The Delta dilemma

16th Aug 2006

The call centre exodus continues. The most recent offshore devotee seems set to be Zurich Insurance which has begun a consultation period that seems almost certain to results in hundreds of redundancies in the UK with an expansion of its call centre interests in India.

Meanwhile in the US troubled airline Delta has asked permission from the bankruptcy courts to offshore hundreds of jobs to India in a bid to cut headcount and reduce operating costs. Assuming it's allowed to do so, the moves would be become an essential part of its plans to emerge from bankruptcy protection.

Good thing? Bad thing? I guess if you work for Zurich in a call centre in the UK, the answer to that must be pretty simple. And who can blame you? But I'd suggest that perhaps the Delta question is rather more telling. There will be howls of anguish from the airline unions in the US - which have already scored significant victories in opposing the outsourcing of aircraft maintenance business on the grounds of safety concerns.

But Delta is a deeply troubled company and has been for many years. It only continues to operate by cowering behind the safety curtain of the US' bankruptcy protection laws. The jobs of every single Delta employee have been hardly assured for a long time now. It's possible to argue that by sacrificing some US jobs to India the firm can protect the long term viability of the company and thus long term jobs for others in the US. The end justifies the means? A troublesome philosophy at the best of times certainly, but there are exceptions to every rule.

The Delta situation does illustrate the complexity of the offshoring issue. Why do companies choose to offshore? Is it to exploit cheap labour? Is it to shed more expensive workers at home? Is it just to bump up the shareholder value by cutting operational costs? Or is it part of a planned strategy to become more efficient and enable the provision of beter customer service to their clients?

All too often I suspect it remains one of the former options which explains why the service levels plunge. One of the most stupid arguments I heard this year - and even with 6 months to go I find it hard to believe it will be beaten! - was from a CRM expert who told me that the reason for low investment in call centre staff at mobile phone firms was the high churn rate meant that operating costs had to be kept incredibly tight.

Hello? Cart and horse! Chicken and egg! Surely if you have a commodity product with a potentially high churn rate then that's when you make damn sure you invest in top tier contact centre staff so that when an irate old git like me calls up in a towering hissy fit your staff are capable of talking me down from doing something that your bottom line would regard as silly. Not have some low paid call centre fodder that are going to make things worse.

Quite which camp Zurich falls into remains to be seen. I'm not a customer of that firm so I've no experience of the quality of the UK service that's been offered. If any of you do, I'd be most interested to hear how it was for you...

Stuart Lauchlan
News & Analysis Editor
[email protected]

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    Further reading

  • 81% of large UK companies to increase offshore outsourcing in next 2-3yrs

  • Call centres face extinction

  • Customer frustration high with call centres

  • Opinion: The cost of apathy, resentment and distrust

  • 'Rightshoring' – a new solution

  • Opinion: Call centre outsourcing can work, says NOA

  • Ten top tips: How UK call centres can be profitable

  • From call centre to contact centre

  • The Insider's Guide to Customer Service Knowledge Bases

  • White Paper: Achieving customer service excellence with streamlined service resolution management

  • Excellent Customer Service - Start by Recruiting the Right Staff. A BP case study

  • The A – Z of Good Practices for Customer Service

  • UK leads Europe in customer service

  • Customer Experience – The Voice of the Customer

  • Customer experience has little to do with customer service

  • How To Create A Great Customer Experience

  • Replies (2)

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    By shari_9377
    17th Aug 2006 12:11

    Hi Stuart,
    I am regular visitor to your site and I am really amazed by your India obsession. Your hit rate of referring to Indian Call Centers in your articles ( in a negative sense) is incredible. Readers like me expect a more balanced reportage. Don't expect people to be so naive to believe that all good things happen ONLY in your part of the world.

    Thanks (0)
    By John Ozimek
    18th Aug 2006 10:29

    Well: I can't say whetherStewart is as 'obsessed' as the previous poster reckons - but I would certainly say it was a UK obsession, with tens of thousands of UK customers put off doing business with companies because of the atrocious level of service they have received at the hands of an Indian Call Centre. I have certainly moved one set of Financial Products away from a provider because of their Indian involvement.

    As for Zurich - an interesting suggestion. I would currently have little but praise for their call centres, having experience both as personal investor and having to use them to support a Probate claim. I fear that if they move their Call Centres to India, my own business may be moving elsewhere not long after.

    Thanks (0)