disadvantage of outsourcing

[cv]

What are the disadvantage of outsourcing ?

Whenever I call a helpdesk or a customer support I KNOW I am connected to somewhere in India, I feel bad about the people loosing the jobs in the UK, US and mainland Europe because of this.

What I notice is that prices always go up. Companies fire employees out source but the savings seem to turn into profit rather than price reductions.

What are the disadvantages of outsourcing in your opinion ?

[cv]

Some disadvantages of outsourcing

1. Dependability on the source provider.
2. Loosing control over the service being outsource
3. Attitude of outsourcing employees, since they are not part of the firm they are serving they are not as loyal as real company employees.
4. Does it make long term sense to employ foreign people and sell locally ?

It seems that most companies outsource their helpdesk and IT services. Which other company departments are being outsourced ?

[Richard]

The only advantage I can see in outsourcing is that it enables you to gain access to a certain level of expertise without needing to employ a specialist department. I used to work for an oil company's engineering department and we only had a handful of engineers in-house. The rest were hired for the specific project and that went for other specialists such as document controllers and surveyors. The bizarre situation always arose that to a man, the specialists were being paid more than their effective line managers!

Outsourcing your customer services departments to a third party is potentially very damaging. Many times I've given what I think of are valid excuses and just been given a cursory and scripted reply (basically a brush off) when all I really want to hear is someone saying that "I know what you mean, I'm like that as well" because the Mumbai based operator hasn't a clue about British customer etiquette (basically indulge them and make them feel valued even though they haven't paid their bill for the last three months). Many large companies are turning away from outsourcing to India now for precisely these reasons. Try making a joke about Eastenders to someone who's never even heard of it, let alone seen it! I spoke to someone in an office in London on the day of the bombs and sympathised with him about not being able to get home. He was actually a debt collector but was still human!

[Cameron]

The question is whether outsourcing is good for "the common people." There are many arguments on either side of whether it's good for the common people in the country that lost the jobs (job loss versus lower prices), but one thing that's fairly clear is that if the "common people" includes the country that gained the jobs, and at the same time is gaining more of a middle class, outsourcing is very good for them indeed.

We've all had complaints with the quality of some outsourced work. But the good news is that market forces will take care of that, too, over time. Some American computer companies actually stopped outsourcing help desk work after getting enough complaints from frustrated customers who couldn't understand the people they were talking to.

In the end, outsourcing has onlly two masters: the market, and the political process. We can debate it all we want, but unless we think we can convince a majority of our respective countries' legislatures to pass laws against it, then we're at the mercy of the market.

And the market is just another way in which people vote. Companies that outsource either will be rewarded with more customers who like the mix of price and customer service, or they will be punished.

Vote with your wallet!

[Richard]

That's an interesting point that Cameron made there about US computer companies taking back their customer services departments because of comprehension difficulties. Many here won't like to hear this but anyone working on a helpline may like to consider it as it's a totally honest observation. Out of all the customer services and helpdesks I've phoned over the years, the ones that make me cringe the most are the ones staffed by Americans. US shops are known for their OTT approach to making sure the customer is satisfied (the have a nice day thing) but phone a help line and it's a different matter altogether. The ability to be simultaneously rude, humourless, arrogant and inept seems to be the major talent required to man a helpline in the US. There are some places in the world where you expect rudeness as being par for the course (1.55 pm on a Saturday in German department stores springs to mind!) but a "help" desk isn't the place for it at all.

Sorry about that, personal grudge satisfied!!