Outsourcing (Merged)

[milefile]

The Arizona Department of Economic Security ousources many (if not all) of it's customer service jobs to India. The Arizona Department of Economic Security handles unemployment benefits, disabilty benefits, and the like. Can anyone explain to me how it is justifiable that if you are an Arizonan on unemployment, and need to talk to somebody about your benefits, your call goes to India, where people are employed by the very state that is paying you public funds for not being employed? Is there a way to see this as anything other than blatant mismanagement and stupidity?

Of course there are many other issues with outsourcing, so go ahead and discuss those, too, I guess.

 

[miata13B]

Originally posted by milefile
The Arizona Department of Economic Security ousources many (if not all) of it's customer service jobs to India. The Arizona Department of Economic Security handles unemployment benefits, disabilty benefits, and the like. Can anyone explain to me how it is justifiable that if you are an Arizonan on unemployment, and need to talk to somebody about your benefits, your call goes to India, where people are employed by the very state that is paying you public funds for not being employed? Is there a way to see this as anything other than blatant mismanagement and stupidity?

Of course there are many other issues with outsourcing, so go ahead and discuss those, too, I guess.

I am about to go off on this topic. The main reason why I lost my job with Dell was over outsourcing and moving the tech support department over to India, which then led to working sales for them, which also was affect by these Slurpee offering non-english speaking 2 penny an hour people stole from me. Yes I was working for an outsourcer. Bascially the corporations running any type of customer service are realizing that it is cheaper for them. It is bogus, because good working jobs are being replaced by people in other countries. It is a pile of Horse**** if you ask me. I will have more to add to this in a bit. . .

Oh, I have been working for outsourcers now for over 5 years. . .

 

[Danoff]

This is part of the problem caused by high income taxes, social security, and other burdens placed on corporations. If they can pay someone in another country to do the same job but that employee doesn't have as much overhead... that's what they'll do.

American employees have a government imposed disadvantage when trying to compete against Indian employees. The government should not impose that disadvantage.

 

[Duke]

It is the result of blatant mismanagement and stupidity, but not at the State of Arizona level. It's at the Federal level, where democracy has created such a perverse situation through all the mechanisms danoff mentions.

Having has technical support issues with my Palm handheld, I'm familiar with outsourcing from a customer's eye view. It is worse (but not fundamentally worse) than domestically located TS. The problem is one of degree - with foreign staff, the chances of your TS operator knowing anything outside the provided references are smaller. But I've gotten plenty of those Stateside as well. I'd say your chance slips from 3/5 to 2/5.

 

[milefile]

I've spoken with service reps in India, too. I had a new Dell that didn't work so I was on the phone with them every night for a week. I could tell when I was talking to India because of some difficulty in communicating on both ends, and poor phone connections. It was pretty annoying. I did hear that Dell has pulled out of India due to customer complaints. Or maybe it was Gateway.

 

[miata13B]

Originally posted by neon_duke


Having has technical support issues with my Palm handheld, I'm familiar with outsourcing from a customer's eye view.

The building I worked in had those technicians in it. . . just fyi nothing too important.

Originally posted by emad
Microsoft is the worst with the poor phone connections.

Same company, same building too. . .

 

[emad]

Microsoft is the worst with the poor phone connections. I was put on hold for over an hour and when they finally put me on the line, I couldn't hear half of what the rep was saying and the other half was lost on me through their inability to speak decent English. Had the connection been moderately decent, I would have forced them to speak in Urdu or something.

A lot of tech jobs have recently been being moving to Canada as well. Downtown Toronto alone has about 10 to 15 major animation studios that do work for companies all over Europe and America. ATI's headquarters is just 20 minutes out from Toronto and even Corel is based up here. There are countless more tech related companies in Montreal, Vancouver and Edmonton. Many of them do most of their business for US or European markets. Most companies that relocate up here do it because the US Dollar and the British Pound both have a lot of buying power here and because they don't have to worry about health care since it's government sponsored. Add in the fact that there's no language barrier and the fact that the government does nothing to prevent outsourcing and well...

