Is it the Management?

Filed in archive Outsourcing Issues on July 13, 2008

Photo courtesy of iStockphoto, Bruno Passigatti

In a recent article on Market Watch (link), Darrell Delamaide talks about the 2008 presidential candidate's view on outsourcing. Barack Obama, he says, is against giving tax breaks to those companies who outsource. John McCain says that outsourcing is good for the American economy. These positions aren't news, of course, but later in the article, Mr. Delamaide relates an interesting anecdote.

A "CEO who recently outsourced his customer call center and IT help desk to the Philippines" is described as saying that he did so because of the much higher efficiency of these providers, not because of lower wages. He pointed to quality metrics, such as Average Handle Time, as indicia of the improved efficiency of outsourcing.

The CEO then went on to say that he was impressed with the education of the call center personnel in the Philippines (all college graduates), and the "career paths" offered to these people. He also commented that it is difficult to find people "qualified or willing to do" call center work in the US.

But what is this CEO really saying? Assuming his call center and IT help desk operations were in-house prior to the sourcing, is he really saying that his employees were not up to snuff? Or, instead, was he inadvertently admitting that his company's management and HR policies were, in fact, deficient? I would venture to guess that poor internal management in his company, and many others may be at the crux of the matter.

It is difficult to assert that a university degree is a necessary prerequisite for call center work - as this CEO implies. It is also difficult to believe that in these difficult economic times, finding people "willing" to work is all that hard. However, because of often-poor hiring and promotional practices in major domestic employer, it is probably very, very difficult to find management with the skill and talent to mold a domestic call center into a coherent, fully functional team.

Recognizing that poor in-house processes and management are often underlying the incentives for outsourcing is important - both to properly analyze what to keep and what to outsource, and to properly guide and manage the outsourcing. I hope that Mr. Delamaide visits again with this CEO in about a year and gets his feedback - just to see if the value proposition sticks!