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Taking Customer Service Offshore

Apr/May 07
Certain common denominators emerge when companies establish worldwide back-office and technical help operations.

"Outsourcing has traditionally been one of the options by companies looking to trim costs and reconfigure business models," says Shailen Gupta, an independent industry consultant who has worked with such companies as Sprint, Gartner, and Phase2Solutions. "[It] lets them focus on areas of competitive differentiation by moving non-core parts of a business to an outsourcing provider." With outsourcing, says Gupta, costs are changed from fixed to variable, and business services are performed by providers that have mastered processes and technology.

According to Gupta, wages of customer service reps in offshore countries can be 80 percent lower than their U.S. counterparts, and employees many times have better educational qualifications. Jobs that can be moved offshore range from lower-end inbound and outbound customer-contact services to higher-end technical support and value-added business processing.

Gupta suggests asking these questions when selecting a country: Can I really save 50 percent and maintain my current service levels? Can I overcome accent and cultural differences? Will the network infrastructure provide me the reliability my customers demand? A country analysis should begin, says Gupta, with the development of important criteria to compare the multitude of options. Criteria should also be geared toward relative maturity of the market, support by government, and infrastructure. It's also important to look at the scalability for expansion, according to Ajai Bhatnagar, principal consultant for BPO Consultants India, who suggests ensuring there'll be future space and manpower available.

A common mistake is "rushing off to a country without first doing your homework," says Bruce Rutherford, an international managing director of Jones Lang LaSalle. "We advise our clients that before they search sites, study the jobs and functions being offshored. Once you understand the talents, then you can begin to look globally to find the human resources with skill sets to be successful in those jobs with proper training." To avoid unhappy surprises when considering the real estate solution, he advises that it is central to not only negotiate the transaction carefully, but monitor the development's delivery process on a weekly if not daily basis.

India, the Philippines, and Ireland are chiefly considered by many companies. "The global hotspot currently would be the Philippines, which has seen over 60 percent in growth last year," says Anupam Govil, the founder and CEO of Global Equations, an offshore advisory firm. "It has an edge over India because of its track record in customer service, language skills, and affinity."

Some 70 percent of the contact center offshoring continues to originate from the United States, according to Rutherford, who further notes that the industry within the United States is contracting by only about 1 percent per year because most of the growth that the economy would otherwise create is being accommodated by offshore locations.

"Because of this phenomenon, English language skills are driving the location questions," says Rutherford. "India and the Philippines are hot locations for anything involving the English language, because customer interactions have to be conducted in strong English language skills." These nations also have populations with necessary or trainable cultural interaction skills. "One of our clients routinely trains for Philippine or Indian accents to sound exactly like American accents in only 11 weeks," he says. "Not only that, they learn major U.S. headlines."

Because English-language proficiency is such an important site selection factor, multilingual nations are highly sought locations. For instance, Switzerland has at least three dominant resident languages (Italian, German, and French). Belgium has two (Flemish/Dutch and French), as does Canada (French and English). Most workers in the Netherlands can speak four or five languages, including English, Dutch, German, and French. The ability of call center agents to flip back and forth to languages can't be overemphasized. If agents do not have to be retrained from the start, they are more cost-effective. A computer program recognizes the area codes and numbers, automatically routing the calls to certain cubicles.

On the North American continent, Canada is a bastion of call centers, and it is not rare for a major company's call center to have agents who speak Arabic, Italian, Armenian, Portuguese, Spanish, and Greek, along with English. Consistent currency exchange rates coupled with abundant qualified labor seem to be top deciding factors for this nation. And, to some degree, Mexico is also drawing call center activity. Border cities such as Tijuana and Reynosa, in addition to Mexico City, have attracted firms with plentiful labor.

Degussa, a global specialty chemicals company, recently bundled its Western European sales representatives in Zurich, expecting business volume at that center to reach more than $5 billion annually, says Volker Grunwald, the company's managing director. The European customer service center there will serve customers in Western Europe in their various languages. Degussa also manages some 260 sales representatives in Europe from the Zurich location, with accounting, personnel management, and reporting. Grunwald says that the area offers logistics and connections to the Euro traffic and transportation systems. The region's manpower is quite skilled and well-versed in foreign languages, he adds. Other advantages include flexible labor laws: "We depend on being able to respond flexibly to changes in the marketplace. Switzerland's labor laws and work climate give us this."

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