 

[Slick6]

Originally posted by miata13B
I am about to go off on this topic. The main reason why I lost my job with Dell was over outsourcing and moving the tech support department over to India, which then led to working sales for them, which also was affect by these Slurpee offering non-english speaking 2 penny an hour people stole from me. Yes I was working for an outsourcer. Bascially the corporations running any type of customer service are realizing that it is cheaper for them. It is bogus, because good working jobs are being replaced by people in other countries. It is a pile of Horse**** if you ask me. I will have more to add to this in a bit. . .

Oh, I have been working for outsourcers now for over 5 years. . .

I wish you could have kept working there. Instead, during my 3 calls to Dell, over the last year I got the same guy twice and he sounded like he was from India. I could hardly understand him, and another time I got this lady that sounded like she was from China or something. I think that if you want these jobs you should be able to speak clearly especially if you're going to be instructing people when they're taking their pc's apart and are going to be touching parts inside.

 

[///M-Spec]

Pretty ironic, milefile. Smacks of it, in fact. But since I don't believe in unemployment benefits except in very specific cases, I can't say I find the same fault as you in that situation.

I think I wrote a while ago in another thread that I did not believe outsourcing is wrong or even unpatriotic. In short, a economy that behaves more efficiently (ie, getting the same job done for less money) benefits everyone in the long run.

I know this is no consolation to people like Miata, but progress happens. A economy moves forward and evolves. People need to as well. When the automobile came along, a carriage maker either started making cars or looked for something else to do.

Would you rather pay a dime for a tomato that someone had to plant, grow and pick by hand? Or a penny for one that a machine plants, grows and picks for 1/10th of the cost? Put another way, how'd you like to have 10 tomatos for the price of 1? Outsourcing is the same thing but on an economic level rather than a technological one.

The money that a company saves can go towards improving the product or hiring more people in a different line or giving the shareholders higher dividends and so on.

On the specific issue of Tech Support outscourcing to India, I don't especially like speaking to someone barely comprehensible for a complex software issue. One of our software vendors uses an Indian tech support staff. They are helpful, diligent and friendly--- when I can understand them. As a result, it takes twice as long for a call to be concluded because thats long it takes for us both to get our messages across. I see this as a simple quality issue, not a moral one. If Vijay or Shreedhar sounded like Joe or Mike on the phone, I'd have no problem. But like most things economic, it will sort itself out.


M

 

[miata13B]

Originally posted by ///M-Spec
On the specific issue of Tech Support outscourcing to India, I don't especially like speaking to someone barely comprehensible for a complex software issue. One of our software vendors uses an Indian tech support staff. They are helpful, diligent and friendly--- when I can understand them. As a result, it takes twice as long for a call to be concluded because thats long it takes for us both to get our messages across. I see this as a simple quality issue, not a moral one. If Vijay or Shreedhar sounded like Joe or Mike on the phone, I'd have no problem. But like most things economic, it will sort itself out.


M

You hit this one on the head, but not in the way you think ///M. In the Tech industry or customer service, or basically everything that deals with calling on a phone to someone, revenue is generated by either one of two things - The amount of calls - The amount of trouble tickets made per call. These calls taking twice as long might not specifically be saving this company money. Now, you have two techs, one in India and one in the US. The tech in India fixes 3 issues in an hour where as the tech in US takes 7 issues in an hour. Now with that, say the Tech in India over an 8 hour period is getting paid 1/2 of what the guy in the US is making. $5.00 an hour. The Guy in the US is making $10.00 an hour. The calls coming in make approximately $10.00 per issue. Do the math over an 8 hour day now. 24 calls in India producing $240 minus $40 for labor. 56 calls in US making $560 minus $80. I know the numbers are not exact. Possibly a little biased towards the US tech, but they even out in all honesty. The Outsourcers don't save money on the phone, they asave the money on middle management costs.

 

[///M-Spec]

Originally posted by miata13B
You hit this one on the head, but not in the way you think ///M.

Good analysis. Don't forget benefits, insurance, employment taxes, liablity, etc, etc. It HAS to be saving Dell money (or rather, they are CONVINCED it is saving them money) otherwise they wouldn't be doing it.


M

 

[miata13B]

Originally posted by ///M-Spec
Good analysis. Don't forget benefits, insurance, employment taxes, liablity, etc, etc. It HAS to be saving Dell money (or rather, they are CONVINCED it is saving them money) otherwise they wouldn't be doing it.


