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.