Outsourced Call Centers Losing Feasibility?

Daniel Pronych writes "BusinessWeek is running an article about how outsourcing call centers in India are no longer an 'inexpensive option' for American companies. These shops are now striving for better outsourced work from the U.S. and Europe multinational companies; many are fed up with U.S. clients trying to continually lower prices. New Delhi-based EXL Services, for example, terminated a contract with Dell Inc. because EXL was losing money in the deal."

Witty bit of wisdom

[grasshoppa]

Evil contains the seeds of it's own destruction.

Feasibility

[cwalk]

IHMO, Outsourced Call Centers were never feasible. They just seemed feasible.

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Re:More government tax on corporations who outsour

[m0rph3us0]

The funny thing is all of your ideas ARE anti-capitalist. No one is accusing you of being anti-capitalist, you are simply proposing solutions that are anti-capitalist.

Whether capitalism benefits or does not benefit us doesn't make your ideas any more or less capitalist. Just because people will turn to welfare if insurance doesnt exist, doesn't make welfare any less socialist. Welfare is simply one aspect of socialism in the American government. It doesn't make any sense to try and avoid socialism through more socialism. If the law that made tarrifs eliminated welfare then maybe you would have a point.

At least most capitalists have the balls to call their ideas capitalism rather than trying to label socialism capitalism. Just say it, you like socialist policies. I don't in general, but it's a free country so no one is going to put you in the gulag or send you to be reeducated cutting sugar cane if you want to change a law.

I don't need to "flame" you for being anti-capitalist its clear to anyone who can read and knows what capitalism means knows that the state using taxation to redistribute wealth is as anti-capitalist as it comes. Exactly which of your ideas aren't anti-capitalist?

Re:More government tax on corporations who outsour

[m0rph3us0]

Welcome to slashdot, where when you sell records and cling to outdated pricing models we flame you but when you are tech support clinging to outdated pricing models (wage expectations) then you need the gov't to help you.

Both are government interference in trade but we think because its us getting the benefit of law making that its ok.

Nevermind the millions who aren't tech support who just want cheap computers like we want cheap music, video, etc.

Re:Witty bit of wisdom

[yobjob]

Creating employment in a third world country doesn't strike me as particularly evil.

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Re:Witty bit of wisdom

[LordVader717]

India? Third world? Where have you been living?

Business models

[kippers]

The reason why people don't like outsourced call centres isn't usually because they are in India (however if it has lead to loss of local jobs people dislike that too). It's because things are generally made harder. The people in India aren't generally very good at speaking English, and commonly fail to understand what you are trying to say. They also generally are of little help. If you have a problem, you are either put on hold, or relayed a manual (which you have probably already read). They also are usually rather powerless - there *is* very little they are able to do - they are just made to 'deal' with people - and this just annoys most. Since they usually know so little about the subject you are calling about, working with outsourced call centres is just like flogging a dead sheep. They also probably think the same about dealing with angry customers. It's all about profit now, not customer service, and not about keeping the customer happy. If the customer is unhappy but they stay with the company - then their business model is working. However if you leave the company, you just receive the same level of service elsewhere.

Re:Witty bit of wisdom

[Anonymous Coward]

I wouldn't write off outsourcing just yet. If the US increases the minimum wage as proposed, this may pretty firmly establish a class of jobs that are much inherently cheaper to fill offshore when possible.

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Re:I wonder

[Secrity]

"If the call center jobs get moved to the US,etc... will Indians complain about their jobs being outsourced?"

No, they will get H1B's.

Outsourcing Outsourcing

[8ball629]

Hey, I'm not going to complain. U.S. companies like Dell should keep their jobs within the country so they can provide more US citizens with jobs and in turn those people can buy their products - improving the economy (as much as they can).

Re:Besides rising wages...

[LordLucless]

You're missing the whole point of customer call centres. They aren't there to help customers; they're there to get customers to go away. Call centre workers are evaluated based on how long they spend on each call, not on how satisfied the customer is when they've finished. That should give you an idea of the call centres' priority. For the most part, they exist only so they can tell a customer how the company they represent is not liable for whatever fault the customer finds with their product or service.