M

That is definately correct, but let me ask you a question. What would you do. You have two Companies, very competitive with each other. One outsources to another company and has just a little advantage on the price, where as the other company supplies jobs in your town. They are a little more expensive. Now I am not talking outrageous difference, I am talking maybe $5 for something that is up to $100, or $20 differnce up to $500, etc. . . Who would you purchase from?

 

[///M-Spec]

Originally posted by miata13B
You have two Companies, very competitive with each other. One outsources to another company and has just a little advantage on the price, where as the other company supplies jobs in your town. They are a little more expensive. Now I am not talking outrageous difference, I am talking maybe $5 for something that is up to $100, or $20 differnce up to $500, etc. . . Who would you purchase from?

I would buy the best product I can afford for the lowest price I can find. If the people in my town made the best product and it was marginally more expenseive, I'd buy it. If the company that outsources made a better, cheaper product, I'd buy it. If the outsourcing company made a slight cheaper product that was somewhat inferior, I would buy the local one.

Semi-case in point. I've bought my last 3 cars from the same dealership here in town. I know all the people there and receive a little special treatment. When I priced the ZHP, the place in Jacksonville (Tom Bush BMW) quoted me a much better sale price AND interest rate than the local place for the exact same car. Comparing the cost savings against that "warm fuzzy" I get from supporting a locally owned business, I took my business to Tom Bush. :shrug: That's life. Its not worth several hundred dollars over the course of the loan term to get the warm feeling.

When was the last time American Express took a smile and a hug over a credit card payment?


M

 

[miata13B]

Originally posted by ///M-Spec
I would buy the best product I can afford for the lowest price I can find. If the people in my town made the best product and it was marginally more expenseive, I'd buy it. If the company that outsources made a better, cheaper product, I'd buy it. If the outsourcing company made a slight cheaper product that was somewhat inferior, I would buy the local one.

Semi-case in point. I've bought my last 3 cars from the same dealership here in town. I know all the people there and receive a little special treatment. When I priced the ZHP, the place in Jacksonville (Tom Bush BMW) quoted me a much better sale price AND interest rate than the local place for the exact same car. Comparing the cost savings against that "warm fuzzy" I get from supporting a locally owned business, I took my business to Tom Bush. :shrug: That's life. Its not worth several hundred dollars over the course of the loan term to get the warm feeling.

When was the last time American Express took a smile and a hug over a credit card payment?


M

:sidenote: I know Tom Bush, I picked up a few VWs from ush VW up there : )

When was the last time American Express took a smile and a hug over a credit card payment? I thought they gave us the anal raping with no lubrication treatment. . .

Well, I see you point, but both companies are "outsourced" in this senario. You point is well taken, but I am a little more into supporting my local economy then I guess. If both products were equals and we are dealing with not too much money, exactly what I was talking about. I would definately try to keep others around me employed. If you loses jobs locally the local economy goes down and if it continues you are going to get to the point where that once "nice" area turns into "scum" world. I guess it is two different opinions. You obviously have had a lot more experience with things on this level then I have, and a little bitterness is in my part.


:edit: going to lunch, be back in an hour

 

[///M-Spec]

Originally posted by miata13B
I thought they gave us the anal raping with no lubrication treatment. . .

Yep. I spent a couple of years as Amex's prison b!tch. It still hurts to walk sometimes.

But my point is --when was the last time someone gave YOU a break on a business transaction just for being a local? Does Mom and Pop give you a "hometown" 10% discount? Hell no.

Originally posted by miata13B
Well, I see you point, but both companies are "outsourced" in this senario. You point is well taken, but I am a little more into supporting my local economy then I guess. If both products were equals and we are dealing with not too much money, exactly what I was talking about. I would definately try to keep others around me employed. If you loses jobs locally the local economy goes down and if it continues you are going to get to the point where that once "nice" area turns into "scum" world. I guess it is two different opinions. You obviously have had a lot more experience with things on this level then I have, and a little bitterness is in my part.

