As economic recovery remains elusive for certain countries and industries, and companies work to return to growth and profitability, many companies report they still are focused on improving the efficiency of the business.

In fact, a Q1 2011 survey of business executives reports that 66.4% of executives believe cost pressure will be higher in 2011 than it was in 2010.

This focus on efficiency is nothing new for service and support—we have seen a strong focus on cost containment and reduction over the past four years.  Yet because many organizations already have taken advantage of “low-hanging fruit” cost-reduction opportunities, we now are seeing a focus on initiatives that require more effort.

In fact, we find that many service and support organizations are now rethinking their global footprints, and  renewing emphasis on site consolidation, whether due to cost savings or merger and acquisition activity.

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This post was originally written for our sister program, the CFO Executive Board, a membership serving CFO leaders and their initiatives.

Editor’s Note: In light of the serious situation in Egypt, the Corporate Executive Board asked our Leader for Emerging Markets, Zlatica Kraljevic, to share advice for companies with operations in Egypt and beyond. In the article that follows Zlatica will address:

1.     Dealing with Unrest in Foreign Lands

2.     While Unrest is Certain, Arab Markets Cannot Be Ignored

3.     What Should Multi-National Corporations (MNCs) Do Now?

Additional information on the crisis and notes about the drivers of the unrest can be found in Zlatica’s blog entitled Background on The Egypt Crisis.

Dealing With Unrest in Foreign Lands

Most experienced MNCs take political unrest very seriously and have emergency plans in place to protect their human, financial, and physical assets in case of a government collapse. Given the reality of occasional unrest, every company and individual operating abroad should be prepared to take some basic steps:

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It’s not news that companies and CEOs increasingly consider customer service as a way to differentiate themselves from the competition.  Yet, until recently it was rare for service and support’s value proposition to play a leading role in advertising.

In several recent commercials—click on the links below for YouTube clips—companies boast of exceptional customer service and customer centricity in creative (and hilarious) ways, encouraging prospective customers to switch or otherwise use their products.

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I’m a consistent viewer of NBC Thursday night TV, so I probably would have given the new show “Outsourced” a chance even if my job had nothing to do with customer service.  My experience in customer service, though, did make me a tougher critic.  While most professional critics have focused on the cultural and economic aspects of the show (reviews are mixed, at best), my focus here is mainly call center specific.

As a quick background for those who did not watch the show: the premise is that an American novelty company has run into financial difficulty, so they cut costs by sending their call center operations—and one American manager—to India.  The main dynamic for the manager is that of a stranger in a strange land – experiencing the TV-version of India for the first time.  What ensues is an in-your-face barrage of crude humor that is as subtle as a jackhammer.  This being TV, I expected everything to be exaggerated for the sake of gaining a few extra laughs, though I’d argue that the writers beat my expectations. Read More »

Is the next big trend backshoring? In the past year, several organizations have reversed their offshore decisions—Delta Air Lines, Dell, and IBM to name a few.

We get a lot of questions from the membership asking whether everyone is onshoring again – and if they should onshore their operations. We hear more members casually mention they’re taking their outsourced/offshored operations back home. Perhaps they didn’t follow the 3 Keys to Offshoring Success, or maybe this is part of a bigger trend.

To find out, let’s start by reviewing the facts. There are several reasons companies take operations home: Read More »

By Dan Clay

“What level of cost savings can we expect after offshoring?”  It’s a question I get a lot.  The unsatisfying answer: “It depends.”  AT Kearney recently released a fascinating exploration into why.  In their Offshore Success Study, AT Kearney gathered data from 35 offshoring companies and analyzed what differences explain the drastic variability in performance across the high performers (who averaged 64% savings and often improved service quality) and the low performers (who only had an 18% average savings).

What’s responsible for this difference?  The Offshore Success Study finds that “execution strategy” – how you handle the transition – is more influential in determining success than variables like offshore location or process complexity.  In short, how you offshore matters more than where or what you offshore:

• Winners don’t focus on savings. The best performers emphasize improving operational performance rather than generating savings (and paradoxically achieve greater savings in the process!).
• Winners invest more to save more. Companies investing more in managing their offshore programs (bigger management teams, more internal on-site resources, strong cultural integration) achieve better performance and savings results.  The best performers had one onshore manager for 50 to 75 offshore FTEs (a ratio that may improve after the operation has stabilized).

So how do you become one of the ‘winners’ – one of those companies with the right execution strategy?  I would have three pieces of advice for someone transitioning to a new offshore location. Read More »

By Dan Clay

For years I’ve been saying “No” (a firm “No” at that) but recent findings push me to temper this inference.

Like any good researcher, my shift in opinion comes with plenty of data—particularly important for a topic rife with some very loud assumptions. 

CCC’s been measuring customer service preferences for over 5 years, and we always came to the same conclusion about service with an accent: it’s a constant “noisemaker.”  A customer complains about the offshore location only when something else goes wrong on the call (let’s say it was a transfer).  Poor service is seen as a product of the accent—“I didn’t understand the rep” says the customer—but the real problem is the transfer (and the customer would be just as negative if he had been transferred by an onshore rep).  If the transfer hadn’t happened, then the customer would have had no issue with the accent. 

Customers notice it, they mention it in surveys, but our data showed us that if the customer received proper service, rep accent had no meaningful impact on the customer experience.

This conclusion was corroborated by data from our prominent offshore members and bolstered by my nagging faith in global brotherhood (the citizenry behind “We Are the World” couldn’t possibly devalue discussions simply because the service rep sounded different than the weatherman).

Then this happened.  The recession not only changed where we eat and how we shop, but what we value in the customer experience.  Read More »