« Source like an Egyptian | Main | Time to put banking executives on trial? »

Feb 28, 2009


Feed You can follow this conversation by subscribing to the comment feed for this post.

While this is an interesting discussion, the real issue for most of the Fortune-1000 is that you can't force the genie back into the bottle. The offshore call centers in India and elsewhere are now integral parts of these companies' customer service organizations. For companies that are just starting to evaluate offshore call centers, the above discussion may be relevant, but for those who already have them, bringing them back onshore is an impossible cost-benefit argument to make.

While doing some research on the labor pool in Portland OR, a recruiter told me that a couple of research studies found that Portland people placed a "higher than usual" premium on civility and getting along. She couldn't cite the study, but she did say that was why Bank of America, Wells Fargo, Norm Thompson, and a few other places do have call centers here and the decision was driven by the local culture.

I'm not sure I could see that happening nationally, but culture (and microcultures) do count for something. As does good spoken English.

Our company, for many years now, has always advocated for the Captive on-shore set-up of Shared Services and BPO vs. Off-shoring.

This is great news that people and organisations are now beginning to see the true context of things and are becoming more proactive about captive on-shore set-ups.

As per the words of our Company's Mission: "If a Captive on-shore shared service centre truly achieves a defect-free and fully automatised status, there would be no particular reason for considering off-shoring solutions to simply achieve short-term sighted cost advantages without tackling the underlying People, Process and System quality challenges... These short-cut options can only be seen as easy escape-outs after having failed to successfully create a true fully defect-free and automatised Captive on-shore SSC."

We need to keep an eye on exchange rates to get a full sense for the potential here. Even if the commercial tax code is changed to make creating jobs offshore less attractive, if INR and PHP continue to lose against USD and GBP, offshoring can continue to make economic sense if done at scale.

It is certain that wage inflation in developing economies, combined with deteriorating standard of living in US and UK, will eventually create an inflection point for these types of services, but I think it's still 5-7 years away based on the cost disparity I see today.


The tax incemtives will surely drive most US firms to source cc work onshore. And I can't see a lot of UK / other companies going through the transition pain of moving work to Africa from countries such as P'pines / India, which are highly experienced and low cost when it comes to voice. The economy's too bad right now for many firms to take that risk, but can see firms in the future looking at some of these African locations. I'd see more interest in Northern African locations, such as Egypt, which support middle-eastern and European languages,


Interestingly, there was an news article on the bbc today about call centers moving from India to Africa. So they may not be coming home just yet - which is a pity!

I think in recent years outsourcing/offshoring has been considered to provide such significant gains to companies operations that the negativity such moves generated in the customer base was pretty much outweighed.

Now, with companies looking to trim excess capacity due to over supply and/or lack of demand see onshoring as a way not only to deal with that surplus but also to generate a sense of customer good will and a "patriotic" public image boost also (see United Airlines recent decision to bring back some of their roles to the USA from India for an example).

Whether any incentives to do this will come from the government, I don't know. However I think the positive image garnered by companies "onshoring" in the face of the current crisis will certainly sway other companies to do this.

Colm Connolly

Very sound and practical information. What is interesting is that with the advent of remote call routing technologies you don't even have to have a facility but simply a network. This reduces operating and personal commuting costs.

There was a time when we were considering the development of a linguistic frontend that gave the option to a caller which dialect they would prefer. This goes to show how much of a problem language was.

Still there are issues surrounding scripted response, solution attention and pricing that still needs to be arranged.

Excellent article. I think everyone's fed up with god-awful offshore call centers. If we can recreate new employement opportunities and improve the customer experience at little, or no, extra cost, I think we're all for that.

Whem we moved to Fort Myers in 1999, there were large call centers all over this part of Florida, including GE's F&A back office. Most all were gone by 2004, leaving behind a great workforce, low cost of living, and first-rate facilities at cut-rate prices, and that was before the recession. I'm sure our local Office of Economic Development would be delighted to work with any company interested in moving back office work to Southwest Florida.

The comments to this entry are closed.

Your email address:

Powered by FeedBlitz

Follow me on Twitter

    follow me on Twitter


    My Photo