The Danger Of Overseas Outsourcing
I was awakened this morning by a 5:30 a.m. telemarketing phone call. I didn't pick up the phone but had to suffer through a very long infomercial for the AlwaysOn conference blasting through my house. Having just recently been pitched by the business that is doing the telemarketing for AlwaysOn, I happen to know that the call was coming from India. Now I have no doubt that the same mistake could have been made by an East Coast telemarketing firm (of course the call would have still taken place at 8:30 a.m. at the latest), it is just another example of the difficulty of coordinating overseas efforts with efforts here in the States. There is no doubt that there are major cost savings from utilizing overseas labor, but the coordination costs (in terms of miscommunication, disjointed product management, loss of good will from awakening your potential customers at 5:30 a.m., etc.) may exceed the simple cash savings.
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Would it have been just as disturbing if you were making a call at 5:30 a.m. for some support related issues and you found that a support personnel was indeed available (though in India)?
There are two sides to the coin, I believe. Telemarketing is inherently dislikable and thus would cause the same kind of issues no matter where you have the call centers.
Also, coming to the outsourcing point, I think the single most important investment to be made while setting up a call center in a country like India, is to spend on a rock-solid process. Indians are, culturally hardworking but lack discipline (I should know, I'm one.) But once they have a process to work with, believe me, they would follow it...
Could it be that your experience was one of the statistical errors that can take place in any process ? The extra costs involved in overseas outsourcing are well understood, and are usually part of the cost structures of quality conscious overseas service providers. That is one of the reasons why the largest numbers of service providers that carry process quality certifications such as ISO 9000 and SEI-CMM are from India. That is also why such service providers cannot promise you the full extent of savings from personnel cost arbitrage, which can run as much as 80%. Usually you would gain 40-50% in savings, the rest going towards co-ordination costs (onsite managers, cross-border co-ordinators, telecom, process quality costs, etc). I help deliver offshore projects for my US clients, so I see much of this...
Congratulations! Someone finally understands the paradox of offshore development. It seems that most software people have forgotten Project Management 101 -- as the
lines of communication increase the project grows exponentially. Take those same people and locate them next to the customer and watch their productivity increase:
http://homepage.mac.com/sneiderhauser/offshore.html
I am currently for a company who outsource their software to an India company that is CMM level 4 certified and will be certified for CMM level 5 in August. They've been devloping an application for us for 4 years and have always delivered 100% bug free software. Let me tell you how they did it:
1. They constantly refuse to classify a bug as a a bug. They call it "customization"
2. They took two years pretending to set up a bug tracking database. Three times they declare it was done but it never worked. Finally every US application engineer is so discouraged and gave up. Well you can't file a bug against the bug tracking database, can you?
3. They punish their own software testers for creating tests that break the software. The reason is that they are writing test cases that was not designed by the developer of the original software, so they are not "following the process".