Outsourcing Times

Painful Problems, Difficult Solutions

Outsourcing is a pretty difficult subject – both for a firm as well as for the customer. For some reason, despite having been around for quite some time now, outsourcing is still viewed upon as a necessary evil by the firm and by the customer as something that is leading to the erosion of his/ her relationship with the firm. Is it really so bad? Well, we don’t need to look into the macro picture because we only want to deal with one issue right now – customer relations and outsourcing.

A recent survey found that an American consumer doesn’t mind dealing with a rude or even condescending customer service agent from the homeland. But s/he definitely doesn’t like one that speaks with a foreign accent. The survey conducted for NetReflector, a provider of customer feedback applications, showed that respondents were not so put off by agent rudeness or even by unnecessary wait time. What they couldn’t stand was the accented English. That makes one think if the problem really is the accent or something deeper, more foreboding.

The problem could lie in the fact that the outsourced rep may not be equipped to solve the customer’s problem. That’s not to say the rep is not qualified for the job, it’s just that s/he doesn’t understand the customer’s problem and hence cannot help the customer. Result – customer dissatisfaction. So how do you solve this simple yet pertinent issue? One thing is to better plan your outsourcing operations right from scratch. It isn’t enough to save money by operating out of a cheaper country. You have to make your reps competent enough to deal with clients.

If your firm has not yet begun outsourcing work, you must do a soul-search and check if you really need to outsource. Is there an absolute need for it and will the firm gain from it are questions that need to be answered.

Research Outsourcing Worries US Academic Circles

While outsourcing has been widely accepted as a necessary evil across the United States, there is one area, which is still held as sacrosanct in academic circles – research (where effective communicating and conferencing can be difficult across oceans). Now, there is growing concern that the US might lose its competitive edge by outsourcing jobs, which are on the bleeding edge of research to countries like India and China. DNAIndia.com reports:

University of Texas Professor Ted Rappaport’s research shows that all but five of the 57 major research initiatives announced were located outside the US. “The professor believes that as a result, US students have lost interest in entering graduate school to pursue research in the telecom field,” said the BusinessWeek column.

Read more: Research outsourcing worries US

Qantas Signs Deals With Indian Firms

Australia’s Qantas Airways recently announced a seven-year deal with Satyam, India's fourth largest software exporter. This deal is worth over $54 million. Satyam has to maintain information technology services and develop software for more than 150 applications for Qantas.

Another Indian firm Tata Consultancy Services (TCS) has also signed a $90 million technology outsourcing deal with Qantas. Under its contract with Qantas, TCS has to provide software services to upgrade airport operations and commercial systems over the next seven years.

This recent development clearly indicates that Indian outsourcing firms still have a huge lead over their counterparts in other countries thanks to the availability of skilled and relatively cheap manpower.

Deutsche Post To Move Operations To Eastern Europe

Deutsche Post AG plans to reorganize its financial operations and may outsource some of its operations to the Czech Republic and Poland. This move is expected to save 500 million Euro a year, according to Deutsche Post management. Forbes.com reports:

'We will make a decision in the next 12 to 18 months, where our accounting services in Europe are to be located,' Frank Appel, Deutsche Post manager for Global Business Services told the newspaper.

Read more: Deutsche Post to move accounting ops to Eastern Europe; save 500 mln eur a year

Bell Layoff Leads To Ugly Union Scenes

Outsourcing, while good for companies that receive orders, can be pretty ugly for laid-off workers of firms like Cincinnati Bell. The company recently laid off 45 workers, prompting a demonstration by union members. They are accusing the company of increasing its profits and executive pay at the expense of employees.

According to a Cincinnati Bell spokesman, the layoffs followed failed negotiations with the Communications Workers of America to achieve cost reductions by other means. The company is now proceeding with an outsourcing plan for certain support functions in the company. Employees of outsourcing firms will assume the jobs of mechanics, truck drivers, supply workers and clerks. News.enquirer.com reports:

The union also cited the irony of layoffs when the company reported $22 million in third-quarter profit and paid $1.6 million in bonuses to its five highest-paid officers. "The loss of jobs is inevitable," said Dottie Vories, a 16-year employee who was laid off Friday from her $22-an-hour clerical job in the company's Engineering Department, "but we were never treated with respect or integrity."

