Dell Shows How Not to Offshore
The widely-publicized decision by computer giant Dell to repatriate its corporate customer tech support from India to the US may be a textbook example of how not to apply offshoring as a management strategy.

CNN.com, citing an Associated Press story reported Tuesday. Nov.25 that corporate owners of Dell's OptiFlex desktops and Latitude laptops will no longer be serviced from the maker's Bangalore, India call center. Instead their contacts will be answered by agents in Idaho, Tennessee and Texas call centers.

"Customers weren't satisfied with the level of support they were receiving, so we're moving some calls around to make sure they don't feel that way anymore," Dell spokesman Jon Weisblatt told the AP. He would not discuss the nature of the dissatisfaction with the call center in Bangalore.

But Suresh Gupta, founder of offshore consultancy, The Paaras Group (Harrison, NY) and a leading authority and speaker on offshoring told CommWeb that Dell apparently did not develop a well thought out contact center strategy.

"This is a classical case of viewing offshoring purely as a cost-cutting move instead of as a part of a broad-based global sourcing strategy," says Gupta.

Among the errors: Best Practice firms don't use offshore centers for handling premium customer contacts.

AP/CNN reported that corporate customers account for about 85% of Dell's business, with only 15% coming from the consumer market.

Also, Dell may have trained the agents in speaking in less accented English but apparently failed to recognize the cultural nuances, says Gupta.

AP/CNN reported that some U.S. customers have complained that the Indian support reps are difficult to communicate with because of thick accents and scripted responses.

An investment banking client mentioned to Gupta recently that in India you would think that Indians speak English but often the words they utter have different meanings.

Dell's cost-cutting penchant may hurt it at home. Dell's customer contacts coming back to the US raises the possibility of a new call center to handle them.

But sources acquainted with Dell's site selection told CommWeb that the firm reportedly drives extremely hard bargains, including demanding incentives to the point where some communities may be lukewarm about seeking a Dell call center.

Calls from some home PC owners will continue to be handled by Bangalore center, reports AP/CNN. Spokesperson Weisblatt said Dell has no plans to scale back the operation there.

But Dell is also expanding one of its US call centers. The Roseburg, OR News-Review reported Nov. 23 that the computer maker is creating 9,600 square feet of additional work space is within the 40,000-square-foot facility. Dell opened the call center, housed in a former supermarket, in September 2002.

Rob McIntosh, Dell's Roseburg site leader told the newspaper that the call center currently has 392 workers.

Helga Conrad, director of the Umpqua Economic Development Partnership told the paper that the current expansion could increase Dell's employment to 500 by the end of 2004.

The current expansion "is just a continuation of our original plan when we built out the facility," McIntosh said.

- posted by Web Promotion Team @ 12:45 PM