To: Lizzie Tudor who wrote (10868 ) 3/31/2004 7:38:31 AM From: ChinuSFO Read Replies (2) | Respond to of 81568 Lizzie, here is something interesting.Outsourcing: No panacea, if it ever was A survey released last week found that most U.S. companies plan to outsource more of their back-office functions overseas, where labor is cheaper, despite a public relations backlash and weaker prospects for cost savings. About 86% of 182 U.S. companies surveyed plan to increase the use of offshore outsourcing firms, according to a poll by Chicago-based management consulting firm DiamondCluster International. But companies have lost the illusion of dramatic cost savings from outsourcing, the survey said, because managing far-flung international operations can be costly and difficult. They expect outsourcing to save only 10% to 20% of their costs, down sharply from 50% two years ago. Companies may decide even that price is too high if they read a new book by a University of Southern Mississippi professor who studied the call center industry for eight years. David Butler's book, "Bottom-line Call Center Management," examining the job that employs 7% of the American work force, hits print just as the topic becomes a political hot potato. "What CEOs don't tell reporters is that outsourcing is still experimental and the experiment may not be working," said Butler, who heads the international economic development doctoral program at the University of Southern Mississippi in Hattiesburg. "Overseas call centers can cost more in customer goodwill than they save in staff salaries." Many corporate executives who outsourced call centers to Asia confided to Butler that they are plotting quiet moves back to U.S. soil. They don't want to lose face by admitting errors. But they don't want to lose American clients who resent having customer service calls answered on the other side of the world. "The current political climate and terrible jobless numbers have made outsourcing a hot-button issue even for white collar professionals," Butler said. "Airlines, brokerage firms, banks and manufacturers need to look at call centers as part of brand imaging. Call centers are the continuous bond customers have with companies. Call center staff calm panicky customers with detailed advice. They help them choose new products. They create empathy." Butler cited a notable example of "call center repatriation" from last year. Dell (DELL, news, msgs) moved its call center support for corporate business from India into Texas, Iowa and Tennessee. Dell clients had complained some Indian staffers spoke with indecipherable accents and responded to technical questions with generic answers