Companies that take their call centers seriously provide people who are informed about their particular industry, and their company's products in particular. You don't get that sort of familiarity by sending over a bunch of scripts to a generic Indian call centre. You get it by making your customer support team an integral part of your business.

Re:Feasibility

[umkhhh]

in a sense you are right. It usually worked like this:

1. a brilliant manager comes to a new cunning plan to save the company zillions of talars, grosh or whatever - there is this new fashion it is call eeeeee outsourcing let's outsorurce my dep. I do not need these lazy overpaid bastards anyway.
2. proposal is being made everobody agrees after all even Wanker Weekly wrote about it
3. majority of customer service engineers are freed fromtheir duties a new CC in Zamunda is opened
4. Due to layoffs the share price of the corporation is higher than ever - the brilliant manager is rewarded according to his achievments and he has less duties: instead of talking to lazy bustards he has now only one manager in Zamunda to talk too in case of problems or free lunch.
5. the customers stopped complainig - excellent the brilliant manager says: the new policy works we even have unpredicted profit - no complains. We saved zillions of tallars, got rid of complaining customers and improved the quality - all in one go - we are better than head and shoulders.
6. unfortunately book keepers notice that orders fall as custmers are pissed off: they either cannot reach the CC or they can but after struggling with new voice manu they find out that the person on the other side of the phone does not understand a word or even if s/he does it serves no purpose as s/he does speak with accent so heavy as it were made of plutonium.
7. the briliant manager is either given a golden hand-shake or promoted depending on clauses in his contract.

Every new fashion in managment works the same way: short lived fascination and then covering arses of the responsible possibly declaring the whle excercsie as a big success. Downsizingworked the same way (was it not Amtrack that was so successfuly down-sizing that they did not have any body to drive their trains anymore?)

Sombody was talking about silver bullets around here? It looks like one only the silver is faked.

Re:Circular Wisdom!

[zlogic]

Think about it, when you have to call support in in India for some peice of crap made in China by an American company :-)

Re:More government tax on corporations who outsour

[Jah-Wren Ryel]

At least most capitalists have the balls to call their ideas capitalism rather than trying to label socialism capitalism.

Oh get real!

All large businesses and plenty of small ones are constantly at the government's teat in the USA. Big Business in america is forever lobbying for more and more corporate socialism and calling it capitalism in order to justify it. Some entire industries are based on government subsidies - either direct money transfers like ADM gets or indirect subsidies as side effects of legislation like the big telecoms get.

Re:More government tax on corporations who outsour

[Anonymous Coward]

Plus a company which has its revenues excessively taxed will just relocate their production base to a more liberal country. China, India, Lativa, Lithuania, Estonia, and other countries currently enjoying two-figure GDP growth will welcome them more than happily. No it's not a coincidence that countries with lowest taxes are the fastest-developing ones.

Re:More government tax on corporations who outsour

[saider]

Imagine that the USA would expand to include Mexico and middle-american states "because there are so many people there that want to work and expand our economy". That would be like what the EU does.

We have. It is called NAFTA (North American Free Trade Agreement).

There are many instances of companies going "south of the border" to get cheap labor. In fact, many "American" cars are less american than the imported brands. So we lose good manufacturing jobs _and_ we still have to import a signifcant amount of service labor.

In general, I am more capitalist and tend not to trust the government to solve my problems. I don't trust my employer to take care of me in the long term, either. I have to rely on my wits and keep my skills to the point where it would do the company more harm than good to outsource me. I make it a point to subtly remind my managers of this.

Who would have called it?

[Meor]

Anyone with even a basic understanding of macroeconomics would have. Build the economy in a country and they'll demand a higher standard of living. This is what economists have been saying forever why free markets are better.

Made in America

[aplusjimages]

I'm amazed this form of advertising hasn't happened in the US. There is such a push for "Made in America" and supporting American made stuff that this would fit right in. Then again, Americans don't like many American products.

