Offshoring significantly beneficial to UK consumers?

I had great fun in a formal debate at the ICS conference at Heathrow yesterday. We had to formally debate….propose, second, rebuttal etc….the motion that “This house believes that offshoring is significantly beneficial to UK consumers and has led to improved customer service”. David Williams and I had to propose and Graham Hoskins and Marie Cross opposed.

When asked to take part, I must admit I thought it a lost cause….particularly having gone thro a lovely banking example myself the other week. But never one to lose anything willingly, I tried without success to get the word “significantly” removed. Alas we would have surely won the debate if so, losing narrowly 60/40.

How did we get so close – apart from being the more charming of course?

Well first of all in talking to contacts, clients, outsourcers ( thank you all – you know who you are…) one quickly hears the arguments being used internally to defend, promote existing offshore facilities, be they in India, Eastern Europe or elsewhere. The problem was of course that there is such a body of prejudice built up through personal experiences. And there is precious little quantitative data that can be put in the public domain to overcome this.

The big problem with this motion was:
- The damage done to the offshoring industry by its over promotion in the early days and its inability to avoid horrible outbound sales calls which set the image of “indian call centres” some 7 to 5 years ago.
- A picture that badly informed and prejudiced press built up in the minds of the UK contact centre management in the early years.

Against this I started with first hand experience of the quality of intellect, the speed of change and the reality of economics of global companies in offshore centres in which I’ve worked or visited.

By the time I’d spoken to a dozen clients my motivation towards the motion was considerably enhanced. So here are some of the arguments - one sided admittedly.

Back office
The majority of offshoring is, by far, back office processes which have a much lower cost and higher quality standard (one example given was 98.98% accuracy in 8pt kanji characters) than can be achieved onshore. Hence customers don’t know it, but they receive a much higher quality of service from which they benefit in terms of accuracy, right first time, product pricing, 24 hour availability and turnaround times overnight.


Call centres are like wigs
It’s a myth that customers do not like offshore call centres. They do not like call centres full stop (youGov 2006: only 4% like call centres). Good call centres are like a “wig”. You never comment on a good wig because you don’t see it. You only notice bad wigs. (Thanks Bernard for that one)

Well run centres for UK consumers are some of the best anywhere
As consumers, we do not notice the significant benefits and the improvements to customer service taking place year on year - but which from my own and my overseas colleagues’ experience is some of the best customer service in any country

The furore has forced UK management to act – on and offshore
Poor ratings in the early days from offshore calls have forced UK management to properly understand what drives customer satisfaction and great customer experiences. Good management has stopped looking for simple linear answers and generic statements. This has led to a much fuller understanding of customer experience. The extent of this rise in quality can be seen by agents who are given a choice of working on UK or US accounts in captive and outsource sites – they want to work on UK sites where there is a better balance or quality and performance metrics not just efficiency measures such as handle time (source: UK bank)

Good resolution = no problem with offshore accents
Accent complaints are not linear. Above all, if a customer gets resolution then they will not complain about accent. If a customer doesn’t get resolution they will complain about accent and understanding. If they don’t get resolution they will complain about accents and understanding.

It isn’t worse offshore
Companies who are good at managing offshoring (and outsourcers if they use them) are achieving higher customer sat scores than they used to achieve onshore (source: IT and Insurance clients)

Older people like it
Slower pace, repeating statements to check correct information and more deference such as sir and madam go down well (source: insurance client)

It has to be better to be the same
The poor quality of offshoring calls in the early days was driven by poor UK management of the opportunity and poor selection of call types. Poor companies onshore got worse offshore in search of saving money. Good companies onshore got better offshore, as well as saving money. This has forced all companies, who offshore today, to meet exacting standards. A 10% higher service standard is needed above the same call from onshore to match UK consumer perceptions (source: measured data –insurer).

Surveys are nonsense
Many surveys are quoting that people would prefer not to speak to offshore, would pay extra to stay onshore. If you ask what someone will or might do it is very different from what they do do eg Netpromoter is an example has just been proven to be wrong and over simplified (Mori). So surveys that say 90% of customers would pay extra for onshore service are not translated into real customer behaviours eg Direct Line do not offer to charge you more

UK consumers are not easy
UK customers are not the easiest to deal with – they are more prejudiced and complain more about accents than customers from other English speaking countries (source: banking client).

UK consumers don’t speak perfect English either
It is a myth that UK customers are “BBC English” speakers - many offshore centres report that UK customers accents are far from traditional white middle class Caucasian. With 8% non native people in the work force, plus English people who speak a different language at home. English as a second language is spoken more slowly and is therefore easier to understand offshore staff (source: telco client / member of the audience).

Service that wouldn’t be included in the product otherwise
Lower prices to consumers thro reduced cost of service. And price and product score more strongly as Netpromoter drivers. Would mobile phone calls keep reducing in price to the same extent if it weren’t for offshoring of some processes. “The world is flat” argument that 20 years ago cheap nasty cars were produced offshore that nobody wanted but now the quality has risen and become part of the total brand eg Skoda. People buy Skodas very happily today when, if asked, they wouldn’t have touched one in the past.

More coverage
24 hour and out of hours support that wouldn’t have been affordable and therefore available is now available in some key markets

Market opportunities
Rising living standards abroad results in increasing opportunities eg McKinsey quote $1.12 return to the US economy for every $ invested and $0.33 profit to the Indian economy. In addition many global companies want toperate in the very large Indian market themselves.

Access to world class capabilities

Graduates who want to work, be accurate and build a career. The education level, the volume of people and the hunger to learn mean that companies can be much faster to change, more analytical and ultimately provide innovations that customers want more quickly. In growth companies this is a significant issue – accessing the best talent anywhere.

Capacity so you wait less time
Additional capacity is affordable to reduce queues in competitive markets

Whether you agree or disagree with these points, offshoring is unlikely to disappear. Certainly in the back office and in specialist vertical applications. And where UK management has the skill to manage offshore call centres well, it will remain for many suitable processes.

Nevertheless it will take many years before the ghost of the bad spam call from India goes away. Certainly there were two vivid and current examples given by the audience in the debate. That was enough to lose the motion !