The Thorny Cultural Thicket of Outsourcing, Part 2

Many Americans have come to dread hearing a foreign accent when a customer service representative comes on the line, assuming that such agents will be ill-equipped to help them. In fact, as Part 1 of this two-part series notes, many would rather speak to someone blatantly rude or condescending than to a person whose English inflection differs from their own.

While companies outsource more and more for the benefits involved, customer resistance seems to be intensifying, and the cultural gap may be growing wider instead of narrowing.

Dell (Nasdaq: DELL) made headlines a few years ago with the announcement that it was bringing its Indian-based contact center operations back to the United States because of customer complaints of poor service. Since then, however, apparently unable to resist the lure of cost benefits, the company has sent additional operations -- including, yes, a contact center -- to India.

That earlier image of Dell pulling out, though, has become an oft-cited illustration of the problems a firm can experience when spinning off its business processes to a third party located in a different country.

To be sure, there will always be glitches in an outsourcing relationship -- but companies are learning that these problems may not be as difficult to solve as they initially may seem.

Don't Blame the Obvious

For starters, firms must ditch the concept that customer complaints arise from superficial or surface reasons such as having to converse with someone with an accent, says Patrick Morrissey, senior vice president of Savvion.

"Ultimately, if a problem gets solved, then the customer doesn't care where the rep is located," he tells CRM Buyer. Too often though, the problem that prompted the consumer to call into a center cannot be solved by the rep, because he or she does not have the necessary information, or the company has not mapped or provided enough guidance to its processes.

"It doesn't matter if the outsourcer is based in Russia or an Eastern European country or India," Morrissey says. "The real question is, does it have access to customer records, to the processes?"

It may be that the company does not provide such access because, well, the processes or customer database -- at least in consolidated form -- simply do not exist.

"One of the fundamental challenges of outsourcing -- leaving aside the cultural factor -- is that companies outsource processes that they are either not good at performing or are not core to their operations," Morrissey says. "Then the company decides that since it doesn't want to invest the resources to better develop these processes, it will outsource them --- or worse, pieces of them -- instead." Not all companies approach outsourcing in this fashion, he adds. Companies deploying best practices in outsourcing, though, tend to be fewer than perhaps expected.

Many firms are novices at this and still make beginners' mistakes, agrees Jonathan James, vice president of Syntel, an outsourcing company with operations in India.

"Forrester Research talks about penetration rate of 10 percent to 15 percent for the global delivery of services," he tells CRM Buyer. "The GEs of the world and their outsourcing strategies may get the headlines, but there are still a lot of organizations launching pilots." Syntel, for instance, "just signed a deal with a large insurance company last week. This is its first exposure to a global model."

A definition of the process -- starting from which division or unit "owns" it in the organization to identifying the roles each employee and/or the outsourcer must play to detailing procedures to escalate an issue up the corporate hierarchy -- is the essential first step any company that outsources a process must take, Morrissey says. "Once that is in place, you can hand it over to the outsourcer. And when you do -- make sure you establish specific metrics and service levels they are required to meet ahead of time."

Acknowledge the Cultural Divide

Of course, there will clearly be a cultural divide between a workforce in India or Argentina or Russia and one in the United States. Once the fundamentals have been established -- the who, what, where, when and why of the business process that has been outsourced -- then companies can address the cultural issues. The good news is that this piece is the easiest to handle.

"You definitely want to think about cultural training," James says. "Oftentimes, the client doesn't know how much training it needs until it gets into a project like this."

Syntel, for instance, offers videos explaining the differences in work cultures -- as a first step. It also encourages the client company to bring the outsourcer's project management teams to the headquarters, and vice versa. Once he meets these groups, he says, he tries to identify the person most excited or invested in the project. "Focus on those individuals and make them 'project ambassadors' representing each team," he advises.

It is equally important to choose an outsourcer that is a cultural fit with the organization, says Martin Migoya, CEO of Globant, a provider of software development and related services in Argentina. This is a rule of thumb for any business partnership -- but one that is often overlooked when outsourcing across borders, he tells CRM Buyer. It is safe to say that partnerships between laid-back companies and firms whose management style is buttoned-down usually don't work.

Most clients put Globant on a short list of prospects because of its open source technologies focus, he says. The most successful relationships it has formed with customers, though, tend to be with firms that are also attuned to Globant's cultural work style, which he describes as proactive and energetic.

All that said, a knee-jerk reaction against outsourced operations still exists in some quarters. Companies that do outsource processes need to be prepared to defend their decisions, Michael DeSalles, an industry analyst with Frost & Sullivan, tells CRM Buyer. "I advise clients to be ready to do a better job of telling their side of the story if and when a critic pops up," he says.

That may be easier than one would think, Morrissey says. "You ask most people what they want in a work environment, and they will tell you that they want to be surrounded by smart coworkers, and that [they want] their work [to be] meaningful." In this context, outsourcing becomes a tool for success , he says.

The Thorny Cultural Thicket of Outsourcing, Part 1