October 2004

Offshore Versus Domestic: Pros And Cons
By Steve Brubaker, Senior Vice President, Corporate Affairs, InfoCision Management Corp.

In his September 2004 “Publisher’s Outlook,” Nadji Tehrani wrote that “some domestic companies are enjoying record sales and profits” despite the recent controversy over offshore call center outsourcing.

As one of the nation’s leading providers of call center services, InfoCision Management Corporation operates all of its centers in the U.S. We can attest to the truth of Mr. Tehrani’s statement.

The majority of media reports would have you believe that U.S. call centers sit silent and empty while American companies send all of their contact center work to India and South America. The truth, however, is that many companies are leaving their offshore outsourcing partners for domestic companies.

Why? Because we can provide them the peace of mind that comes with knowing their customers are satisfied, their programs are compliant with state and federal regulations, their customers’ privacy is protected and their calls are closely monitored.

By now, you’ve probably heard about Capital One Financial Services’ experience with Wipro Spectramind, a call center in Navi Mumbai, India. For two months, a group of 60 call center agents tricked U.S. customers into opening credit cards by offering false benefits, like free memberships and gifts. Apparently, supervisors in the Indian call center told the agents to embellish their sales pitches, and Wipro’s call monitoring system failed to recognize the inaccuracies.

Situations like these are less likely to arise in U.S. call centers because employees are more familiar with American laws and quality-control standards. Additionally, the close proximity between companies and their outsourcing partners allows companies to be more involved in their programs and maintain more control.

While this is the first publicized case of an organized scam conducted in an offshore call center, I believe that, over time, legal issues will come to the forefront of the offshore outsourcing debate, especially when it comes to consumer privacy.

Many countries do not have the same laws as the U.S. when it comes to protecting consumer information. What safeguards and legal recourses do companies have to prevent call center workers from stealing consumer information?

When you work with a domestic call center, you can be sure that your consumer data stay in the United States and are protected by American laws and law enforcement. You can also closely monitor compliance with state and federal telemarketing regulations.

E-commerce Times columnist Anthony Mitchell estimates that less than 12 percent of Indian call centers comply with state telemarketing rules. Mitchell has worked with the Indian IT industry for 17 years, and he specializes in offshore process migration and call center program management.

“Even though your own firm’s programs may be in compliance,” Mitchell asserts, “having out-of-compliance programs running in tandem at the same offshore facility presents risks of collateral damage in the event that enforcement efforts ever target that facility operator.”

Considering that fines for non-compliance can reach $11,000 per call, many responsible companies have chosen to outsource to domestic companies that focus on regulatory compliance. Others have switched to domestic centers because of concerns over quality control or customer satisfaction.

According to Workforce Management’s Matthew Heller, Conseco, Inc. sold its India-based ExlServices because customers complained they could not understand the call center agents, and Dell Computers pulled two of its products out of an Indian call center due to customer complaints.

It’s common knowledge that if you don’t take good care of your customers, they will leave. Companies that sacrifice call center quality for short-term savings in operations end up losing customers, and therefore profits, in the long run.

As more and more companies discover this, they are likely to redirect their programs from offshore centers back to U.S. companies that can protect them by focusing on quality, customer service and compliance.

Steve Brubaker is senior vice president, Corporate Affairs, for InfoCision Management Corp., an Akron, Ohio-based provider of teleservices.

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