• August 2, 2004
  • By Coreen Bailor, (former) Associate Editor, CRM Magazine

As the Call Center Outsourcing Debate Turns

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Election day looms, and the fire surrounding the contact center outsourcing battle has been rekindled. Whether you side with the theory that offshoring is good for business or take the stance that companies are hurting the economy by relocating jobs out of the United States, it's important to keep abreast of new developments. Here, we take a fresh look at current trends in contact center outsourcing. According to some experts, companies are continuing to go ahead with their plans to locate contact centers offshore, despite the political clamor. "Most companies are expanding their offshore initiatives," says Jon Anton, Ph.D., director of Benchmark Research. It seems the biggest change is that companies are growing increasingly cautious in their decision to offshore contact centers, but are not necessarily keeping the curtains closed on the reality that they are continuing with their offshoring efforts. "Companies are not hiding their offshore initiatives," Anton says. "Agents are trying their best to speak 'real' English, and are mostly willing to tell you where they are located." According to Amit Shankardass, senior vice president of solution planning at ClientLogic, companies are adapting a business-as-usual approach: not publicly stating that they offshore, but not taking extreme measures to not divulge that they are. Other companies are now quietly expanding offshore, because of the "very negative PR value associated with offshoring of any type," says Chris Selland, vice president of sell-side research at Aberdeen Group. According to Steve Sacks, CRM global service offering director of EDS, lower cost structures open new business opportunities like providing more extensive telephone customer care: "Without access to global sourcing, such activities are often too expensive to be commercially viable." Norman DePalantino, COO of Epixtar International Call Center Group, concurs: "It just doesn't make good fiscal policy to continue to pay U.S. rates when service standards and metrics can be met at a much lower cost in countries that are accent- neutral, and view call centers as a career rather than stop gaps to something else." Cost minimization has been and will continue to be a key component in companies' decisions to locate their contact centers offshore, but firms should weigh other options to ensure that they make the right decision. ClientLogic's Shankardass recommends that companies examine five key tenets before offshoring: company type and image, consumer base, product type, cultural affinity/gap, and cost savings. With labor costs of about one eighth to one seventh, it can be "very enticing," Shankardass says, "but choosing to offshore or nearshore for cost savings only is wrong." This is one reason that "not everything is going offshore," Shankardass says. According to Datamonitor, although call center outsourcing is a growing trend, only 5 percent of the world's call center agent positions will be outsourced by 2007.
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