Posts Tagged ‘India’


by Oliver Schmid

 

What is outsourcing and why might outsourcing be good?

A medical transcriptionist working in a medica...

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  • Do you make your own shoes?
  • Do you deliver your own mail?
  • Do you sew your own cloth?
  • Do built your own car?
  • Do you build your own house … by your own hands?
  • Do you have the skills to be your own physician and make your own medication?
  • Do you grow your own food and raise your own life stock?
  • Do you take care of your own trash removal?
  • Do you …. (fill in anything you do not yourself) … ?

If you answered ‘YES” to any of the questions above you are outsourcing.

Anytime a service is provided for something you don’t want to do yourself, anytime somebody else does something for you, you don’t want or can’t do you are outsourcing something. Have you ever thought about this when you are complaining about that too many things and too much work or services are outsourced?

Outsourcing has been around as long as mankind. Anytime somebody realized that they have a special skill for something and focus on this skill and providing these skills to others in exchange for services, goods or money it is outsourced.

Why are we doing this? Because we always were aware of the fact that certain people have special skills one might not posses themselves and in return this person might have a skill somebody else does not have.

Outsourcing is nothing that was invented yesterday. What is new, is that we have realized people in other areas or countries have the same skills but perform these skills for a fraction of the cost. Before complaining about outsourcing think about whether the task on hand that is outsourced would be something you wanted to do yourself and had the skills to do yourself.

Think about if each of us had to grow their own food, build their own homes, remove their own trash, … you continue the list … would we still be able to fly to the moon, invent all the technological gadgets we have today that make our lives so much easier and more comfortable. Be honest to yourself. Most likely not.

By giving work and services away too others we  freed ourselves to learn other things, specialize and improve on skills we have as well as developing new skills.

Reflect on your daily tasks, your job, your kids, your family. Aren’t you performing outsourced services for them because you know how to do a particular process or task.

Over the years I have learned and realized that most of the tasks or work we outsource to other countries are things we really don’t want to do ourselves. I have worked for instance with domestic call centers just to learn that the people working there are not really happy in their job. They don’t want to listen to other people complaining. They don’t want solve other peoples problems. Eventually these people leave their jobs because they get burned out or fed up with what they are doing. Churn in US call centers is many times higher than compared to Indian or Philippine call centers. The reasons here for will be subject of another follow-up blog, since the subject is so complex in itself.

We only outsource work we don’t want to do ourselves or are not willing to pay for if it would be done in our own country (onshore outsourcing).

Without getting deeper into why we are outsourcing and all the plausible and less plausible reasons, ask yourself when hearing about outsourcing or complaining about outsourcing:

  • “Would you be willing to it yourself?”
  • “Do you have the skills?”
  • “Would you want to perform the same work for the same amount of pay?”
  • “Would you be willing to pay for the service if it would be done by what you expect a fair wage if you would do the same work? “

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by Oliver Schmid


A very large collections call centre in Lakela...

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Over the last 15 years I have participated and managed various different outsourcing initiatives. With the first undertaking, in 1995, I was involved in was the onshore or domestic outsourcing of a technical support group to a “local” call center. Eventually the whole project failed after approximately 18 month. This failure was not due to a lack of training, but rather due to churn at the outsourcing provider. They had such a high turnover of call center staff that the outsourcer was not able keeping up with training and retaining the know-how at the call center.

Subsequent studies and interviews with other organizations and 3rd party outsourcing providers I conducted, eventually uncovered that this was a common issue within the US call center industry. Being a call center agent that works in a support role can be a very demanding and stressful profession and there are not many people that can or want to be the ones dealing with other peoples problems, frustrations and complaints. It takes a special person to do that and still be able to remain calm but assertive.

Eventually the call center was pulled back in-house and we built a complete call center from scratch. Meaning we put the technology behind to support the call center agents, like a telephone system (AVAYA DEFINITY) that supported important call center functions, like:

  • call center monitoring application (BCMSVU) through wall boards and computer integrated telephony (CIT) as well as call center statistics.
  • Integrated Voice Recognition (IVR) application (PROLOGIX)

We implemented technology that provided call center agents the ability to log and research tickets, escalate calls to a higher level as well as recording calls for training purposes.

But the most important aspect has been that we hired people that fit the profile of a successful call center agent. People that did not mind dealing with other peoples problems. People that did not get upset about being yelled at or >on occasion<  being cursed at for no obvious reason, except the callers frustration that may or may not have been caused by the call center agent. It was important to support the call center agents in their task and function. The agents were given the ability to take frequent unscheduled breaks, especially after a extremely stressful call. All agents had the ability to conference in a supervisor if required, either through caller demand or if the agent thought it would be wise for conflict resolution. Call Center Agents were encouraged to talk to their supervisors and managers at any time if they needed to vent after a call or were in need of advise how to handle certain situations.

