Outsourced Call Centers Losing Feasibility? 268
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."
Re:More government tax on corporations who outsour (Score:4, Interesting)
When a large company had problems, the government would take action like buying products from them, subsidizing research or construction, etc.
It worked for a while, but then the first examples of fraudulous management who put the government money in their own pockets or their own adventurous projects appeared.
It seems like greed will always win from responsibility.
Now, we have the EU. Instead of moving jobs outside the EU, new low-wage low-welfare countries are added to the EU faster than you can imagine, and companies are encouraged to move their jobs there. This results in some fictitious good economic results, but of course when you are losing your job because of this, you'll look at it in a bit different way.
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.
Small wonder that those countries where the people were asked their opinion voiced a strong NO. However, it will take something stronger to really wake up the EU politicians.
What goes around comes around (Score:4, Interesting)
So if India can demand better wages and reject outsource work, can America have those jobs back? We already know the language. Or will we have to wait until Business is done exploiting China and the third- and fourth-world countries? Some companies have come to their senses, but not all and not fast enough.
Which brings to mind a Dilbert strip about how the outsourced work had been so undercut while being bounced to foreign markets that eventually it went to the lowest bidder -- the original company.
Didn't RTFA, but here's my two cents.... (Score:5, Interesting)
I've actually had a conversations start with "Finally, someone in North America.", "Great, a Canadian. Better you than India." and many other anti-offshore statements.
And that's not even getting into some of the rather rude comments that people make towards our Indian coworkers. I especially feel sorry for immigrants from India/Pakistan/etc. who are IN Canada, but get treated just as badly as if they were IN India.
And of course, I've dealt with India call centers as a caller. While I'm patient towards them because I know exactly what they have to go through, I'm less than satisfied with the level of service I get sometimes. I'm not surprised in the slightest that India firms are ramping up their rates.
Oh, and something interesting I've found out recently, is that there are also some firms opening up in Latin America. Why? Because they can support English and Spanish.
Re:What goes around comes around (Score:4, Interesting)
Command and Control to Lean/System Thinking (Score:5, Interesting)
Time to look at the Philippines (Score:1, Interesting)
Re:More government tax on corporations who outsour (Score:2, Interesting)
A symptom of measuring the wrong thing (Score:5, Interesting)
Most call centres are still back in "rote stock answers territory", so the life of the end consumer never gets to improve. In the final analysis, it's the fault of the company who decides to outsource in the first place. If they got a statistician or someone who could map out customer value streams, they'd save more costs than outsourcing to the cheapest battery farm - wherever it is located..
Ian W.
Re:More government tax on corporations who outsour (Score:1, Interesting)
And that stopped Merck from selling Vioxx without a warning against people with heart conditions taking it? Someone in the company drafted a letter indicating that, if I recall correctly, Vioxx would make roughly $250million more in 6 months without that warning, and someone else went forward with it. Knowingly killing your customers being frowned upon or not, I bet regardless of whether Merck crashes and burns from the lawsuits, the people that knew about this will get their golden parachute and not a single scratch. They'll probably be welcomed to the executive ranks for another company, just another guy who makes the ballsy decisions that gets the stock price up for the quarter.
The BPO industry in India is maturing... (Score:3, Interesting)
From an outsourcing service provider's point of view 'voice' work is simply a pain. Steep learning curves, high attrition rates, higher training costs - not to mention all the other complexities due to the 'real-time' and customer-facing nature of work.
Most of the large BPO providers in India offer voice services only because their clients want to offshore both kind of work. In any case, as a risk mitigation strategy these BPO companies do maintain a balance between the two (and perhaps emphasising more on data work). Again, even in case of voice work a balance is maintained between 'outgoing' call business and 'incoming' call business.
As far as the QOS issues are concerned, clients need to understand that 'what you pay is what you get'. Clients expect 'first-world' levels of service and infrastructure at 'third-world' prices. And that includes not just the basic service being provided but also value-added functions like quality initiatives (Six Sigma, ISO9001), risk management (BCP, infosec), etc. The interesting part is these same clients themselves hardly have such 'best practices' implemented back onshore!
The good part is that most of the large Indian BPOs really do a damn good job at offering all this (and more) and at a fraction of the price that it would cost their clients. In my opinion, it would be a good thing for India if clients stop offshoring voice work. Indian BPOs can do a fine job with data work - the BPO agents are great with written english, so even customer-facing processes like 'correspondence' work is not an issue at all.
