Saturday, November 06, 2004

Why companies who outsource overseas lose money

Companies can't possibly be saving money outsourcing their tech support
overseas.

No way, no how.

Here is my story, part of which is a continuation of the computer dying.
I will pick on two companies, HP and VONAGE, but rest assured that they
are not alone.

HP- Our family has 3 HP laptops, a HP digital camera and one of their
desktops, which has been the subject of earlier blogs.
You could correctly guess that I have been generally pleased with HP
products.

In the course of trying to get the desktop up and running (its still not
in case you care) I have had to deal with HP support via telephone. The
first instance, when I finally talked to a human, she was what I say (euphamistically) a "non-native english speaker", henceforth NNES.
Speaking plainly...she could barely understand american english, and she
could barely speak english at all. Having travelled a bit, I'd guess she
is from (and may still be there) the asian subcontinent...Pakistan,
India or Bangladesh. The conversation took a long time, probably a little
over 30 minutes. I needed to have HP send me recovery disks.

A few days later, the FEDEX package arrives...it is labelled with the correct
address, but a person who is not me. Bottom line, I can't take delivery of
the package. So now I wade through voice automated hell to get the privilege
of speaking with another NNES. I'm trying to explain the problem, after a
while, again I'd guess 30 minutes or so, the NNES gives up and passes me on
to a american speaking...AMERICAN! Holy cow! and everything was
straightened out in just a few minutes.

VONAGE a IP phone company that competes with Packet8 (which after this
experience I HIGHLY recommend over VONAGE if you just want simple phone
service). Friends of ours got the VONAGE phone. I spent a couple hours
at their house a week ago trying to get it working with no real luck. Last
night, I went back to finish the task. At my wits end, I call VONAGE tech
support (ironically using my Packet8 phone:). It takes a couple tries to get
through at all, when I get a NNES, probably from the same part of the world...
maybe HP and VONAGE share a call center... I spent well over an hour on the
phone with this guy. His pronunciation is so bad, I can't understand him when
he asks me to do a 'tracert' so he spells it...I can't even understand him
saying the alphabet (and he thinks I don't know what a 'tracert' is, after
I've already ripped thru various commands, IP settings etc.without his
prompting). I'd guess just the tracert thing lasted at least 10 minutes.
Anyway, after 2 1/2 hrs, of which at least an hour was on the phone
with this guy, I get the thing working.

Now, here is why these companies can't possibly be saving money with these
out-sourced call centers. In HP's case, they used about 1 man hour to do
something that with a native english speaker took 10 minutes...they have to
be paying the NNES a mere 16% of what they pay an American to break even...
and that is not counting...
- they incurred the cost of the incorrect shipment
- they lost some of my "goodwill" which is hard to put a value on.
- the expense of setting up an overseas call center
- including risks inherent in basing operations overseas, such as:
- political instability
- currency/banking instability

The numbers for VONAGE work out similarly, I think we could have solved the
problem in about 15 minutes with a native american english speaker as the
tech. Plus, in this case the goodwill costs are measurable and HUGE!
I recently wrote a small article in a newsletter about the great success
we've had with our IP phone. A few people that have bought IP phones as a
result and a large number have asked more specifically what to get etc. I
have recommended the Packet8 over VONAGE in all cases. I know at least 2
people have bought Packet8 and another 2 or 3 are seriously considering it
because of my article and after talking with me. Each one of those people,
if they end up having the sucess with Packet8 that I have had, is very likely
to recommend the service to others, especially as they rotate to other overseas
assignments. VONAGE lost real business, real money for 2 simple reasons,
their product is difficult to install compared to the competitor, which makes
it likely you will have to talk to tech support...and they barely speak
english.

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