go wrong: XML stored in relational databases, CMP and XA transaction management all over the place, code that is oblivious to memory and performance consumption, timeout periods that allow sessions to continue to run 3000 seconds, and worst of all, session security is only invoked 'once every n times', and n varies per subsection between 5 and 500. (luckily the application runs within a secured domain, but still.) Some modules implemented their own database operations when the responsibility for the tables they access belongs to other modules. Security is implemented in 3 different ways, and doesn't even have roles and users, like every other security has. Code-reviews are dangerous for your health. Tables are being updated by hand, XML's are being edited by the helpdesk by hand, and 'development' people are filling in forms because the users are unable to, while at the same time they are debugging the database because parts of it have been corrupted.. The whole server system has to be restarted each morning, and around noon at exactly 12.19, 'something' brings the servers to the point where none of the applications respond in a timely fashion. I spell it like d.i.s.a.s.t.e.r.

    But there's another surprise.. the new next version 7 is due by the end of the year. And that has been decided politcally. I don't think I have ever seen a bigger mess than this one.

    I worked there briefly as a contractual agent trying to clean up parts of the mess and bring rather basic things like source-control under their attention. All events, persons and organisations in this text are pure fictional and do not adhere to reality. They really don't!

  • by Magnus Pym (237274) on Saturday March 04, 2006 @01:05PM (#14850240)
    In the boston area, software salaries have been effectively capped. In the company where I work currently (which I shall be leaving soon), a raise that accompanies an excellent review is less than 3%. Complaints are met with the following justification: "You are getting paid about 10 times what someone from India gets for doing the same work. We cannot justify higher raises to the board/investors".

    I recently found out that the following policy has been instituted. If an employee gets an offer from another company at a much higher salary, make no attempt to match the salary, just let him/her go. Hire someone else, if necessary at the higher salary. But do not give a big raise to any existing employee!

    Unfortunately, this situation seems to be more and more prevalent, my friends who work in other companies have reported similar policies being instituted. I don't know where all this is going to end up.

    Magnus.
    • by Anonymous Coward
      if the company has to rehire someone with a higher salery... the company is also going to have to play for the recruiting and training -- if I'm not mistaken these are very expensive costs; last time I heard arround $10-15k.... Also, the "downtime" where there is no employee could cost the company $$$$$$. Not very good business decision for the company..
  • by daevt (100407) on Saturday March 04, 2006 @01:07PM (#14850248)
    Some firms will compete through cost while others compete through quality of services. Considering customer-service of a specialized product a non-core part of your business is idiotic: intricate electronics have their own personalities, someone from Dell is not likely to be able to trouble-shoot a competitor's product-specific problem. Consider the difference in incentives between someone like Dell and a contracted company. Disregard the part of the article where they clam that the name on your work-ID effects your quality, that's bunk.
      To Dell, satisfying a customer can be meassured in terms of future revenue, while a contractor is going to view each call as a cost to be paid out of their contracted fee. Changing the incentive structure would change the results drastically.
      Imagine: You get paid some amount of money per week to deal with customers, out of this you must pay for staff and equipment. More time spent on customers means more staff must be hired. What would be the profit maximizing solution? Spend as little time on customers as you can while maintaining sufficient quality that you contract doesn't get canceled. You know there are no substitues for your services, customers MUST come to you unless they wish to incur the cost of a new computer. If you breed an atmosphere where your workers try to minimize the duration of calls, your quality will degrade and people will not purchase that brand in the future.
      Now imagine a setup where you get some smaller amount of money, almost enough to keep your doors open, and your customers rate your performance as "poor", "okay", or "good", and you get paid a small bonus for being "okay", and a larger bonus for being "good". Being "poor" most of the time means you go out of business (hopefully for the customers' sake you lose your contract first...) Pass on part of the quality bonus to your employees and they will spend more time, making sure that they get their extra money by being helpful. In order to realize the largest return possible you will invest part of your profits in training and more staff (for a decreased wait-time).
      The contracting firm of course needs to ask if they can do it for less money, but cheaper labor means a smaller fixed cost, so it would likely end-up outsourcing to another firm somewhere were wages are lower, say in rural Kentucky or purhaps off-shoring it to somewhere in the British Commonwealth. Basic microeconomic lessons: if your product runs the same software as your competitors, then your cost/quality combination must be more attractive if you wish to capture or retain that marginal customer; time spent on the phone listening to recorded messages tell you how much your business is valued is considered a cost by consumers; and incentives matter.
  • by Sr. Pato (900333) on Saturday March 04, 2006 @01:07PM (#14850252) Homepage
    Does that mean that good customer service can only come from the United States? That seems fairly sensationalist and egotistical.
    A well-run call-center gives good customer service. No more, no less. Bad call-centers exist all around the world. Yes, including the U.S.
    • No matter how well-run the Indian call center may be, they can't give good customer service if the customer in U.S. can't understand what the rep is saying due to his accent.

