I thought about this question today as I spent over an hour on the phone with my ISP’s tech support, which involved talking to (and occasionally yelling at) three idiots with thick Hindi accents. For a while I was convinced that my ISP had surrepticiously “outsourced” its technical support department to Hyderabad, but when I asked, they said they were still in California…which explains the accent, I guess.
Anyway, my question is simple – what’s the financial incentive for American corporations to move their calling centers to India, or some other location halfway around the world? Yes, I understand the wages are cheaper…but is it really that much cheaper than the telephone costs?? According to my phone card, it costs up to 35 cents per minute to call India (not that I’ve ever done it) whereas a domestic call is rarely more than 10c/min. Certainly the phone bill alone would make such an arrangement prohibitive? Not to mention the language barrier, etc.
Well, those call centers are going to get bulk rates; they aren’t paying what you pay for long distance to India. And the wage differrence is pretty big - this report claims the average wage+bonus for a US call worker is $520 a week; in India it is only $60.
As for the language issue; India has a lot of people who speak English. Though in my experience, it ain’t the same English they speek here in the states.
Ever hear the old urban legend about the town in Japan that changed its name to Usa, so they could stamp “MADE IN USA” on their products? (Yeah, I know it’s false, but it wouldn’t suprise me to learn that “California” is somewhere near Bangalor :p)
With Voice over IP, the costs of transferring callers overseas doesn’t even dent the equation.
I manage outsourcing to India, and the labor costs are the single biggest factor. Any slight increases in other areas vanish in the equation.
Additionally, our partner there will hire and replace workers at a pace unheard of here in the U.S.
Even changing our telephony set up was a joke.
We suck up about 250,000 dollars in added costs (travel kicks in another 250,000), so we spend 500,000 to save about 5 million. Now, we’ve done some mis-management of travel, and we got off to a slow start, but that ate into about another 100,000.
I was a management consultant at one of the biggest and best-known firms that specialized in this. Labor is everything.
What goes unsaid or at the very least is misunderstood is: what are the intangible costs of outsourcing? Things like:
whether the customer relationship is worse off because of the lack of geographical / cultural connectedness between the Customer Service Rep (CSR) and the customer. For probably 90%+ of businesses, this may not be an issue, but for some, it could be a big deal. 1-800-Dentist is keeping their CSRs in the U.S. for this reason, for example.
the impact on a company’s culture of outsourcing - the remaining U.S. employees are often hugely impacted by the move - their feelings of job insecurity and lack of community can directly impact their productivity.
the ability to stay on the same page, in terms of business mission and objectives. It is one thing to have, say, a country-focused unit of a company - selling toothpaste or cars or something in another country can function like a carved-out separate unit and tune to that country’s culture. But a call center is an integral part of a business, so the locally-based personnel are expected to work perfectly in step with colleagues who are now thousands of miles away. Depending on the complexity of their interactions, this can be very tough.
There are more but you get the idea. Outsourcing is ultimately like Business Process Reengineering, Mergers, Dot.com’s etc. - a small percentage of companies will exploit this trend to huge gains, but most other companies will flock like sheep to go after the same benefits, maybe realize some near-term cost-cutting, but ultimately suffer because their culture and/or operations could not make the adjustment. Just churning dollars.
We planned on sending more processes and saving more money, as much as 12-15 million, but we are scaling back what we send. Bad publicity and a number of hidden reasons, some of which WordMan touched on.
We dove in, we did save money, but it’s not the ‘be all’ and ‘end all’ we thought.
A key thing to remember: 5 cents a minute long distance is immense price gouging. Divide by a hundred to get actual costs for standard long distance. Divide by a stratospheric number if you do VoIP.
The standard rates in ads for long distance are comparable to high end bottled water. Nobody pays anywhere near that for the same water in millions of gallons.
Long distance rates should have dropped substantially 4 years ago, but the telecom crash due to overbuilding means that all the major players have to keep rates high (and in fact raise them!) in order to pay off all that excess stuff. As long as no one comes along and advertises on TV long distance for 5 cents an hour, anywhere in the world, the telecoms have a chance of staying alive. Otherwise, major companies that are already just barely surviving will collapse.
(I’ve been doing voice and video across the country for years. All for free over my Internet connection. If I knew someone in Asia, I could talk to them for free too.)
is it permitted here to ask what program you are using? I have a very good friend in Germany that I want to vidconference with but nothing really seems to work. So far the best we have been able to manage is video over MSN, but no audio. We have tried netmeeting, yahoo, and a couple others that a friend suggested.
<when we tried doing the msn voice along with the video i keep getting a message that the isp or my computer wont support, and dagnabit I have an HP ze4100, and it should be able to handle it, and my ISP is earthlink cable…>
But to get back to the outsourcing thread…Personally, I would work for minimum wage if I could do computer / telephone customer service at home=( I have 2 phone lines, and 2 computers so I could do it very effectively=( Unfortunately it seems that any time I try to find a work at home job, I have to go through some stupid websites that you have to pay to join…and I hate the idea of that because I dont trust them to be honest=(
Netmeeting and several other videoconferencing programs use a standard called H.323. “In principle”, any H.323 program should be able to work with any other. Reality does not agree. In particular, H.323 uses a dynamic port assignment system that breaks going thru NAT routers, corporate firewalls, etc. Sometimes the person at one end can originate the call but not the other.
I can get things to work with a wide variety of software, unfortunately, the people at the other end don’t also have PhDs in Computer Science. So what works best is Yahoo! Messenger. The video quality is not as good as it should given the connections I use, etc., but they are improving it. If you have problems with Yahoo! Messenger, check their faqs and help pages. Start with text, work up to voice, then try video.