I like to support my local economy ...within reason. When a product is unique to the area, I will take advantage of that. (I eat a lot of seafood from Appalachacola Bay, for example. There is also a gourmet cheese farm near the border that my wife and I buy directly from) But there's no reason to pay extra for the same exact thing just because the guy down the street is peddling it.


M

 

[bengee]

I agree with M-Spec, but i would like to bring up another reason that I do not think of outsourcing as wrong (besides the obvious economic reasons for the companies that do so). If we stop outsourcing, we are going to take away jobs from other coutnries, correct. Well those countires will most likely react by boycotting US products, countries that consume plenty of American products. So in a way because we have already begun outsourcing we cannot cut those countires off without affecting our own economy.

I do think that there is a balance between the two sides of this argument that must be realized inorder for our economy to thrive. We can't fire all our workers and we do need more jobs as it is hard to find something to do for us graduating college (not to mention all those who have lost there jobs). But at the same time if the companies that hire us loose money by hiring us (we cost more and we could cost them international sales) their only option would be to return to an increased amount of outsourcing. Thus we think we are creating jobs but really we end up with less than we had to begin with.

I realize that if the current trend continues we are screwed but with an improved economy jobs will return. We cannot outsource everything; Americans need to work and I am sure that most CEO's and such understand that...

 

[milefile]

Americans need to work and I am sure that most CEO's and such understand that...

What makes you sure?

 

[Danoff]

We cannot outsource everything; Americans need to work and I am sure that most CEO's and such understand that...

CEO's are out there to make money just like the Americans who need to work.

Anyway I want to go on record as saying that I have no moral issue with companies outsourcing jobs and I will buy from them if I like the product. However, companies should be careful because their tech support has ticked me off in the past and they just might lose customers over it.

They're out to make as much money as they can and I try to get the most (including tech support) from mine.

 

[milefile]

Americans were told that only menial type manufacturing jobs would be sent overseas. This was all supposed to be great because it would leave the cushy, higher paying jobs for us. So everybody went and educated themselves for this new market. Now what so many people educated themselves for, namely tech jobs, are more and more being sent over seas. It seems like a raw deal to me. How many times in a lifetime should one have to re-train for a new career? In fact the entire notion of "career" seems to be becoming a thing of the past. Most people I know just have "a job", no matter how much they earn. Please note I am leaving my evaluation of this apparent fact out for now. But I will say: We work for money, and more.

My opening post doesn't really cut to the heart of the issue. It is, however, a prime example of government's idiocy and infuriating irony.

 

[///M-Spec]

Originally posted by bengee
If we stop outsourcing, we are going to take away jobs from other coutnries, correct. Well those countires will most likely react by boycotting US products, countries that consume plenty of American products. So in a way because we have already begun outsourcing we cannot cut those countires off without affecting our own economy.

I think you bring up a good point here, and a LOT of people forget or don't realize this. The money that flows to India doesn't just dissappear into a black hole.

Help the Indian economy by creating job opportunities means creating a market for more goods. Possibly American goods. I'm sure that gainfully employed Vijay will eventually want a nice home for his family, a plasma TV, fast computer, comfy shoes and a pimp ride he can cruise around in. Guess what? AMERICA MAKES ALL THESE THINGS. Have you seen some of those cars they make in India?

As I've said before, wealth isn't like a pizza. It is more like water. You can waste it, but you can't destroy it.. it has to go somewhere eventually.


M

 

[///M-Spec]

Originally posted by milefile
My opening post doesn't really cut to the heart of the issue. It is, however, a prime example of government's idiocy and infuriating irony.

Here's another infuriating irony: have you ever looked into Federal agriculture policy? Here's how it works -- the government fixes the price on virtually all farm products, so if a tomato's real market value is 5 cents a lb, you still pay 10 cents a pound. This is to create a 'stable market' for vital food products.

Then, in order to make sure farmers don't overproduce and drive market values even lower, the government PAYS FARMERS NOT TO FARM ANYTHING in certain portions of their land, using --yep, you guessed it, your money and mine.

There are porn stars that don't get screwed in as many orifaces as we do everytime we go to the grocery store.


M

 

[///M-Spec]

by Miata13b
Well, I see you point, but both companies are "outsourced" in this senario

Oh, by the way, what do you mean both companies are "outsourced" in my car buying story?