      Last week I called 1and1 internet tech support on a simple request (import a MySQL dump into a database). Now I have no idea if 1and1 outsources to India - maybe she was just chewing tobacco while talking or something - but I couldn't understand what the fuck she was saying more than half the time. It took 30 minutes just to convince he
  • Wrong reasons (Score:3, Insightful)

    by randyjg2 (772752) on Saturday March 04, 2006 @01:13PM (#14850272) Homepage
    Actually, there really isn't much of a correlation between poor service and outsoourcing... Wordt customer service I have seen in over 5 decades was a local TMobile helpdesk.

    There ARE, however, very real hidden costs to outsourcing that make it a difficult prospect at best; poor customer service just isn't one of them.

    The worst is managing the relationship of your US staff and the outsourced staff. I have seen numerous examples of subtle or even outright sabotage of the project by the US staff.

    One of the most successful outsourcers in the United States has a "core values" program for it's US staff...the ability to maintain political neutrality while acting as a good will ambassador is a key core value.

    Western and Hindu culture are very compatible if you take care to manage the intercultural references, whch can cause major difficulties. For example, many Hindus will say "You are correct" to acknowledge they are listening. What they MEAN is "OK" or "Uh huh", but Westerners often take is as arrogance or judgmental.

    Worse yet, Westerners take it as meaning that their point is understood, and it's culturally difficult (impolite) to ask for clarification if the other speaker has gone on to a new point. Its is very important to make sure what you think you are saying is actually what they are hearing.

    One minor point on an underlying theme of these comments. Believe it or not, institutional economic analysis shows that India isn't a serious problem for US jobs, not like China is, anyhow. The reasons range from cultural differences (India is highly conservative, for the most part) to the fact that the level of convergence is much higher, as well as a much higher integration of Indians into American culture. I suspect the reason India is getting such favorable treatment from Bush is that they are viewed as a "client state" of America, not an independent nation, probably for good reason.

  • Suveys like this do not tell you the number that would switch. When you ask people what they *would* do about such and such if it hypothetically happened, they are just taking a guess. I think they are just giving their opinion about what they think about outsourcing. When push comes to shove, most people won't change a habit or a program or a vendor because of outsourcing; they may just be annoyed for a bit but will soon get used to it. When they answer the survey, they are only guessing at a hypothet
  • by ErichTheRed (39327) on Saturday March 04, 2006 @01:38PM (#14850378)
    Most outsourcing decisions are made far up the corporate food chain. It's the job of the management staff to handle any difficulties before they are visible to those at the highest levels. As long as the work is passable and any damage canbe contained, no one hears anything and nothing gets fixed.

    Also, those complaining about outsourcing are probably wasting their breath. The next round of outsourcing is going to be targeting all the "innovation" jobs in IT like systems architecture and design that we thought were safe. I'm planning to stay in for the long haul and hope that some of this comes back around. However, we need to adjust our expectations to the new reality. If it's cheaper, it will be done. Unless consumer prices and our rampant spending are adjusted, we have no way to compete with people who will do good enough work for 10% of the price.

    The real hidden cost of outsourcing is the loss of a talent pool. If and when I have a kid, I'll encourage it to be smart and study, but I think I'll encourage it to be a lawyer or an MBA. They're not replaceable, and the professions (medical, law, etc.) have a very strong organization that keeps the barrier to entry and salaries high. A good example is pharmacy. Pharmacists don't make their own compounds anymore; they pour tablets from the big bottle to little ones, and get paid very high salaries to do it. All they have to be is careful.
    • by rlp (11898) on Saturday March 04, 2006 @04:55PM (#14850945)
      ErichTheRed wrote: The real hidden cost of outsourcing is the loss of a talent pool. If and when I have a kid, I'll encourage it to be smart and study, but I think I'll encourage it to be a lawyer or an MBA.

      My daughter (currently in High School) was interested in studying Comp Sci in college (like her mom and dad). We talked her out of it. She's also had people (usually current or ex-software developers) come into her school for 'career' days and tell her class that there's no future in IT, it's all going overseas. Interest in IT as a career among her peers is fairly minimal.

      Generation Y is not stupid. They see what's happening to their parents and friends of their parents. And they're adjusting accordingly.
  • The main factor, as far as I can tell is: "If we outsource, and lay-off expensive Americans, and hire cheap Indians, will Wall Street love us?" The answer is often yes, and that's pretty much a no brainer for guys who are compensated with a ton of stock options.
  • Actually, the cost of outsourcing is having a company that doesn't actually produce anything. Management who can only buy a product from a third party and a brand name are not value-added.
    • That said. I have no problem with my buddies out in India snatching up the cash in this market. Several of my best friends come from India and have worked in these shops.

      My gripe is with the idea that rotting out a company's core somehow retains that company's position.

      I figure that if I'm buying a product, it might as well just say the company that ACTUALLY made it, and they should get 100% of the revenue.
  • ....or just "work" -- lets keep in mind this is an international community.

    Outsourcing (to other countries or just other firms) -- when it comes to highly skilled programming jobs runs into the problems of management and flexibility. You CAN absolutely be successful outsourcing a complex application. You damn well better have a perfect specification with excruciating detail, a timeline that's very quick -- so your market doesn't change mid-process, and a perfect business plan that won't need to change as

Luck, that's when preparation and opportunity meet. -- P.E. Trudeau

Working...