How Convenient for Dell

[FSM]

Is it only me or would "India side quitting the deal made us pull back to US" be a great excuse for Dell execs and Dell itself to pull the centers back to US without admitting the entire idea was crap in the first place?

Re:Witty bit of wisdom

[Isaac-Lew]

It's a long drive from the US to an Indian Wal-mart. If you're referring to tech-specific jobs, just about all the minimum-wage positions that can be outsourced have been in one way or another.

Re:Location discrimination

[ErikZ]

Outsourcing usually involves getting rid of entry level positions in a company. Look at the job ads today and the current "Junior" or "Entry level positions" in IT require years of experience just to be considered. It used to be that if you graduated college, you had a shot at the first rung in the company.

Now that there is no low level pool of workers in the company to promote, businesses are having a hell of a time finding people to hire for higher level positions. I was just looking at http://www.avaya.com/gcm/master-usa/en-us/corporat e/careers/careers.htm [avaya.com], a local branch. Every single one of their job ads required 5 to 8 years of experience in the specific job field. Almost every time I talk to someone about how hard it is to find good IT help, I tell them to grab someone from their internship program. Usually their response is "Oh, right, we should implement one of those."

And if all human beings are equally deserving of those opportunities, then you should be against outsourcing. Because those opportunities are no longer available in the host country.

Re:Location discrimination

[porkThreeWays]

Rich countries and corporations are capitalizing on the poor. I think that is wrong. If they were paying these people a wage that might get them to levels of modernized countries I would have no problem with that. They make the argument "but 1 dollar a day wage is good for country X". Why? So they can sleep in straw rather than a pile of cow shit? Justifying continious opression with a standard of living that is slightly better is no argument.

I'm not mad at the residents of these poor countries. They just want food on their table. However, I'm furious at the modernized companies that capitalize on their suffering and then justify it to themselves.

How is the rest of the world supposed to compete with what is essentially slave labor?

Re:More government tax on corporations who outsour

[drooling-dog]

Just because people will turn to welfare if insurance doesnt exist, doesn't make welfare any less socialist.

Does it make insurance any less socialist?

What you call welfare is insurance paid for by everyone through taxes, and with universal coverage.

Insurance is welfare paid for through premiums but limited to a select membership.

Participation in the "welfare" insurance plan is involuntary for taxpaying individuals, yes.

Participation in the "insurance" welfare plan is somewhat voluntary (although less so than you probably think), but is denied to broad categories of people who are either deemed high risk or are unable to afford it.

Dwelling on labels like "capitalist" and "socialist" does nothing to further your understanding of either insurance or welfare, which are both just mechanisms for spreading risk from the individual across a broader population. The real difference is simply how broadly you wish to spread it, and whether it will be denied to those most in need of it.

Re:Besides rising wages...

[intrico]

The whole reason you were chided for your calls being too short, is because your company likely had an agreement with Gateway to bill them by the average time spent "servicing" each customer, rather than by the call. I have done the contracted-call-center thing too, working in a place where we had multiple "skill sets" supporting multiple big-name clients. The majority of the Big Name clients were billed by the call, so call-center "agents" just had to take as many calls as possible, keeping them as short as possible. But then there were a few Big Name clients who had somehow determined that keeping call times longer than X minutes safeguarded them against having customers rushed off the phones, but placed a maximum target of Y minutes as a safeguard to keep call handle times from being excessive. Invariably, when customer support is outsourced, the company who is trying to get the contract from Big Name Client sells themselves on how they provide the best service, their agents are intensely trained, etc. - BUT, in the end, it ends up being all about the numbers, because customer satisfaction with their support is hardly ever tracked reliably. Also, outsourced wages (even on-shore) are almost always too low to retain call-center agents with the decent technical troubleshooting ability required to both post good call stats and actually satisfy the customer's needs at the same time.

Re:Location discrimination

[Mawbid]

I think this is flawed logic.

