Tag Archives: nearshore

Technical Support – the Onshore, Nearshore, Offshore Debate

The move offshore to India and other low-cost countries started away back in the late nineties/early 2000’s and heralded an exciting downward shift in the cost of providing support to customers. But has it helped businesses, or hindered them?

For some, it was a brave step – offering 40-60% lower costs, graduate calibre staff, and an unimaginable number of native English-speakers willing to work in a contact centre. For others it turned out to be a step too far – regulatory issues, cultural conflict, and adverse customer feedback. Let’s examine what happened.

  1. There were evidently some questions unasked, or long-term thinking left for later. What happens as demand grows? As competition increased?
  2. Customers began to complain. Strong dialect was typically cited, however, this masked poor business processes, little customer empathy, cultural misalignment and many other fundamental things.
  3. Companies found it very hard to manage remote operations because of legal, commercial and cultural differences.
  4. Having gone straight to the lowest English-speaking labour markets, the evolution of support becomes less clear with many companies examining even lower-cost markets where English is an outcome of the education system rather than culture.
  5. And what about other languages? For some, good shoring options exist – Spanish and French, for example. For others, the options are more difficult to justify.
    Labour Market Forces
    Labour Market Forces

It’s not exactly rocket science to state that you can attract top talent when you offer relatively high salaries and a career in a limited demand market. But when demand grows, economic forces drive higher salaries for the same/similar talent or requires compromise in moving down the pyramid – accepting lower skilled, but more readily available people. This applies to onshore, nearshore (not so far to travel) or offshore locations.

Fast forward to today. Most shoring options are now stable and plentiful. Many of the companies that went offshore have closed or sold their own centres and outsourced customer service and technical support. Why? The business benefitted from outsourcers better placed to manage the workforce, willing to meet service levels and able to cope with rapidly changing local labour market conditions. For technology companies, outsourcing customer contact management became as natural as subcontracting parts production and product assembly. The outsourcer focusses on satisfying one of many business needs.

But there are other factors to consider. Today’s technology consumer doesn’t merit a one-size-fits-all approach to support. Low cost consumer electronics can’t sustain a high cost support model, so self-help, community forums and offshore resource options make sense. High value customers merit more attention because they are repeat buyers, spending more in each transaction. This doesn’t mean that offshore/nearshore = low skills and onshore = high skills. It does mean that what your business needs, and what your customers want, are unique to you.

Few companies have the resources to finely model their customer service operation themselves. At the simple end of the spectrum, it’s about the cost of skills and required effort to manage and maintain. At the other end, many factors such as business growth, economic cycles, talent availabilility, staff development, attrition, technical skills, languages, multiple communication channels, customer sentiment/opinion, and added-value make the model very complex. Multiple shoring options are a few of the gauges and dials an outsourcer has to finely tune to company current and future needs. Even technical support is no longer just that, but an opportunity to establish rapport with the customer to win more or repeat business in a tough market.

And then there’s the political pressure. President Obama’s speech last week referenced the repatriating of US jobs from other regions through tax incentives. Will these be enough to make a difference? Or is the tide turning for technology companies anyway, because of customer preference/pressure?

Where are you in the cycle? Considering offshore or nearshore? Been offshore and considering moving closer to the demand?