The call center eventually became very successful and was in operation for over 4 years with almost no turnover.

Eventually the organization increased its sales volume, which within a period of 2 years more than tripled, that the current call center setting just could not handle the onslaught of support calls anymore without increasing call hours and the number of agents. The budget in place did not support this.  Agents started to get burned out and leave, which in the long run led to not only a loss (call abandoned rate) of over 70% of all support calls but also tarnished the brand reputation.

Once more we looked into outsourcing opportunities. Briefly we evaluated nearshore call centers but came to the conclusion that this would not have been feasible since there would have been no cost savings and careful evaluation of these domestic call centers eventually revealed that they still had a fairly high turnover, which would have meant frequent loss of know-how and retraining (added cost).

We started to look into offshore outsourcing and what is the first country everybody thinks when talking about offshore outsourcing. Correct – India. We talked to call centers in India, talked to their clients and evaluated the supporting infrastructure (national telephone infrastructure in particular) in India. We also talked to some of our customers and their opinion if they would have to talk to a person in India and we discovered a resentment from our customers. This resentment mainly originated from the fact that they had to talk to a person with, as they perceived, limited language skills. Often these perception was based on a heavy Indian accent, even if the person had adequate verbal and grammatical language skills.

The fact is that most Indian people grow up speaking Hindi (or any dialect of it), while English is the secondary language and even with the most advanced training it is almost impossible for most of the population not to have an accent.

We then started to look into the Philippines as possible call center location. We performed the Philippine call center evaluation with the same scrutiny as we did with the Indian call centers and we learned that the English language co-exists with Tagalog or Filipino as official language and that English was already taught in kinder-garden. Filipino is an official language of education, but less important than English. It is the major language of the broadcast media and cinema, but less important than English as a language of publication (except in some domains, like comic books, which are meant to speak directly to the Filipino psyche) and less important for academic-scientific-technological discourse. (1).

Eventually, it was decided to outsource the call center to the Philippines. The corporate head quarter of this call center was  in the US (NJ). In a matter of fact this call center organization even operated its own LEC (LEBBSI a FCC 214 licensed carrier)(2), with its own fiber optics lines from the US (CA) to the Philippines. It allowed for 24/7 call center coverage while the call abandoned rate almost overnight dropped from 70% to less than 1%. Startup cost for the Philippine call center was higher than with an onshore call center, since we had to fly equipment and trainers to the Philippines for the initial training.

Many organizations make the mistake to walk away from their responsibilities once the initial outsourcing process has been completed and leave their outsourcing provider up to themselves. This often can have catastrophic results and may lead to a complete failure of the outsourcing initiative.

During my time of researching various outsourcing organizations and talking to not only their management boards but also to their floor supervisor and even some agents, I had learned how important an open line between the organization that is outsourcing  and its provider can be. After the initial phase we had a structured approach on dealing with the call center and issues that did arise. We had established frequent scheduled conference calls to deal with issues while still providing floor supervisors to call our internal resources direct if required. We established an escalation procedures which all agents and in-house staff was aware of. We provided frequent product training via video conferencing for new employees or if existing agents were not completely familiar with the product and its functionality. We had a complete line of our most sold products on the floor at the call center. This way agents could actually follow the customer and explain more accurate and provide better support.

Over time, as we learned and became familiar with the call center and as they became more familiar with our product the call center became more autonome  and more efficient. Over time we introduced more of our more complex products to the call center.

We provided the call center agents with incentives, like t-shirts, marketing gadgets like pens, note pads, etc. and we even provided for the occasional lunch or other social gathering, which became a huge success. We even learned that call center agents from other groups were eager to join our groups.

In a matter of fact we worked with 2 support groups. The first group was a group that provided very basic trouble shooting support based on a Top 10 trouble shooting list as well as up an cross selling, where the second group handled more complex problems that were escalated by the first group. When the second group was unable to help the call eventually came back to us for follow-up support.

This call center has been in place now since fall of 2003 and has been and continues to be very successful. Initially we were able to provide the increased (24/7 and almost no lost calls) support at the same cost as when we operated an in-house 25 agent call center.

This story demonstrates that outsourcing can be successful if done right.


