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Rich Tehrani

[March 11, 2004]

Offshore Outsourcing Makes Wall Street Journal Front Page



On March, 9, the Wall Street Journal featured two prominently located stories on call centers moving jobs offshore. The first article, Kentucky Answered Call of the Future -- But Got Bad News, (subscription required) was on the front page and discussed how Sykes Enterprises and John Sykes in particular received tremendous incentives to the tune of $7.6 million, to come to Appalachia . According to the Journal, Sykes then trained 3,000 workers and soon thereafter started to relocate jobs offshore, closing offices in Kentucky and Minnesota . Sykes Enterprises was accused of putting the incentive money they had received in their back pocket and running.

The next story titled, Press 1 for Delhi, 2 for Dallas, details E-Loan, a $6 billion dollar mortgage company that gives customers a choice of processing their loans in the U.S. or in India, where they will be processed up to two days sooner. A staggering 86 percent of home equity loan customers opt to go to India !

The Journal has done a good job of reporting on the offshoring phenomenon, but many news agencies dont understand the difference between outsourcing and offshoring and are lumping the terms together. This sets a dangerous trend of stigmatizing the term outsourcing.

If you arent aware, the general media such as CNBC, CNN, Fox and others are spending hours upon hours talking about how bad international outsourcing is for our economy and American workers. As an outsourcer, you know that to stay competitive, you need to explore your options and do whatever it takes to keep your customers happy. That may mean setting up centers in Mexico , South Africa , India and wherever else your customers demand.

With a statistic in the above E-Loan article stating that 86 percent of customers would trade US jobs for a few days faster loan processing, it should be apparent that customers prefer time savings and likely cost savings to keeping US jobs here.

In the past, I too have been critical of the offshoring trend and its role in the destruction of American jobs. It is apparent to me now that if U.S. outsourcers and others dont offer agents in less expensive countries, they will be uncompetitive and lose business to international competition.

The lost jobs argument is now front and center and we cant expect it to fade until well after the election, if at all. Over 250,000 contact center jobs have been lost to India alone in the last few years and the trend is just getting started.

The negative press being received by teleservices outsourcers and their corporate executives is staggering. Call center outsourcers, until recently, were the saviors of American jobs, filling job shortages in ex-manufacturing and ex-military towns. The tide has shifted overnight and we are now being targeted as the reason that American jobs are disappearing.

As an industry, it is imperative that we come together to discuss how we are portrayed in the media as well as how to make sure the media understands this important topic better. It is unacceptable to all of us and damaging to our livelihoods to see reporters lump outsourcing and offshoring together as the same practice. Furthermore, we need to be involved in the myriad legislative proposals that are earmarked for passage in Congress and various state capitals that will punish American companies hiring workers offshore. According to the Journal, dozens of such bills are pending!

The single worldwide forum where call center outsourcers worldwide may get together and discuss these and other crucial issues is the Global Call Center Outsourcing Summit (GCCOS for short), May 3-5 in St. Louis, Missouri. This is a crucial year once again for our sector. If we dont meet and discuss these issues face to face, we are likely to see that they will be decided for us. We welcome your participation and Nadji Tehrani and I are looking forward to meeting with the top management of all outsourcing companies again like we have done for two decades at our annual Top 50 and other awards dinners.

TMC and Customer [email protected] Solutions Magazine have been crucial resources, ranking, advising and promoting call center outsourcers for nearly two decades. We look forward to hosting you in St. Louis . Please visit www.tmcnet.com/gccos/ for more information or call 203-852-6800 x146.

Please talk back to me in our forums.

Rich Tehrani is TMC's president. He welcomes your comments. Participate in our forums.

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