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Outsourcing: The Unspoken Costs


Outsourcing seems to be the new-new thing and approximately 50% of our major corporations are doing it. What are the costs? The benefits? And what skills need to be managed in order to make it work optimally?

Let's get a clear understanding of what we mean by outsourcing: it's the shifting of easily codified jobs - such as help desk support, call centers, system maintenance, and programming jobs - to countries that can manage them more cheaply.

While this function is allegedly freeing up our people from some of the mundane tasks of our workplaces, it's bringing with it an entirely new set of problems: how do we manage people across continents; how do we know our brand is being maintained when we have no direct control over managing foreign employees; how do we restructure our workspaces once our lower level jobs are farmed out.

WHAT ARE THE COSTS OF OUTSOURCING?

John Ribeiro in a recent article in Darwin, states: "According to the National Association of Software and Service Companies (NASSCOM)? outsourcing to India has saved the U.S. banking industry $6 billion to $8 billion."

Indeed, I've heard it said that the only reason American companies are outsourcing work is to save money. Let's take a brief look at the pros and cons of the financials for a moment:

Cost savings: mainly in the area of salaries and management time.

Additional expenditures: vendor selection (legal, travel, time), exchange rates, training, time lag issues, client retention, management or techie retraining.

One of the costs I've heard discussed is the human cost: that company employees get resentful when their job descriptions get changed, and have a period of time where they suffer resistance. Eventually, they do come 'round to recognizing that they are being given higher-value tasks in place of their old work - assuming that they even desire new tasks and don't end up quitting. There don't seem to be any figures available on this cost.

But there is an additional, unspoken cost. Our relationship with the end customer.

We've all dealt with service people from India when we call to ask a question of a vendor. First there is the long, long delay before the phone gets answered. And then there is the accent.

Are the service reps and techies smart? Yes, they are. Are they smarter than Americans? It depends on the person. But they are always cheaper. Do they do the job? Usually. Depends on how well they've been trained and managed. They certainly know what to say, how to say it, how to answer questions.

But what about brand management? Do they give the identical service that the company espouses in-house (or, um, in-States)? The answer here is, generally, 'no' and deserves further discussion.

HOW DO OUTSOURCED REPS DELIVER BRAND AMBASSADORSHIPBecause lower-level jobs are being filled by people who speak English as a second language, AND who have not had the appreciation of 'service' instilled in them since birth, these foreign reps will, at best, do a technically good job. Say what you want: we Americans are raised understanding that we must serve customers and must be served by vendors. People in India are raised to believe they are a replenishable commodity.

Unless trained to do so, the foreign workers will NOT carry the company standard, and in a problem situation, may run. I've had several people hang up on me when it became clear that my problem was more complex than they could manage.

Do I shrug, and say, "Oh well. He was Indian. He didn't know any better." Or do I say, "Why isn't ABC Company giving me the service they promise on their ads?"

Every single person who works in a company - Every. Single. Person. - is a company's Brand Ambassador. That means, those young Indian people living in Bangalore (I've been there. Outside of the pollution in the city, it's lovely. Smells like sandalwood throughout the villages.) or wherever, must act exactly like the people you have in the States. If you don't, you are not managing your brand appropriately.

And therein lies the largest problem created by Outsourcing (other than taking jobs away from an already depleted workforce here in the States): how do American managers effectively communicate with the foreign providers who are answering our phones and doing our programming? How do we make sure that the way we treat customers here in the States is the same way we treat customers in Malaysia, or wherever?

What is our brand? And how do we manage the brand over time and through space?

We need to create a new way to transfer skills and beliefs across continents in order to ensure that our brand is represented effectively in every client interaction. Every client interaction.

BELIEF AND SKILLS TRANSFERFor some reason, some companies still think their 'brand' is a visual logo rather than a complete relationship and story. Our brand is the story we tell about ourselves to our customers (defined as employees, vendors, and purchasers of our products) and the relationship we have with all of them. Think about Harley Davidson: somehow they manage to get people tattooing the brand on their bodies! Think about Apple: they've taken their IPOD and created fabulous ads that make us get more atuned (ahem? sorry) to what their brand is: cutting edge, different, funky, creative, and funfunfun. Not to mention that the ad itself makes me want to dance - and then dance to a store and buy a new MAC. (Note: their website does NOT maintain their brand, however.)

OK. So we've got this story and this customer experience in our States-side company, but we don't have the way forward to ensure we duplicate this with our Outsourced employees.

I recently met with a new client team as they were incorporating an Indian vendor's offering into their roles. They had spent 4 days together, aligning their outcomes, working relationships, communications, and jobs. Their mission statement was the same, their company vision. They had me in to do a final check.

I began by asking the new vendor what his job was: to hire the best techies around. Good. What else? Well, what else is there?

"How do you plan on managing Company X's brand?""What do you mean? All I have to do is hire the right people. After that, they're on their own.""Really! And how are they going to be managed daily? How will you ensure that the service they offer in the States will be the same service you offer from here?""John (the tech manager) will manage it.""John, do you recognize that as one of your new jobs?""Um, I guess I hadn't."How will the customer's specs be delivered? Will the Indian tech folks speak with the customers directly?""No.""So, how will the information be transferred across the sea?"

You get the point here. They hadn't thought through all of the daily dynamics. Within an hour, no one knew their jobs or their roles, people were switching job descriptions on one hand, and recognizing new, unspoken, aspects of their jobs on the other.

This is a small company. It's highly likely that larger, more experienced companies, know how to ask all of the right questions to get it right from the start. But how many don't?

Have your internal and outsourced teams design communication systems that will make it viable to ensure all aspects of your brand get carried through from one country to the other. Make sure it's seamless - that all customers get treated exactly the same, regardless of where your support staff sit. Make sure that the folks who are giving work up to the outsourced people will take responsibility for it, and be happy with the new work they'll be undertaking.

It's not ok just to manage the vendor by choosing wisely. It's imperative you have a hands-on relationship with each employee, regardless of where they sit. Remember: they are all your customers.

Sharon Drew Morgen is the author of NYTimes Best Seller Selling with Integrity. She speaks, teaches and consults globally around her visionary sales method, Buying Facilitation.

http://www.newsalesparadigm.com http://www.sharondrewmorgen.com 512-457-0246 Morgen Facilitations, Inc. Austin, TX


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