PS: In case anyone is wondering - Yes, I am from India and I work for a large Indian BPO.
Regards
Re:More government tax on corporations who outsour (Score:4, Interesting)
You are forgetting that EU isn't only about economy, but about culture and security as well. The east-west division is unsupported by Europe's history.
Not to jab at you, but it's funny how economists have hijacked all decision-making and ways of thinking. We might be better off with people from the other "angles" in gov't and media leadership. Now it's like a buncha mathematicians running all Science...
Hope you get what I mean
Re:Might both lose (Score:3, Interesting)
I completely agree. The online customer service where you can chat live is my personal favorite and in my experience it has been both much faster than waiting on hold and like you mentioned I have never been unable to understand what the person I was chatting with was trying to communicate. I also prefer it because of the real time nature it has compared to the back and forth of e-mail which can take days.
Two experiences that really stick out in my mind both were dealing with Dell (who I must add that I HATE calling their customer service). The first time I used Dell's online chat my brand new home theater project had one pixel that was constantly on which I just was not going to deal with because of the price of the thing plus the fact it was delivered that way. It only took 10 minutes while I explained the problem and gave them my shipping information and about 3 days later a brand new projector arrived which I hooked up, tested, and then put the old projector in the box and shipped it back.
The second time was at my work where my LCD monitor was starting to have full lines near the bottom of the screen that were either off completely or on and all goofy colored. I went to the online chat again and after hooking up another monitor to make sure the problem was not with the video card the agent told me that they would ship a replacement and it arrived the very next day. They actually sent me two monitors by accident and I of course sent the extra monitor back but it would have been nice to have a 2nd monitor to try if for some reason one of the "new" monitors had a problem too such as burnt out/stuck pixels.
For most customer service related conversations I think chatting online is way much superior to the usual hassle of calling on the phone, waiting forever on hold, and then getting someone who is hard to understand and communicate with. I would like more companies start setting up online chat because it could be more effective, a better experience for the customer, and it probably would be cheaper since no phone would be needed and a customer service representative could handle more than one person at a time pretty easily. Of course the companies cannot get rid of phone support completely since some people do not have internet and some people prefer the phone but they should still at least consider setting up online chat support.
Does anyone else agree?
Re:More government tax on corporations who outsour (Score:4, Interesting)
There are many instances of companies going "south of the border" to get cheap labor.
My favorite comments for execs in companies that outsource is to say "Oh, you like to speculate on currencies too, eh?" The US economy is getting to where it's not easy again to manage things (companies, portfolios, hedge positions, etc.) When interest rates were at historical lows, it was pretty easy to pick stocks and not bonds, for instance. Financial management becomes much more challenging when conditions don't automatically pick the right answer for you. I'd swear this is the real reason the Fed uses its stick/carrot control of the Fed Funds Rate - more as a cue to the dumb managers out there to make the obvious decision.
Firms outsourcing labor have had an equally easy job with respect to a significant risk they're incurring due to similar currency conditions: because the dollar has been comparatively strong to the yen, euro, rupee, etc., it was easy to just assume there was no exchange issue and foreign labor was incredibly cheap. That's changing. I've built a moderate international exchange-traded fund (ETF) position in anticipation of a weakening dollar (which will probably become a major decline as soon as enough inflationary pressure collapses the "Federal treasury bubble" - a less-than-polite term for the near constant demand for US Treasuries used to back unsustainable U.S. Federal spending). When that occurs, the international assets I hold will increase in value, but efforts to buy more of them will also become more expensive.
Should U.S. firms outsourcing labor wake up and discover a moderate 10% decline in dollar, they're likely to have eliminated their outsourcing financial gain. Another risk now being realized is unmitigated outsourcing contract fee exposure - several firms I work with in the Midwest US have been surprised to learn that when they completely outsource an operation and lose that internal competency, the fees suddenly start to hike up. The company itself is no longer able to easily take that operation back in-house and the outsourcing firm that underbid the business knows this.
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.
That's really a critical point for all of us. If your cable TV becomes more expensive, less featured and less reliable than dish TV, people switch. The same goes for employees in companies.
*scoove*
Re:More government tax on corporations who outsour (Score:3, Interesting)