I can understand why outsourcing and, in today’s global economy, off-shoring is so attractive to companies. I just wish that companies would think things through a bit further than the initial impressions of reduced costs.

Because I work for a company whose core business is IT managed service (but never referred to as outsourcing!), I’ll steer clear of my feelings on that subject – suffice to say that clearly there is a conflict of interest there. This post is purely about my experiences as a consumer of outsourced and off-shored services.

Firstly, although I have no direct experience of this, I’m led to believe that the cost savings from moving services overseas are generally not as great as they may initially appear. The workers may be paid less, and the cost of office space in India (for example) may be lower than in Western Europe but in call centre situations there are telecommunications costs to consider, as well as the inevitable integration of the offshore systems and processes with the rest of the business. I frequently have cause to speak to an IT service desk in South Africa and am rarely happy with the outcome. Sure, the staff are friendly and English is well spoken but the telephone line quality is inevitably poor. I don’t know if it’s routed via IP or over low grade international lines but either way it is not good for conversation. Even for software development, there is an implicit need for integration with other products and teams based elsewhere in the world. Technologies such as VoIP and web conferencing services may help bridge the gaps but in my experience, occasional face-to-face meetings are required in order to cement a quality relationship (and good relations really help to get things done).

Whilst I can see that there are some benefits to be had from off-shoring, near-shoring is sometimes seen as a more practical alternative (certainly, one of my previous employers had a relationship with a company in Eastern Europe for offshore software development rather than further afield). From a business perspective, it’s often a lot easier to spend a day or two in another European city than to fly several timezones away with all the complications that entails (jet lag is really not conducive to efficiency – as I found on a business trip to New Jersey a few years back).

Getting back to call centres, I’m not always pleased with my bank (First Direct); however one of the main reasons I stick with them is that all of their call centres are UK-based. The staff may have a variety of regional dialects (who doesn’t?) but English is their first language – complete with an understanding of all the nuances and colloquialisms that are in daily use. Even so, a few months back, I wanted to know the telephone number for a branch office where the paying in machine had crashed half way through my transaction (my money had been taken but would it be credited to my account?). This branch actually belongs to First Direct’s parent company, HSBC, who only publish a central number for branch contact. And where do you think the call goes to speak to someone in the next major town? Yep. India. Who couldn’t put me through to anyone local that could give me an answer – all I could do was wait and see if the money appeared in my account (fortunately it did).

I’ve just come off the phone from my credit card company (Marks and Spencer Money) and the only thing that keeps my custom there is the shopping vouchers that appear in the post every few weeks. All I wanted was a replacement card. After negotiating the inevitable IVR system I finally spoke to someone who was unable to help me because his systems were updating (and could I please call back later). After I said that they should call me (and he said he worked in a paperless office so he couldn’t make a note of my details to call back), I threatened to close my account (I meant it) and he transferred me to a colleague whose system could issue me a replacement card. Result. Except that it shouldn’t be this difficult and I shouldn’t need to be so stroppy.

To be fair, this could have happened in a UK call centre too. John Lewis Financial Services is based in Birmingham and I gave up getting a satisfactory response from them after problems with their Partnership card. Ditto for Halifax Bank of Scotland, who I hope never to do business with again (although that’s becoming increasingly difficult as they are so large in the marketplace). Even Volkswagen Assistance were unable to renew the breakdown cover on my wife’s car this morning because of a system being unavailable and asked me to call back later, although they were prepared to take a note of my number and call me (if only everything in life was as reliable as a Volkswagen). My point is, that if the call quality is good and the person on the other end of the phone wants to go the extra mile to deliver great customer service then I’ll be happy to continue my relationship and if they don’t, then I won’t.

In another example, my wife received a letter from her bank to say that as her credit card was coming up for expiry and, as she hadn’t used it for a while, they would close the account if they didn’t hear from her. That’s fair enough – customers who don’t use their accounts are bad business – but when she called to speak to them about keeping the account open (an opportunity to regain some lost business) she found herself on hold for so long that she decided that she didn’t want the account anyway! Similarly, I found myself on hold in Tesco‘s call centre phone system for so long a few weeks back that the cost of my phone call was greater than the cost of the product that I needed a refund for in my online shopping!

To make matters worse, many call centres only publish national rate (0870) numbers (and other non-geographic numbers that are excluded from bundled/low-cost call deals) – in effect, they can actually make money from you whilst keeping you on the line so, if you want to reduce your phone bill when calling non-geographic numbers for call centres, check out say no to 0870 for a database of alternative numbers).

In my view, it’s the cost of lost business that companies need to consider when selecting their partners rather than basing decisions on cost reduction alone.

Right, enough of being Mr. Angry – it’s a beautiful sunny day – I’m going to leave my computers and phone behind and get out into the countryside!