Signs of offshore backlash growing

As the trend of IT outsourcing continues to grow, organizations may find themselves traversing a tightrope between their customers and cross-cultural considerations.

It’s a lesson Dell Inc. is currently learning. The Round Rock, Tex.-based firm has been aggressively shifting its IT support to centres in countries such as India. But when Dell last November redirected some of its help support calls from call centres in Bangalore, India back to the help desks in the United States, it was a direct response to customer concerns.

Complaints about the quality of technical support caused the company to move support for its Optiplex desktops and Latitude notebooks back to U.S. call centres in Texas, Idaho and Tennessee, according to Dell. Enterprise customers not only complained about a difficulty in understanding accents, but also claimed that the support staff was delivering scripted responses and lacked the ability to tackle complex IT issues, apparently drove the decision.

“Corporate customers were telling us they didn’t like the level of support they were getting, and in the normal course of business, we made some adjustments,” a Dell spokesman said.

Dell quickly reacted to customer concerns to an outsourcing issue, but what, in general terms, can organizations learn from the Dell situation?

According to Gordon Brooks, president and CEO for, E5 Systems Inc. choosing what to outsource can be tricky. But as the head for the Waltham, Mass.-based offshore outsourcing vendor noted, if there’s no risk, there can be no reward. Brooks spoke on the subject in Toronto at the IT Services/Outsourcing International Expo last October.

It’s important for IT executives to learn the correct approach to understanding what, how and where applications should be outsourced, versus what is strategic and core to the organization, Brooks said.

In ensuring outsourcing success, enterprises should categorize their “application portfolio” into informational, strategic, transactional and infrastructure units, Brooks said. Once organizations prioritize their application areas as core, context or utility they can better make decisions on what should be outsourced, upgraded or managed in-house.

The issue is unlikely to fade away. As Framingham, Mass.-based IT research firm International Data Corp. (IDC) recently surveyed, by 2007 approximately 25 per cent of IT support and services will be sent offshore, up from five per cent in 2003. IT outsourcing is a natural fit for general commodity-type services. Where it gets tricky is when enterprises have IT issues specific to their applications.

The suggestion here isn’t that the offshoring concept doesn’t work, said Dan McLean, an IT outsourcing analyst for IDC Canada Ltd. in Toronto. Rather, it appears to be just a bad experience for Dell and one it should recover from. But particularly in the United States, where offshore services have replaced certain operational services the backlash has been loud, McLean said.

Experts note that a potential backlash exists from labour groups and worried customers who have put pressure on federal and state governments in the U.S., a few of which are contemplating legislation that would specifiy employees hired under state contracts specifically be American citizens or documented workers. “But over a period of time and for certain services, people recognize that it’s a better way of doing things in achieving cost savings,” McLean said.

In general terms, Dell’s plight is likely a cautionary tale for secondary help desk support, according to Toronto-based IT consultant Bob Fabian.

“First-level support should be fairly easy to handle because it’s limited scope, limited questions, limited response,” Fabian said. ” Second-level support, where you have to dig in and get into details you begin to know more about the person you’re dealing with because it’s a longer conversation, which tend to bring to the surface cultural differences.”

Cultural differences can be hard to bridge, Fabian said.

But most companies don’t worry about where the help desk is, so long as its needs are being met. The question is when does it make business sense to outsource.

The abstract concept of offshoring means it’s unlikely the government will step with heavy-handed regulation. “How do you even think about controlling what comes over a telecommunications network?” Fabian said.

The situation is potentially advantageous to Canada. Its close proximity to the U.S., relatively similar culture and low cost of doing business makes Canada all the more appealing for U.S. firms to outsource to, Fabian noted.

Many offshore call centres are tackling this head on and training workers to be more versed in cultural nuances. Techniques such as “accent neutralization” classes to outsourcing vendors providing employees with Internet access to local weather, news and sports information are being used to bridge the cultural divide.

Ultimately the onus is on the organization to determine if maintaining high customer satisfaction overrides the slightly higher cost of not outsourcing. There needs to be a balancing of both the offshoring risks and benefits. There’s no simple answer, McLean said.

But the bottom line, if the IT support on the other end of the phone can provide solid and in-depth technical help, “that’s worth vastly more than learning the latest football scores,” Fabian said.

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Jim Love, Chief Content Officer, IT World Canada

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