Burroughs moves call center back home
SOURCE: Detroit News
DATE: Feb 27th, 2010
An article recently published in Detroit News (LINK BELOW) , talks about how Burroughs Payment systems moved it’s call center back to Michigan. There have been a number articles and discussions recently on the trend on moving jobs back onshore from offshore locations. A number of firms are doing that, and should be doing that for the right reasons. In the case of Burroughs, as an example, if the front line of your customer interaction, the customer support team is not providing you answers you are looking for, the cost advantage goes away in a heartbeat and dilutes your brand. Not everyone may have the option like Burroughs does to have people who work on the machines they make to provide customer service but going the route to outsource should be a well thought out decision.
Transitioning any processes offshore is not an easy task and the companies looking to do that , have to have a realistic view and not the ‘vendor view’ of offshoring=cost savings. So planning for your offshore initiative and understanding the full cost structure and time it would require to get to your savings, and how it fits into your strategic vision is critical. If a company does it because it sees a quick return, the initiative is bound to fail.
For a number of firms which made the decision, looking for an easy answer to cost saving by moving work offshore, one of the realistic path may be to get work back onshore.
That being said, as Robert Kennedy, associate director of William Davidson Institute at the University of Michigan says in the article. “That does’nt add up to significant trend”.
I agree with his findings that the trend to get work back may see an uptick but will not be a major rush. Instead firms which are considered India centric will look for setting up more presence in the US and be closer to clients, and hire more local workforce.
For federal and state government work, it is already evident as a number of Indian vendors like Wipro, Infosys are setting up US based subsidaries to go after this work and go local.
1. WIPRO GOES TO WASHINGTON
2. INFOSYS SETS UP US GOVERNMENT SUBSIDARY
This debate is also not limited to US, but in UK where the federal government is trying to reduce their IT spend by as much as 3.2 billion pounds, outsourcing and offshoring in federal government projects is a key point of debate. Although UK has seen more government deals being done in ‘partnership’ with offshore firms.
The reality of the marketplace is that for firms looking to save cost, jumping right into offshoring without proper roadmap, overall business understanding and understanding the true cost is never the right approach. Offshoring could be an option but how you arrive at to go or not go that route is critical. As advisory consultants a number of times we have to also manage and challenge the expectations which senior leaderships, C-suite may have on offshoring.
We believe that outsourcing, offshoring, nearshoring, shared services, home shoring all these terms will continue to co-exist some as niche and some as mainstream commoditized processes. What is more important is for a company to decide what is right for them and have a realistic, fact based roadmap which they have to continuously monitor.
LINK TO ARTICLE IN DETROIT NEWS
Mohit Sharma is the CEO of Corrystone Global Partners. Corrystone is a specialized globalization firm providing advisory, education and staffing services to firms in US and India. We work with firms in the US which are exploring low cost options for IT, Business Process work and looking at ways to further optimize cost and manage operational risk. For firms based in India we help with marketing presence , M&A & client management services in the US. Contact us at info@corrystone.com to learn more about how we could help you.
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