The New Low Cost Outsourcing Location: USA?

When I had 4 people in 2 weeks confirm that companies have been shifting calls from Canadian outsourcers back to the US because the US dollar’s slide was making the costs of “near shore” outsourcing too expensive, I suspected something was brewing.  And yesterday, when over 400 people registered for our SSPA Webcast entitled “Onshore vs. Offshore Support: Why Domestic Providers are Winning,” I knew we had hit on a hot topic.

Our SSPA benchmark data shows that no matter how you slice it, satisfaction is higher with onshore service than with offshore service:

And, when you look at the elements of the interactions, the issues become even clearer:

While every element shows a disparity between onshore and offshore, the biggest difference is on Customer Service Skills.  Ten years into the outsourcing boom, every customer can tell you that accent, language and culture issues are at the core of poor satisfaction scores, yet companies still do not invest in the necessary training to overcome this obstacle.  And with the declining dollar making the cost/benefit even more narrow for outsourced support, I doubt we’ll see any big investments for more and better training in the near future.

In yesterday’s webcast (which will be available OnDemand in the next day or so), Citrix Online gave a case study of one of their customers, PlumChoice, a US-based tech support center for consumers and 3rd party support, who is seeing growing business as more companies concerned about the customer experience decide that quality is more important than cost, and are pulling offshore back to North America.  With costs rising for support in India, and relative costs in the US dropping, I expect we will see much more of this in 2008.

When trying to balance cost and quality in making onshore/offshore decisions, here are a few suggestions I provided on the webcast:

• Right Channeling.  Provide your highest value customers with the best service available; consider making routing decisions based on customer value or service contract level.  Also, we’ve seen companies have success (Semantic is a good example) offshoring text interactions (chat and email) while keeping voice onshore.
• Train, train, train.  If you offshore voice, invest in language/culture training.  Though high quality boutique outsourcers like e4e have ongoing language and culture training over a period of many months, the average (from some research I’ll be publishing in May) is one week.  Clearly one week isn’t enough.
• Invest in quality programs. Outsourcing doesn’t resolve you from responsibility for quality and operational excellence, and the SSPA members with the most success using offshore labor have executives and technical experts spending time in their outsource centers. Also, be sure to perform quality monitoring or supervisor silent listening of offshore interactions, even if you are receiving quality reports from the provider.

Have you considered a ‘backshore’ initiative? Are onshore service providers looking more attractive cost-wise?  Please drop me an email or add a comment.  And, as always, thanks for reading!

Explore posts in the same categories: Best Practices, Consumer Support, Enterprise Support

Tags: offshore, onshore, Outsource

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