Serving Customers from Offshore

On September 3, 2012, in Outsourcing, by Business Development Group
However, despite the offshore outsourcing’s much-hyped cost benefits and other advantages, as well as the success stories of many companies reaping these benefits, offshore outsourcing has been getting a lot of bad press in the U.S. mainly due to issues in service quality, job drain, and language problems.

“Our research indicates the effect in most cases is significantly negative—but similar to the effect of outsourcing customer service domestically. That suggests companies shouldn’t necessarily forgo the savings they can reap from offshoring. But if they’re going to do it, they’d better do it right.”

To provide better service at lower costs, many companies have decided to jump on the offshore outsourcing bandwagon, shipping their customer support service— among other non-core business processes— to contact centers in offshore locations like the Philippines. Reports indicate cost savings of about 25% or more while primarily employing college or university graduates.

However, despite the offshore outsourcing’s much-hyped cost benefits and other advantages, as well as the success stories of many companies reaping these benefits, offshore outsourcing has been getting a lot of bad press in the U.S. mainly due to issues in service quality, job drain, and language problems.

Related article: How Offshore Outsourcing Affects Customer Satisfaction

In their article “How Offshore Outsourcing Affects Customer Satisfaction”, Jonathan Whitaker, M.S. Krishnan and Claes Fornell of MIT Sloan Management Review examined offshore outsourcing’s actual impact on customer satisfaction by analyzing the offshoring and outsourcing activities of  150 North American companies. They found that “those that outsourced customer service saw a drop in their score on the American Consumer Satisfaction Index, or ACSI, a measure created by the National Quality Research Center at the University of Michigan. The declines were roughly the same whether companies outsourced customer service domestically or overseas.”

Related article: Joe Fleischer & Brendan Read. The Complete Guide To Customer Support

The article went on to point out, “Our research indicates the effect in most cases is significantly negative—but similar to the effect of outsourcing customer service domestically. That suggests companies shouldn’t necessarily forgo the savings they can reap from offshoring. But if they’re going to do it, they’d better do it right.”

As it stands, a company has more to gain by opting to outsource to an offshore location— provided that they “do it right”.

Related Article: The Outsourcing Relationship: Visiting Your Offshore Outsourcing Vendor

 

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