DISCUSSION

An End to Outsourcing?

June 19, 2006Written by RetailWire Staff

By Bernice Hurst, Managing Director, Fine Food Network

Perhaps customer preferences do matter after all. And perhaps the cost savings made by outsourcing call centers to Asia are not as great as the cost of losing customers unhappy with the service they get. In the past week, both Powergen, a German owned UK utilities company and American giant, Apple, have announced that they are closing down their centers in India. Even before them, British bank, Abbey, announced plans last October to close its Indian call centers and bring 1000 jobs back home.

As complaints reached record levels, companies have decided that their customers are important and that their satisfaction is paramount. Nick Horler, Powergen's managing director, said, "When customers contact us they need to be confident that their query will be resolved quickly. Although the cost of overseas outsourcing can be low, we're simply not prepared to achieve savings at the risk or expense of customer satisfaction."

Apple, on the other hand, may have other plans for its overseas operations which are more backend than customer facing. Although its captive center is going to close, Apple recently contracted HCL Infosystems to provide sales, distribution and service for iPods in India. There is also speculation that outsourcing will continue in a country where labour costs are even lower.

Moderator's comment: Is this the beginning of a trend? As globalization grows, and more retailers open stores in new countries, will people living in those countries become more accustomed to Western ways and, therefore, better at relating to and solving problems? Can b2b call centers be more successful than b2c? Or will there always be barriers due to distance?

Call centers, wherever they are located, have long been considered the 20th century equivalent of working in a mine or a factory. Conditions have never had good press and the jobs rarely considered desirable. There has been a high degree of turnover and burnout. Calls are timed and employees pressured into achieving as many as possible during their shift. Satisfactory conclusions to customer complaints were not viewed, by customers at least, as high priority.

Add to this difficulties in communication because of accents and sometimes limited vocabulary or familiarity with products and lifestyles, and you can see why both customers and operators can get frustrated. Bottom line, problems are not resolved and customer satisfaction levels sink ever lower, unless, of course, the center operators are dealing with technology and processes that are mutually understood. Perhaps this is the answer; restrict outsourcing to business to business applications and everyone will be happy, including the accounts department. - Bernice Hurst - Moderator

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