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Study puts price on offshore service savings

Specifically, the new research calculates how much a financial services firm can cut costs by outsourcing its contact center.

There's little that's revealing in the news that companies can cut costs by outsourcing their contact centers to India. Yet a report issued Wednesday by Cutting Edge Information, of Durham, N.C., sheds some light on just how large those saving can be.

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For example, a financial services corporation that outsources 1,000 contact center-related jobs overseas can save upward of $25 million, the report states. India, where labor costs are about one-eighth of U.S. costs, offers significant savings in both labor and training over several years.

According to Elio Evangelista, senior analyst, one of the truly remarkable findings was the turnover rate at contact centers in India: 5%, compared with a U.S. industry average of 35% to 40% annually.

That is attributable in part to cultural differences and the value placed on customer service personnel in the United States versus other countries. While many companies tout their commitment to customer service, contact center agents typically aren't held in as high regard as those who bring in revenue, Evangelista said.

India's work force also tends to be highly educated, and workers have a strong grasp of the English language. That often translates to improved customer service, Evangelista said.

Additionally, outsourcing companies in India have established career paths for their contact center employees, a step U.S. companies need to take, Evangelista said.

Cutting Edge compiled its information from a handful of interviews with contact center executives at large banking firms and through data collected in various journals, articles and databases.

The study focused specifically on the financial services industry and took into account staffing, cost per rep and cost of training. Most of the information revolves around getting an offshore contact center up and running, Evangelista said.

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