Read more: Union protests Bell layoff

Africa Is Next BPO Hotspot

Guess what, we’ll soon have one more continent to dislike and blame for all our ills. It seems the number of call center agents in Africa will lead global growth through 2010. This information was based on research by independent market analyst Datamonitor, which predicts a rapid growth in western investment in this region. Most governments and private sector firms on the continent are aiming to make Africa a Business Process Outsourcing (BPO) hotspot.

One main benefit African countries offer is price competitiveness. They also provide excellent language capabilities and agent sophistication. One of the most cited examples is that of Egypt. The country has managed to impress western investors with its mix of savvy and linguistically talented agents, and low costs. Now countries like Kenya, and Ghana among others are also following Egypt’s lead.

Sharp Initiates Reverse Flow

Now this is what I call a reverse flow. Sharp Document Solutions Co. of America, a division of Japanese consumer electronics maker Sharp Corp. recently announced its plans to establish a network of 20 branches in America over the next two years. Reuters.com reports:

It is forming a new division, Sharp Business Systems, which opened its first branch on Wednesday, in Phoenix, Arizona, through acquisition of local company Davidson Imaging Systems. It plans to open the other branches, in major U.S. cities, through similar acquisitions.

Read more: Sharp to establish outsourcing network in U.S.

India Still Preferred Outsourcing Destination

According to the Global City Competitiveness 2006 report released by offshore advisory firm NeoIT recently, the National Capital Region of Delhi is the best city in the world for offshoring or outsourcing business. Indian metros like Bangalore, Hyderabad, Mumbai and Pune occupied top seven positions followed by Ho Chi Minh City, Manila, Shanghai and Moscow. Financialexpress.com reports:

While Delhi with a score of 100 points topped the competitive index, Polish cities of Krakow and Warsaw ranked the lowest with scores of 70.6 and 71.1, respectively. Blasting myths of a Chinese threat to Indian BPO supremacy, the survey ranked only three Chinese cities of Dalian, Shanghai and Guangzhou as attractive for offshoring compared to seven Indian cities.

Read more: NCR, the best city for outsourcing in the world

Quality Test For Outsourcing Personnel

--By Priya Jestin, Staff Writer

Finally, you may get to hear some decent service. (Not that it was all that bad but well, it wasn’t too good either.) Recently, the main trade body representing software services companies in India announced that it would hold entry-level tests. These tests will help them gauge the capability of people seeking jobs outsourced by U.S. and other overseas companies.

This new move means two things. First that the Indian outsourcing industry is finally coming of age and secondly, that it has learnt to master the fast pace of growth. This recent move will help the industry tap new talent and cut the time and expense of recruiting new hires. This will help keep the industry churning and the economy growing at its present level. And it will help us consumers as well.

Admit it, outsourcing is here to stay. And we cannot always bang our heads in frustration when we realize that the guy at the other end hasn’t understood us or mistaken our request. We should welcome this new move because the industry finally understands the fact that there is a need to satisfy the consumer.

Candidates who pass this test will be regarded as having the basic skills to work in the outsourcing industry. However, this doesn’t guarantee employment. The test, to begin Nov. 18, is based on the Test of English as a Foreign Language (TOEFL) and the U.S. Graduate Record Examinations (GRE). The latter measures verbal reasoning, quantitative reasoning, critical thinking and analytical writing skills. The scores will also help recruiting companies screen candidates and determine their training needs.

The main purpose of this initiative is to counter a potential shortage of talent over the next decade. The test will help them tap new talent pools in relatively remote parts of the country as well.

Now We’re Outsourcing Drug-testing As Well!

Now every time you pick up that phone to call a help line, you probably wonder if your call will be routed to India. If you say you didn’t think of that possibility, you are only kidding yourself. The fact is that the names India and China have become a byword for almost all kinds of work. Now if this latest bit of news is to be believed, even the drugs we take will not be spared of the India/ China effect. How?

There is a very strong likelihood that these drugs will have been tested on people who live outside the United States. This means they live in places like India, China or Russia. I really don’t know if this is a good thing or a bad thing. But let’s face it. Human clinical trials are a necessary part of any drug’s development. Courierpostonline.com reports:

Big pharmaceutical companies are increasingly looking outside the country to find locations to conduct the human clinical trials that are crucial to the development of new drugs, according to Gannett News Service. Drug companies are finding it quicker, easier and cheaper to test subjects overseas rather than in this country, experts say.

Read more: Outsourcing extends to clinical trials