Oliver Schmid  led and participated in other successful outsourcing initiatives, like:

  • Warehousing and Logistics to 3PL providers
  • Data Center monitoring and support
  • Data Center redundancy & sustainability
  • ERP Implementation Project Management and Coordination

Sources:

(1)  Wikipedia: Languages of the Philippines

(2) Cyber City Teleservices


Outsourcing-offshoring-resized

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Even the article ”

“Top 10 Risks of Offshore Outsourcing”

by ZDNET.COM is already 7 years old, it still contains valuable advice about offshore outsourcing. Many business are doing any of it and are wondering why their offshore outsourcing projects are failing or do not show the expected result or success.

Today while companies are struggling to reinvent themselves it is even more critical to have a structured outsourcing plan in place. A plan that everybody from the top down agrees upon and is able to follow. Not all organizations have the resources and/or skills and experience to do it right the first time around. In today’s economy it is critical that all aspects are considered and only a person with the respective experience can help to make an outsourcing task or project successful. Talk to somebody who has the experience and has this done already  multiple times successfully.


Oliver Schmid has extensive experience in offshore outsourcing to the Philippines, onshore outsourcing to Canada and domestic Outsourcing of matrix oriented call centers.  He is also versified in outsourcing of data center operations and data center monitoring and support. In addition Oliver Schmid participated in various 3PL and Supply Chain outsourcing initiatives.

Are you aware of the fact that offshore IT development outsourcing puts your software rights and confidentiality at considerable risk?

Why is this, you ask? Offshore developers are not bound by the laws of your business location. If your rights are not adequately protected these offshore developers may come back one day and demand royalties for their programs, even if you have paid in full for the software development. Usually in the US it is customary that such contracted work belongs to the end-client.

Under offshore outsourcing has no longer legal validity. Remember offhore developers are not bound by US laws and they may also sell the development at ay time to other organizations without your consent.

It is imperative to protect your intellectual property.

Similiar is valid to off-shore outsourcing of IT Infrastructure. It means somebody on the other side of the world has access to your systems and your data.

The loyalty of any employee within the outsourced provider is naturally not with your organization but to their own, if there is any loyalty at all. If outsourcing to countries like India there may be even some employees that hate you for your beliefs or the country you live or work in.

Due to geographical distance, difference and time and cultural differences there are many things you may not be aware of and don’t know. And what you don’t know can hurt you. I have heard stories of service providers taking whole systems hostage because a client did not want to renew or renegotiate a outsourced contract. You may be completely at the outsourcers mercy, if you are not able to retain some inhouse control.

And here again, remember: US Laws are of no help at this time.

You may say that there maybe laws in the country you have outsourced to that will protect you.

Do you know how enforceable these laws are?
Which actions do you have to take to have these laws enforced?
What is the cost involved?
Judicial systems in other countries and cultures work in different ways than in the US or in your country of business.
All this does not mean that you should not outsource and many companies have done so successfully. It simple means beware of the dangers and risks you are facing. Make sure that you have the necessary means to protect yourself and your business.

Outsourcing, whether onshore, near-shore or offshore done right can provide a huge operational and financial benefit to your organization. Before considering outsourcing, talk to an experienced consultant and also to a lawyer who has the expertise in regards to the laws and regulations in the outsourcing country of your choice.

Always remember to protect your 3 intellectual property rights:

Physical
Electronic
Legal
Don’t make the same mistakes other companies have made during their attempts to outsource and have failed.


Oliver Schmid has extensive experience in offshore outsourcing to the Philippines, onshore outsourcing to Canada and domestic Outsourcing of matrix oriented call centers. He is also versified in outsourcing of data center operations and data center monitoring and support. In addition Oliver Schmid participated in various 3PL and Supply Chain outsourcing initiatives.

Why wait until your job gets outsourced by your employer?
Outsource your own job and stay employed and in control!

Outsourcing, Insourcing and Saving MoneyOutsourcing means retaining the services from somebody outside of an organization to perform a task that would normally be done by somebody within an organization.  Saving money has always been one of the drivers for considering outsourcing. If saving money is used as the only driver, any outsourcing project will fail badly. There has to be a strategic motivation behind outsourcing in addition to save money, such as …

  • … increasing efficiencies. For example: Outsourcing customer support can provide the opportunity to increase customer service performance by offering extended support hours, adding a potential for increasing revenue streams through up-selling and/or cross selling.
  • … freeing up internal staff to concentrate more on the core competencies of an organization

For any outsourcing project it is imperative that all parties communicate their needs and requirements at all times. Outsourcing does not mean handing of a task, process or business function to a third party and then let leave them with it for all eternity without any follow up interaction. Outsourcing means interaction and communication between all parties at all times, whether it is during the planning and setup stage or whether it is an ongoing interaction after going-live.

Some great resources I recommend in regards to Outsourcing and how it can save you money and improve your overall business processes are: