It's Time to Insource

As is typical of American industry, once again we’ve allowed the pendulum to swing too far.  That’s ok.  We just have to recognize when it happens.  It’s our nature to be passionate, even if sometimes passion leads to irrational exuberance, to use a new cliché.

This time the pendulum that’s swung too far is the one that says “outsourcing” on it.  That’s all you read about: outsource to China, outsource to India, even outsource domestically. But given all the failures and unmet expectations, it’s time to reel in the irrational outsourcing exuberance and “insource” what matters most.

Just ask Dilbert
A cartoon depicts Dilbert walking into a colleague’s office saying, “I have some disturbing news. We outsourced our customer service function to India a few years ago. Apparently they subcontracted the job to Mexico. Then Mexico subcontracted to Vietnam, who subcontracted to the Philippines, who subcontracted to the US.”

The cartoon continues with the employee saying, “It turns out that we are the lowest-cost provider because we lie about our hold times. In summary we pay ourselves to hose ourselves.” Then the employee asks his boss, “Are you thinking what I’m thinking?” The boss says, “We should raise our prices?”

Actually, like many of Scott Adam’s Dilbert strips, this one is a little hard to follow. Sometimes he hits the business world square in the head with startlingly truthful wisdom, while other times he skitters around the fringe of business reality with the acumen of a third grader.

But somewhere in the cartoon are a few good truths. One is that projects can and do get outsourced down more than one or two levels. Two, companies that outsource often end up hosing themselves. Three, we might do ourselves and our companies way more good by adding value (features/innovation), keeping certain work in house and raising our prices – especially now that we’re moving away from the same recessionary scarcity that sparked the first wave of outsourcing in the early 1990s.

Call Center Crazy
Take the commonly cited call center. It seems to me that in certain industries it might be time to invest in a system of service that revolves around real people, speaking clear-headed English, who are bright, lively and ultra capable of making a customer happy. We’ve got all this rhetoric about The Customer Experience, One to One Marketing and the like. Yet we can’t find anyone who can foster real Customer Loyalty by bonding with customers, regularly.

One thing’s for sure. People in India and China probably don’t know a whole lot about how to bond with your customers, as a rule.

Having said that, call centers still may be the perfect candidates for outsourcing, and we just need to outsource better. Or the companies who provide such services need to do so better, faster and cheaper. I really don’t know because I’m not a call center expert; if you are, I’ve probably lost you because you believe deeply in the reasons for why the entire customer service industry is in the can.