Newsroom

23 Sep 2003

For additional information, contact
MJ Caliendo, 716-835-5041
copc@graytoncompany.com

Why Did CNN's Lou Dobbs Tonight Speak with COPC's Peter Bloom?

As the world's leading authority on customer contact center operations, COPC's global expertise was tapped for insight into the latest trend toward exporting white-collar jobs overseas, the focus of a week-long series on CNN's Lou Dobbs Tonight.

Peter Bloom, President and co-founder of COPC, was interviewed on Tuesday, September 23rd, bringing an expert opinion to the subject of offshore customer contact centers. Although the series, titled "Exporting America", concentrated on the negative impact of moving customer contact operations overseas, Bloom discussed the economic benefits inherent to both solutions, defining the factors that are integral to the decision making process.

The following is a partial transcript of Bloom's comments:

This is a much more complex issue than simple cost-cutting measures. There are significant advantages in each scenario, if the decision is based on service, quality and costs. The impetus for moving these jobs offshore is not just low-wages, rather the combination of mediocre quality and the inefficient service rampant in the U.S. contact center environment. The challenge for U.S. companies is to improve performance, not just cut costs. Analyzing accuracy and customer satisfaction levels in offshore facilities, one of COPC's client's operations in India has documented an error rate of nearly 50% lower than that of their U.S. operation.

Global competition, low wages, and a college-educated (contact center) workforce have driven many U.S. companies to locate their customer service operations offshore. Although today India is at the forefront of offshore activity, the Philippines, Caribbean and South Africa are growing markets offering an educated workforce, often willing to work for one-tenth the wages of their American counter-parts. These statistics, however, are a double-edged sword - contact center positions in India are considered coveted careers, yet the turn-over is three to five times the stated rate. This translates into additional training and replacement costs, and reduces accuracy. Through our operational audits we have also documented higher absenteeism, frequently reaching double digits, (two to four times the U.S. rate) again, reducing service and adding costs to the bottom line.

So, these facts beg the question, when does it make sense to offshore customer service operations? No business decision of this magnitude can be based on one component, even if that one component is significant cost reductions. Understanding the characteristics of the specific products and services is critical to determining the viability of an offshore customer contact center. The operations best suited to offshore are generally services that are rule based, scripted, or technical, typically related to processes that cross cultural boundaries such as banking or IT. On the other hand, customer services requiring problem-solving capabilities, in a free-form environment where solutions are not readily apparent on the system, are not efficiently transferred offshore. The more unique the product, such as healthcare, the higher the customer satisfaction level when the calls are handled on a regional or local basis.

The "offshoring" of customer contact centers is not a panacea for the struggling economy. The offshore solution is actually better than its bad press and worse than its good press. While "Exporting America" is causing great concern, the core issue of a global economy is better addressed by understanding all contributing factors, from cultural proclivity to cost reduction. In today's business climate, improving quality and customer satisfaction is essential, in the U.S. and overseas.