I think what you (and many others) are saying is basically this:

Affording low-wage jobs to those that have very little instead of high-wage jobs to those that have more is immoral.

But people who are offered low-wage jobs have no obligation to accept the offer. If they choose to do so, is that not because in their estimation, and according to their values, the job is the best they can get?

I understand your horror at placing yourself in their shoes and finding a choice between hay and dung. I feel the same way. But how, I ask, is having no choice better?

Re:What goes around comes around

[drooling-dog]

So if India can demand better wages and reject outsource work, can America have those jobs back?

No, they're more likely to go to Nigeria. As India becomes too expensive, there will always be other places where labor is cheaper and workers more desperate.

It's not exactly "over", though...

[dr.g]

Not when the (revenue-producing) ads showing in the whitespace are for:

[b]Outsourced Call Centers
In the Philippines highly trained reps deliver superior performance.
www.ePERFORMAX.com
Outsourced Call Center
Improve agent productivity; provide great customer service. Free trial.
www.salesforce.com/service&support
Outsource to India
Wyoming co. has 200 desk ofc. bldg. in Bangalore, staff to your needs
www.globalstaffingconnection.com[/b]

Heh. Seriously, when I heard, maybe 10 years ago, an NPR report on the coming wave of outsourcing, the examples they recorded WERE of "computer science graduates who speak perfect unaccented english for $50/week". Of course, the companies (probably both US and Indian) soon realized they could get an "english mangler who may have seen a computer once" for waaay less than $50/week.

So the plan was to hand these less-expensive people scripts and flow charts/solution trees and roll around in the great pile of extra money like Scrooge McDuck. and I'm sure it's worked out exactly like that for some few execs.

That's why I've always felt bad dealing with unintelligible or ill-prepared service people in India and always try to be aware that they too are victims of decisions taken with NO consideration for customer satisfaction.

Companies are going to have to allow for 'cultural bias' and keep 'customer-facing' services local. The data and correspondence stuff? Not so much.

Re:Location discrimination

[wantedman]

<i>I don't follow. Selecting one out of two equally deserving candidates is wrong?</i>

The idea is, that if you buy something from your sister for $5, the money stays in the family, but if you buy that same thing for $3 at Walmart, you may get a good deal now, but now that money is no longer in your family. While we're saving money in the short run, but in the long run, we can no longer borrow $2 from our family, because Walmart has all our money.

This is what the grandfather is getting at, investing in your local work force will pay off later, in the form of having an experienced workforce to choose from. If no one gives anything to the current entry-level workforce, there will be no experienced workforce.

Sure it is

[pkbarbiedoll]

We don't live in a vacuum. Creating opportunities in third world countries eliminates opportunities in first/second world contries. Moving poverty around isn't helping anyone (except, in this case, corporations).

READ THIS YOU DOPE

[sanman2]

What garbage. You're calling free market enterprise a zero-sum game.

If you could wave a magic wand and suddenly make half the US population disappear, would that mean there'd suddenly be a flood of job openings because half the population was suddenly not showing up for work? Nonsense, your market would have also been cut in half, thus halving the number of available job opportunities.

The converse is similarly true -- if people in other countries start joining the workforce, then does that suddenly reduce your job opportunities? Hell no, because all those new working people are also increasing the size of the consumer market, and therefore increasing the number of job opportunities available.

If anything, a larger economic pool is better than a smaller one, since it will be able to buffer against recessions and local swings much more effectively. There are piles of reasons to want the free market to grow larger.

Re:Besides rising wages...

[Dr. Donuts]

I think the point that should be made is that regardless of outsourced or not, the metrics for call centers are in many cases just simply screwed up.

The whole point of a call center is to assist a customer and solve their problem. Measuring the number of calls handled, average talk time, or any of the other meaningless call metrics provides no information on whether the core responsibility is being accomplished or not.

I implement call centers, so I see this everyday. The problem is it's easier to count the number of calls and minutes then it is to implement a system that measures a customer's satisfaction. It's easy to spot which companies actually care about their customer's or not simply by looking at what metrics they use.