Winning with Team USAWinning with Team USA

By Steve BrubakerSr. Vice President

InfoCision

Call Center “Outsourcing”Call Center “Outsourcing”

Offshore

or

Domestic (USA)

Business Week, June 21, 2004Business Week, June 21, 2004

Datamonitor: by 2007 16.1% of agent positions will be

outsourced offshore….

Datamonitor: by 2007 16.1% of agent positions will be

outsourced offshore….

Most Popular Offshore LocationsMost Popular Offshore Locations

• India • Philippines• Latin America• Caribbean• South Africa

Choosing an Outsource Partner Choosing an Outsource Partner

• Reasons are the same Offshore or USA• ROI• Experience & Depth of Management

Team• Quality & Innovation• Client References – Satisfied

Customers• Regulatory Compliance Expertise

The Cost Factor - R.O.I.The Cost Factor - R.O.I.

• Quality Communication• Regulatory Compliance• Consumer Privacy• Cultural Connection• Technology• Service Levels - Productivity• Travel and Relocation

Cost Savings in FocusCost Savings in Focus

• Significantly lower than anticipated despite wages at 10-20% of agents in USA

• Meta Group: Lower Productivity can add up to 20% in additional costs offshore

• Jim Poole, CIO of W.C. Bradley, told NewsFactor. "In terms of cost alone, outsourcing is a high-risk solution."

Cost Savings in FocusCost Savings in Focus

• Dane Anderson, program director for Meta Group , told NewsFactor. "You have to weigh the costs throughout the entire agreement - not just in labor rates."

• There is no such thing as a free lunch or cheap outsourcing, says Gartner. The firm predicts that 80 % of organizations that outsource customer service will fail to reduce costs.

• Business Wire predicted savings of 30%-50%, realistically come in closer to 15%-20%.

Losing Money by Spending LessLosing Money by Spending Less

Web.com • “Outsourcing the customer

support process may have resulted in a 3:1 savings in gross costs, but this was quickly negated when customers began leaving in droves due to the lower quality of service that resulted.”

Quality “Insurance”Quality “Insurance”

• Call Center Industry Created in the U.S.

• Partner with Experience• Convenient Access:

Personal Client Involvement

ComplianceCompliance

• No Shortcuts• U.S. Client is Liable• Significant Ongoing Investment• Risk Management

More Legislation InevitableMore Legislation Inevitable

Offshore Bills:• State Tax $• Economic Development

Incentives• Truthful & Immediate Disclosure

of Agent Location• Redirect Call to US agent if

asked

Privacy of Consumer DataPrivacy of Consumer Data

• Consumer privacy laws vary by country.• Offshore employees cannot be punished

for violating U.S. privacy laws.• When you work with a domestic call

center, you can be sure that your consumer data stays in the United States and is protected by American laws and law enforcement.

• Learn from other companies’ mistakes (Capital One, Conseco).

ID TheftID Theft

ChoicePoint and LexisNexis• US Laws do not apply to

information sent overseas to foreign-owned companies.

DMA Ethics Dialogue in Los Angeles • ID Theft was #1 concern

Communication and CultureCommunication and Culture

• 92% of U.S. consumers form their image of a company based on their experience with the contact center. (Purdue University, Center for Customer-Driven Quality)

• 65% of American consumers would alter their buying behavior toward a company if they knew it was using an offshore call center regardless of the level of satisfaction. (Purdue University, Center for Customer-Driven Quality and Benchmark Portal, Inc.)

Comprehension ObstacleComprehension Obstacle

• EDS UK - Warns companies transferring call centers to India risk alienating consumers.

• Rudy Oetting, “Heavy accents and improper English can be a major problem with offshore countries.”

Language usage and other cultural differences Language usage and other cultural differences

Information Week

What does “Yes” mean?• US – Person agrees• India – Understood what was said, not necessarily agreement

High TurnoverHigh Turnover

• Spectramind, division of Wipro, reported a 90 % annualized attrition rate

• PeopleOne Consulting reported that the pool of good candidates for call centers is limited.

The Management GapThe Management Gap

• “The major gap with most offshore providers is the lack of strong middle management. Because the industry is so young in these offshore locations, the depth of knowledgeable and experienced middle management is severely lacking.”

Jon Kaplan, TeleDevelopment

SecuritySecurity

• Since 9/11, concern for travel to countries in close proximity to instability, terrorism, or high crime.

• David Sims, according to XDNet India: Bangalore on radar of militant groups.

• Could American offshore enterprises become terrorist targets?

Customers Tell us What They “Really” ThinkCustomers Tell us What They “Really” Think

• Mike Budde, president and CEO of Advanced Data-Com, Inc. why his customers were unhappy with offshore outsourcers:• Extremely slow customer service response• Poor handling of data• Poor handling of file transfers• Lack of technical savvy, including inadequate

understanding of telephony and systems issues• Lack of Strong Management

TechnologyTechnology

• Technology is enabling companies to compete better on U.S. soil against foreign competition.

• IP Contact Center• Home and Virtual Agents• Better WFM, Routing and Self-Service

Technology

• Modern, flexible CRM and database products enable 360-degree knowledge of customers across all media points, leading to shorter call resolution and improved efficiency in agents.

The Greater Offshoring IssueThe Greater Offshoring Issue

• What is Long-Term Effect on American Standard of Living• U of CA

• Santa Cruz study

• Toyota• American Made

• Nobel Prize winner,

Paul Samuelson

The Reason FoundationThe Reason Foundation

Stop “Outforcing”

• High Federal Corporate Tax Rates

• A Faltering Education System

• Innovation Stifling Government Policies

Taylor Institute for Direct

Marketing

Taylor Institute for Direct

Marketing

By Dr. Dale LewisonChair – Dept. of Marketing

The University of Akron, Ohio