CRM BUYER SPECIAL REPORT
Outsourcing Customer Satisfaction

As part of cost-cutting measures, more companies are offshoring their tech-support divisions. Customers of companies like Hewlett-Packard (NYSE: HPQ), Microsoft (Nasdaq: MSFT), AOL and Dell regularly route their calls to overseas help desks, often located in India.

Although training is available for these offshore personnel, many customers have grown unhappy with the communication issues that arise across continents, sparking a backlash that threatens to worsen.

Yankee Group analyst Phil Fersht told CRM Buyer that a great deal of hypocrisy revolves around businesses' decisions to outsource their help desks. "Companies talk about wanting to provide good customer service, but they're more concerned about cutting costs right now," he said. "Also, some companies get on their high horse and say they don't outsource to overseas companies, yet they outsource to companies that do."

Given all these difficulties, is overseas tech support worth the cost savings it can generate?

Customer Dissatisfaction

One of the most serious charges against overseas tech support is that customer satisfaction decreases. At the same time, a plethora of online bulletin-board posts express dissatisfaction with tech support in general, regardless of whether Mr. Singh or Mr. Smith is answering the phone.

But Fersht does note that miscommunication can crop up more frequently in cross-continental interactions. Tech-support reps who speak heavily accented English or, conversely, American customers who pepper their conversation with local colloquialisms have the potential to cause mutual aggravation.

"There are many issues like these," he said. "But it depends on how the vendor has approached training and what they're asking tech support to do."

Training Ground

Fersht noted that, if the support being given is at a simple, low level, fewer difficulties result. But if a support person is attempting to explain a complex procedure with hardware, frustration on both sides can ensue. Therefore, companies may experience fewer problems and greater benefits using offshore tech support if the training they provide is both comprehensive and taught effectively.

"It's a big issue how vendors are doing the transition from North American tech support to overseas support. Many times foreign employees 'shadow' a U.S. employee to learn the job. Other ways to transition quickly include doing the training by instant messaging or Web training," he continued.

"The company will really only see value in overseas tech support depending on how well the training is done."

Ingredients for a Backlash

The current debate about offshore outsourcing is not helping companies either, according to Fersht.

"Customers are definitely becoming less accepting as awareness of offshore outsourcing is increasing," he said. "The debate is reaching a fever pitch."

At a recent outsourcing conference, Fersht said he heard anti-globalization protesters chanting outside the building. This kind of anger could hurt companies that depend on overseas tech support, he explained.

"Companies are beginning to be scrutinized for customers on this issue," he said. "What may happen is that customers who are shopping around for technology may be put off by a company that uses overseas support."

Quality-Control Issues

Another factor in the decision to employ overseas tech support is quality control.

Yankee Group analyst Carrie Lewis told CRM Buyer that, many times, overseas tech-support representatives lack the vertical expertise they need to help customers.

"Offshore providers are a long way from getting expertise in certain areas," she said. "They need to focus on how to apply tech support to verticals and other specialty areas."

Quality control could improve, though, once call-center reps have a few years of experience under their belts. "Right now, these issues are being highlighted because these people have just been trained," fellow analyst Fersht said. "But as they get experienced, the quality [of their service] will get better."

Bottom Line

Despite all the obstacles to success , many companies nonetheless believe using overseas tech support is a good practice because it saves them so much money.

However, that attitude may change in the next few years. Stephen Lane, research director at Aberdeen Group, told CRM Buyer that one of the worst mistakes a company can make is to embark on an offshore strategy motivated solely by cost.

"It can't be done because of purely budgetary drivers," he said. "There's far too much involved to have that be the only reason."

Fersht said he believes that, even if costs are the only reason companies offshore their tech support, they eventually may decide to devote more budget resources to training overseas personnel more effectively -- or even to return their help desks to the United States.

"When you talk to companies that are outsourcing right now and ask them what their number one goal is, they'll say cutting costs," Fersht said. He expects this singular focus on budgets to be a short-term goal that will change in coming months and years.

"The gratification of cost cutting will lessen, and the same companies that made that such a top priority will come back and say that quality is their primary goal," he added.