The Hindu Business Line : `Service provision must come from the best possible location'

Chennai June 1 Offshoring a service, simply because it is possible to do so, may not always be the best solution, according to Mr Mark Kobayashi-Hillary, Director of the UK National Outsourcing Association.

Speaking to Business Line, he said: "We are entering a new era of mature global services. It's time to accept, both in Europe and India, that this means service provision should be from the best possible location - which might be just down the road or just across the ocean."

According to him, the end-consumer doesn't care much for corporate strategy. "All they want is want good service when they call. And sometimes, good service means local service, regardless of how well trained the offshore team might be."

Of course, the consumer is not aware of the benefits that a company enjoys when it opts for outsourcing, such as reduced costs, increase shareholder value, access to expert resources and improved flexibility.

With growing resentment over job cuts and fears of security issues, the issue of outsourcing work to India keeps cropping up like a bad penny time and again in public discourse in developed economies, particularly the US and the UK.

While the value of labour arbitrage cannot be overstated, the issue of quality of service, especially in the context of call centres, has become the latest talking point.

Some companies in the UK have gone to the extent of steering clear of Indian offshoring, and see it as a competitive advantage over their rivals.

"For instance, Natwest Bank has beamed TV ads to tell the entire nation that they never answer customer calls in India. It seems like a pragmatic strategy, given the fact that four out of five British consumers would rather not talk to an offshore contact centre about their personal financial details."

According to him, there is a need to accept the fact that there are many kinds of interactions that a customer may have with a company. "The type of interaction will dictate how it can be handled."

However, he adds that outsourcing customer contact works "really well in most cases."

Many Indian companies have made it their core function and are now exporting their expertise across the world, but the industry is maturing.

"The mantra of come for the cost and stay for the quality has been used and abused over the past few years, as Indian suppliers sold the offshoring story to eager-to-listen executives in Europe and the US."

According to him, offshore outsourcing has become the top story in management strategy.

"Endless MBAs are being awarded to students who attempt to predict what the future holds for India, China and other offshore destinations for technology-enabled services."

Mr Hillary is the author of Outsourcing to India: The Offshore Advantage and co-author of Global Services: Moving to a Level Playing Field.