Why outsourcing makes you fail and smell of wee

[Bugs ****ing Bunny]

We've had a few debates about outsourcing over the years, and I've consistently said I thought that the outsourcing of call centres and customer service areas to India or China was dumb. Seeing as my word amounts to rather less than bugger all in the real world, it didn't stop the grasping little whores who run our businesses deciding that savings in labour costs made it worthwhile.

Now it looks like the Bangalore Bubble is bursting. Labour costs may indeed be less, but seeing as your average Joe Public gets a bit narked about phoning someone more than two counties away, the thought of dealing with a wage slave in India was never going to be a winner. Customers hate it. They really can't stand it, and they're voting with their feet

In Britain's financial services sector, it's estimated that 50,000 jobs were lost to Asian outsourcing. However it looks like they're going to start coming back. Abbey National have announced that 1000 Indian jobs are coming back to Britain, after their owners described their 3 year experience of outsourcing as "an expensive failure".

http://www.hindustantimes.com/news/5983_1530103,00430005.htm

They won't be the last. Other companies are currently finding that outsourcing is difficult to manage and deeply counter-productive. Like everyone else in business who argued vehemently against outsourcing on business grounds, I'm so smug that you could bottle me and sell me as an emetic.

Outsourcing? It's just sooooooooo 2003.

[Last Conformist]

Tell that to the workers at the factory in the next city that just closed down in favour of a new plant in Poland which employs three times as many workers at about the same cost.

[duke o' york]

They can get jobs in the re-opening call centre....

[Atahualpa]

If you want cheap, you'll get cheap.
The main problem with outsourcing is that you lose control of quality and a major argument before your customers.

[Last Conformist]

Originally posted by duke o' york
They can get jobs in the re-opening call centre....

Considering that none of the call centres I've had reason to call in the last several years has been outsourced, I doubt there'll be alot of ones to re-open.

[Zopperoni]

The thing with outsourcing is that you can't isolate a single function (like call-center duties) because it's always part of a process. To have a decent chance at outsourcing success, you'll need to outsource the entire process.

[Provost Harrison]

Sounds like a victory for common sense. Also sometimes the accents can be very thick, especially over a phoneline, which can make dialogue very difficult...

[DanS]

Outsourcing may not have worked out for this company, but apparently it works out for some. As long as the wage differentials are so huge, we can expect many businesses to try it for themselves. Indeed, good management of these outsourcing deals may be a major determinant in the relative competitiveness of some firms.

[C0ckney]

outsourcing things like call centres where the people you outsource to are going to have to deal directly with customers, isn't a great idea.

however outsourcing your widget production to mr wang's widget factory will give you cheaper widgets, without making customers angry.

[Ted Striker]

Originally posted by Zopperoni
The thing with outsourcing is that you can't isolate a single function (like call-center duties) because it's always part of a process. To have a decent chance at outsourcing success, you'll need to outsource the entire process.

Yep, you are 100% correct.

The difficulty in these outsourced call centers is that you still need to effectivley manage them. That becomes rathar difficult.

Outsource Senior Management, I say.

[Ted Striker]

Originally posted by DanS
Outsourcing may not have worked out for this company, but apparently it works out for some. As long as the wage differentials are so huge, we can expect many businesses to try it for themselves. Indeed, good management of these outsourcing deals may be a major determinant in the relative competitiveness of some firms.

It looks good on the books, but once total cost of ownership is factored in, it's really more damaging in some cases.


Laz is right, outsourcing is so 2003. It will continue to be practiced, but won't be the big thing when companies need to cut costs. There has been a big backlash against it recently.

[Ted Striker]

Originally posted by C0ckney
outsourcing things like call centres where the people you outsource to are going to have to deal directly with customers, isn't a great idea.

however outsourcing your widget production to mr wang's widget factory will give you cheaper widgets, without making customers angry.

Yep, it's important that the call center operators understand the company culture, it's products, and the country culture they are dealing with.

That kind of knowledge transfer can happen most effecitvley locally.

Otherwise, what you end up with is a bunch of dispatchers who are relying on the home base to do all the heavy lifting. That means delays, frustration, and yes, increased cost per transaction.

[Colonâ„¢]

A nitpick, there's a difference between outsourcing and outsourcing abroad. I don't think too many people complain about companies contracting out-firm cleaning services for instance. I also don't see why an Indian call-center would be any less knowledgeable than a British one. Most phone operators don't know too much about the subjects beforehand and they get a crash-course specifically to an assignment.
The language barrier may be an issue though, don't know about that.

I agree though that companies may be a bit prone to jump on the bandwagon, without weighing the advantages and disadvantages properly.

[Mao]

Originally posted by Colon
A nitpick, there's a difference between outsourcing and outsourcing abroad. I don't think too many people complain about companies contracting out-firm cleaning services for instance. I also don't see why an Indian call-center would be any less knowledgeable than a British one. Most phone operators don't know too much about the subjects beforehand and they get a crash-course specifically to an assignment.
The language barrier may be an issue though, don't know about that.

I agree though that companies may be a bit prone to jump on the bandwagon, without weighing the advantages and disadvantages properly.

The language thing is what a lot of people use when complaining about call-center outsourcing. This is largely because, well, the quality of it is just so much less compared to a local call center not necessarily because those in India are more/less knowledgeable about a subject, but because communication is just so difficult sometimes. This is not to say that, say, Southerners may have a problem understanding me and vice versa, but many times the language discrepency is such a problem as to make the entire call counterproductive. For customers, the outsourcing would be fine if the English skills of the abroad worker were more akin to those they were serving (not necessarily a higher/lower level of skill mind you, but as someon else stated earlier, the matter of culture/accents is more important).

[Urban Ranger]

Outsourcing manufacturing overseas works fine, because there are only a few well defined points of contact. It doesn't matter if 90% of the staff in a Chinese plant doesn't speak English if the engineers and designers do.

Outsourcing services overseas don't work.