M

 

[miata13B]

Originally posted by ///M-Spec
Oh, by the way, what do you mean both companies are "outsourced" in my car buying story?


M

It is a "what if" not a reality. . . I guess my context needs a little polishing. . . sorry mate.

 

[miata13B]

Another great benefit and feature of Outsourcing : ) The Eternal Loop of customer Service / Tech support / sales / customer service, trying to find the proper division to go to for importing and exporting dealing with NAFTA rules and a loophole found by a government agent that might bring your wonderful company to bankruptcy. It has been a wonderful outsourcing day for me : )

 

[emad]

sorry for bringing this up but I thought this was hilarious

 

[GilesGuthrie]

Originally posted by miata13B
You hit this one on the head, but not in the way you think ///M. In the Tech industry or customer service, or basically everything that deals with calling on a phone to someone, revenue is generated by either one of two things - The amount of calls - The amount of trouble tickets made per call. These calls taking twice as long might not specifically be saving this company money. Now, you have two techs, one in India and one in the US. The tech in India fixes 3 issues in an hour where as the tech in US takes 7 issues in an hour. Now with that, say the Tech in India over an 8 hour period is getting paid 1/2 of what the guy in the US is making. $5.00 an hour. The Guy in the US is making $10.00 an hour. The calls coming in make approximately $10.00 per issue. Do the math over an 8 hour day now. 24 calls in India producing $240 minus $40 for labor. 56 calls in US making $560 minus $80. I know the numbers are not exact. Possibly a little biased towards the US tech, but they even out in all honesty. The Outsourcers don't save money on the phone, they asave the money on middle management costs.

I'm not so sure about tech support, but I know that for programmers, the 50% estimate here is way off. Think 10-25%. You can't get a decent ASP developer in the UK for under £25k, in India they're £5k. And the property is immensely cheaper too, as is the land. In the UK, you pretty much can't buy land for commercial use any more. You have to lease it, and usually at something exhorbitant like £30 per square foot. So, to house 100 programmers, you need approximately 1000 square feet, which equates to £30,000 in leasing costs alone. You could build a proper office of 5,000 square feet in India for that cost, and the Government there will pretty much give you the land. Think £100k for a start-up site there. You make your money back in 3 years, after which time you actually own the property.

 

[///M-Spec]

Originally posted by GilesGuthrie
You make your money back in 3 years, after which time you actually own the property.

Zounds. I need to start a company in India.


M

 

[GilesGuthrie]

My company does a lot of its coding offshore in India. All the Helpdesk stuff is done in Wales (which they refer to as 'near-shore').

The view is that all the account management can be done by the Western-based teams, and all the project management also. Just the coding is shipped offshore.

But they don't drive the ships so well around there, which can have implications for the data cables running under the Indian Ocean.

When it's all working right, the economics are unbeatable. The issues begin when things start not to work.

 

[Philly]

What does everyone think about it?

I personally hate it. First, it moves jobs that could potentially be held by Americans out to different countries. This leaves Americans without employment. Yes, it may be cheaper to employ people in India to take our phone calls, but isn't it better if we kept that money in the US? If that money goes right back into our economy, doesn't that help us more in the long run?

And then there is the language. It's one thing to go into your local Subway and have an immigrant worker behind the counter who can barely speak english, but every customer service call you make? I had an hour long conversation with some Indian as I tried to follow her instructions to fix a problem that was something other than what she was trying to fix. Does that help anybody out? I want to be able to understand if I'm trying to get help.

How about the people employed by the American companies? Do they make reasonable money? Can they afford to live a reasonable life style, something acceptable for the job they're getting paid to do? Are we taking advantage of them? At our own loss?

Is outsourcing really all that great?

 

[Sage]

I have no moral or socioeconomic complaints about outsourcing, but I do think that it’s unwise for companies to outsource tech support jobs, because the Indian guy reading the training manual on the other side of the phone usually isn’t telling me anything different than what I could find in my own product manual or on the manufacturer’s website. Again, I couldn’t care less about the economics of it, but I think companies will eventually realize that they’ll have much happier costumers if the tech support people are US-based and properly trained.