Offshoring Tech Support Debate Rages

Tech support globe trotting is raising some concerns -- and not a few hackles. Should companies keep the work onshore or take it overseas?
Posted October 27, 2004

Drew Robb

Drew Robb

A couple of years ago, if you called up tech support to fix a problem with your broadband connection, you'd speak to representatives in Wyoming, Ontario or maybe even Newfoundland. Today, however, you're as likely to be talking with someone in the Philippines or Bangalore, India.

But this tech support globe trotting has raised some concerns. What about cultural know-how, the physical distance, and, of course, the loss of American jobs?

''We haven't gone overseas as we found no evidence that we could deliver the exceptional customer experience, consistently, that our company is committed to,'' says Michael Yazzolino, contact center manager at Xerox Corp.'s Office Group based in Wilsonville, Or.

Advocates, however, point out that outsourcing has been around as long as the industry itself, and that it's all about cost.

Art Coombs, president of call center vendor KomBea Corp. of Orem, Utah, shoots down the idea that outsourcing is about anything more than gaining the best price.

''Man has been doing offshore outsourcing for thousands of years,'' he says. ''Anyone who argues against it would think twice if their laptop cost $10,000 or their shirt was three times the current price. We demand high quality and low price. That is capitalism.''

So who is right and who is wrong?

The arguments for both sides are heated, and passions appear evenly divided.

The Prosecution's Case

As the many companies that are offshoring jobs receive plenty of press, it is easy to miss the fact that a majority prefer to stay at home. Even among those that have integrated outsourcing into their corporate culture, a large chunk of them contract strictly with American firms.

Xerox, for example, outsources some Tier One tech support, but only within North America. The company uses an outsourcer in Idaho Falls for 75 percent of its Tier One calls. The remaining calls are handled by other Xerox offices in Saint John, New Brunswick, and a small in-house center in Wilsonville.

Since Tier Two support is highly specialized, and requires high-end technical workers, it is based solely at headquarters in Oregon.

Only 5 percent of calls escalate beyond Tier One.

''Tier Two is never outsourced,'' says Yazzolino. ''It's all about delivering support choices that fit customers' need and solves their problem or question the first time.''

This onshore approach is supported by Ivy Meadows, the president of High Tech High Touch Solutions Inc., a Woodinville, Wa.-based consulting and system integration firm in the call center space.

''I have successfully prevented any client going offshore who asked me to assess its value,'' says Meadows. ''Its all about loyalty and retention. One major outage and you've lost all your profit.''

The Defense's Case

Coombs says outsourcing is booming because it works and it keeps costs down. Five years ago, we had sent perhaps 50,000 seats offshore to India alone. Today, he estimates that this has escalated to as many as 400,000 seats.

''Tech support agents in India working in Tier One are generally very technically savvy,'' he adds. ''That same level of home-grown talent gravitates to higher-skilled positions in the U.S.A. American Tier One technical support personnel... rarely have a technical background and typically use scripted questions and answers.''

Coombs lays out the economics of outsourcing in simple terms.

Some PC manufacturers, for example, build consumer machines for $400. The margins are skinny, to say the least, and cannot absorb an additional $15 to $20 per every customer service/technical support call. Consumers call for inexpensive products, Coombs notes, but scream when they hear that almost every part was built and is supported offshore.

Like Xerox, Coombs recommends the outsourcing of first-level business to consumer technical support. But unlike Xerox, he believes in offshoring.

Taking a similar stance is Robert Barnes, first vice president of BankOne based in Wilmington, Del. The financial institution, which now is part of J.P. Morgan Chase and Co., has overseas call centers in Scotland and India. The difference, though, is that these call centers are owned and operated by the bank itself. The work is not being outsourced.

''Don't outsource your core competency, as that puts your destiny overseas,'' he says. ''It's better to balance things with some offshore and some local.''

Cultural Affinity

According to Brendan Reid, a manager at the AnswerNet Network in Princeton, N.J., the debate over offshore versus onshore call centers should be argued based on service. AnswerNet Network is the United States' largest telephone answering service and a provider of outsourced contact center services.

Regional and cultural differences (even between the U.S. and Canada) are an issue, he says.

Consider the area of medical services. The Canadian and American systems are very different. The term HMO, for example, doesn't even exist in Canada.

''The more high-touch the business is, the less of a case you can make for offshore,'' says Reid.

Cultural affinity between American users and call center workers is even more of an issue when offshoring to the Philippines, India or Eastern Europe. Idioms and work styles, for instance, are apt to be different and possibly off-putting.

The cultural affinity factor, however, can be over-stressed.

Coombs gives an example using a contact center he ran in Europe. The northern Italians said they wouldn't take calls from people in Rome, and the people of Paris initially said they would only take calls from Parisians. But eventually such bias and preference was overcome. People in Europe now widely accept that agents are multilingual and call centers are distributed.

''Consumers want fast responses, accurate answers and to be treated with courtesy,'' says Coombs. ''They don't care who it is, as long as the above three are present.''

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