Aussie firms turn up noses at offshoring

Corporate customer-relationship managers at a conference in Melbourne today rejected the option of outsourcing services to offshore vendors, despite the growing global trend to shift some operations to lower-cost countries such as India or China.

At the Genesys contact centre conference, heavyweight companies such as the ANZ Bank, Suncorp and the Australian Taxation Office said the customer interface was too important businesswise to send offshore.

Suncorp's general manager for personal customer sales and service, Andrew Mulvogue, said his current position on outsourcing call centre services to such places as India was "that it's not an option".

"We have been around for a very, very long time and we're one of the biggest [Australian insurance companies] and we're all Australian and I can't see us taking our business or our call centres offshore," he said. "I don't think, as an organisation, our business would work if it was offshored".

Mulvogue added that Suncorp's contact centre was too important to entrust to an offshore vendor.

"There's no way known we're going to want that level of customer interaction being offshore. Because I'm yet to find an interaction that's not highly valued to an organisation, particularly in the insurance field," said Mulvogue.

"Why would you go offshore if you're an Australian based company wanting to look after Australians in terms of speaking to them in their times of need? How's someone in India going to relate to someone in Australia whose house has just burned down?"

Head of Australian contact centres for the ANZ Bank, Vicki Shields, said only non-essential functions to businesses should be considered for offshoring.

"Your last bastion of anything that you should outsource or offshore should be your customer user interface," Shields said.

However, the managing director of customer relationship management vendor SalesForce, Kevin Panozza, said it was only a matter of time before Australian businesses seriously consider offshore call centres.

"Countries like the Philippines and India are absolutely alternative solutions," he said, citing the example of IBM, which has recently invested over $150m for a call centre in India.

"These companies [such as IBM] are not silly organisations, if they're making that kind of investment in India, then we have to take to take it seriously as an outsourcer," said Panozza.

"Although we're not seeing business go offshore at this stage, I think there are some training issues in India at the moment, and I think it's a very new industry, but as it develops and matures I think it's going to provide a very viable alternative for companies that have got very simple call centre requirements."

Vice president of Genesys Asia-Pacific and India regions, James Brooks, said the decision to offshore an outsourcing project is "all about cost".

"The average salary in Australia is AU$3,000 per month. In India it's AU$3,000 per year. Fifty per cent of the cost of running a call centre is people," he said.

However, an assistant commissioner at the ATO, Stewart Smillie, said Australian government was holding firm to its position that it will not outsource call centre services to offshore companies.

"I can absolutely tell you that we are not looking to outsource any of our work, certainly not offshore," he said. However, he adds that the ATO has in the past looked to private enterprise to take on the "call load" at appropriate times, such as during the introduction of the new tax system.

The managing director of voice solutions for Telstra's business and government arm, Louis Dupe, said Telstra has no plans to offshore any of the company's 9,000 call centre agents.

Dupe said that enterprises should consider offshoring only if it coincides with their "customer service strategy".

"One of the first considerations should be what customer services you're trying to deliver and does it fit... If it's purely a cost-driven reason then I'm not sure that it will be successful," he said.

Abby Dinham writes for ZDNet Australia