Fallout

It has become part of modern culture to make fun of offshore contact centers, with the comedy usually taking shots at heavily accented CSRs that exhibit a poor command of English and an even poorer level of customer service. But this stereotype is not really fair, Taylor said.

"There are many Indian and Filipino contact centers that are extremely well run, with competent CSRs who have personal experience with American life and culture," he said.

Paradoxically, it is the very success of some offshore contact centers that have been their undoing, according to McIntosh

"Demand for CSRs is so high in some areas that contact centers have trouble finding good staff, and instead spend their time stealing each other's employees," she said.

Add in the difficulties inherent in working with any third-party suppler that is not integrated into a corporation's culture and management, and it is easy to see why problems occur. It doesn't help that many outsourcing clients put cost above service.

"Some U.S. corporations will switch outsource providers just to save 2 cents a call," Fluss said.

McDonagh agreed.

"In the past several years, some leading organizations have struggled with poor customer satisfaction as a result of offshore outsourcing, as many customers are turned off by non-American accents and the lack of skilled contact handling has created customer churn," she said. "In essence, you get what you pay for."

Joe Mangiaracina knows all about this fallout. Today, he is vice president of service at Stewart/Xerox, a regional company operated by Xerox Corp. to service the New Jersey and Philadelphia tri-state area.

"We have a 12-person, in-house contact center that prides itself on providing local service to our customers," Mangiaracina said. "When we bring people in to tour our plants, chances are they already know one or two of the CRSs on the floor."

Before coming to Stewart/Xerox, Mangiaracina oversaw a contact center for a competitive local exchange carrier (CLEC).

"Our big hook was in being local, as compared to AT&T being a national carrier," he said. "So, when the company decided to outsource its contact center overseas in a bid to save money, it really hurt that image."

The problem was due to what Mangiaracina calls a "cultural disconnect." Even though the CRSs in the Philippines spoke English reasonably well, "callers knew that they were being dealt with by someone non-local, and local was the reason they had signed up with us," he said. "Even though we tried to 'localize' the overseas service with a number of processes we put in place, our customers weren't fooled."

While the CLEC did indeed save money on its contact center by going offshore, it alienated numerous subscribers and undercut its core marketing message.

"Was it worth it? I'm sure it was from a financial point of view," Mangiaracina said. "But it definitely lost us customers and hurt our credibility."