Opportunity On The LineOpportunity On The Line

Sony Electronics Inc. knows the challenges of getting an overseas call-center employee to understand the service demands of a U.S. customer. The company outsources customer-service call-center functions to India and the Philippines, as well as software development and application monitoring. Maureen Read, VP and general manager of Sony's customer-services center, says she regularly visits the Indian call center and spends a lot of time with the customer-service reps explaining Sony's philosophy toward customer service. "I learned early on that you cannot expect an Indian company to teach their Indian employees how to [understand] Americans," she says. Read says that with customer service in particular, people from either your company or your IT-services firm have to provide "an ongoing influx of American viewpoints."

In a recent report, Gartner says that managers of offshore vendor relationships will need to have backgrounds in human resources, finance, and business analysis, as well as IT. But those people aren't being developed, the report notes: "There is currently no career path in a traditional Information Systems department to develop and maintain the skills required to manage a portfolio of external service providers for the benefit of the business."

Some offshore outsourcing vendors see IT infrastructure changes as a way to improve the lines of communication. Vision Healthsource, with facilities in Chennai, India, handles medical billing. Staffers at the firm, which guarantees its customers 40% to 60% in payroll savings, post payments directly into clients' hospital information-management systems, identify patient accounts that require follow-up, and rectify problems with insurance carriers. Vision Healthsource makes it easier for its overseas customers to check the status of their work, offering Web-based software that lets clients monitor in real time work that's being done on their behalf. The company plans to add video tools so customers can communicate directly with their counterparts, a spokesman says.

Meanwhile, Indian firms continue to expand to take advantage of companies' growing desire to house their business-process operations overseas. Global Realty Outsourcing Inc., an outsourcing firm with two facilities in Chennai, plans to expand its operations in the country to 1,000 employees by June. Its current workforce of around 350 people--more than half are CPAs or MBAs--crunch numbers in Chennai to help the company's U.S. clients make large investments in real estate. And TransWorks Information Services Ltd. plans to invest $3 million to $3.5 million to add 400 to 500 seats at its Bangalore service center over the next several months, raising the total number to 1,300.

Those who've avoided offshore business-process outsourcing so far are paying attention. Given the potential for cost savings, moving some business processes offshore is a possibility for packaging and logistics company United Parcel Service Inc., CIO Ken Laci says. "It's very definitely on my mind," he says. The company has yet to launch any specific initiatives, but UPS is working with Accenture and IBM to study the benefits that offshore outsourcing might bring.

Laci has a caveat, though. Given the crucial nature of the functions typically involved in offshore outsourcing of business processes, vendors will have to offer airtight service guarantees. Says Laci, "They need to take some of the risk." That's a deal outsourcing vendors and customers increasingly are finding they can make happen.