Does Offshore Outsourcing Still Make Sense?

This is an interesting article on continued viability of offshore outsourcing especially in call center environments. It is interesting to note the proposed Congressional rulemaking requiring location announcement by call center employees to consumers. On an anedotal basis, I've heard many complaints about Verizon's call center outsourcing. Earlier this month, I also had an interesting conversation with several CWA (Communication Workers Association) union members returning from their annual member meeting in Toronto regarding Verizon metrics and gaming that is occuring in regards to repairs. Per the union reps, the Virginia PUC is investigating Verizon repair metrics for accuracy and may end up imposing fines. It will be interesting to see if customer and union complaints causeVerizon to change their call center outsourcing decision in the next few years. -Cheryl London

The enterprise trend to contract out contact-center operations overseas as a means of saving the high costs related to supporting an all-American staff may start to reverse, due in part to customer backlash and pending government oversight.

According to a new feature now posted on TelecomWeb's "The Next Generation Contact Center Report" microsite, in a recent report, Michigan-based CFI Group in Ann Arbor, Mich., raised questions about the wisdom of contracting out contact-center operations to foreign countries, again warning about potential negative effects of offshoring on customer goodwill and retention.

The study found that customers who believed they were dealing with a contact center outside the United States rated their overall satisfaction 26 points lower than those who believed the center was U.S.-based. In addition, callers to foreign centers were almost twice as likely to sever business relations with the company. Specifically, service reps at offshore centers were rated much harder to understand and less adept at solving customer problems.

Despite the cost savings, "there is concern that customers will be turned off both by the loss of American jobs and by the lower level of service," CFI Group noted, thus bolstering the "patriotism" consideration.

And if customers fail to influence an enterprise's decision when it comes to offshore contact centers, at least one pending rulemaking in Congress, if signed into law, will.

House Resolution (H.R.) 1776 (slated to be called "The Call Center Consumer's Right to Know Act"), was introduced in March by Rep. Jason Altmire (D-Pa.) and 24 co-sponsors. If passed, H.R. 1776 would "require employees at a call center who either initiate or receive telephone calls to disclose the physical location of such employees." The bill was referred to the House Subcommittee on Commerce, Trade and Consumer Protection for initial debate and review.

The bill's proposed language, which could be changed during mark-up, says in part, "A United States corporation or its subsidiaries that utilizes a call center to initiate telephone calls to, or receive telephone calls from, individuals located in the United States, shall require each employee in the call center to disclose the physical location of such employee at the beginning of each telephone call so initiated or received."

To read the complete text of this story, go to "The Next Generation Contact Center Report" microsite at http://www.telecomweb.com/ccr. [note-registration is required but free].