Overview

Outsourced – The TV Show

I must admit – I don’t watch much television. I just don’t have the time these days.

However, I did find some time the other night where my wife and two kids had some down time and started watching an NBC show. During one of the breaks, I saw a preview for a new show for NBC’s fall lineup – Outsourced. The trailer itself looked hysterical to me and the concept interesting. So, I did a little research on it.

According to NBC’s site, the show is about "A comedy where cultural differences are a novelty" and is based around a company that sells novelty items in the US but who has recently outsourced their call center to India. The story revolves around Todd, the call center manager, who finds out about the outsourcing only after returning from management training and then told that he must move to India to manage the new call center. Throughout the episodes, Todd will encounter cultural differences and have to train his new Indian employees on how to not only talk like Americans, but think like them as well.

After a few clicks around the Internet, I found out that the show is based on a 2006 movie of the same name which received several high marks from critics and even earned "Best Film" awards at several film festivals.

The funny thing that hit me though, is the amazing amount of negative sentiment over the TV series. At almost every site where the TV series is being discussed, negative bashing abounded. Most all sites had comments regarding the poor timing of the show considering the high unemployment rate. Several of the comments revolved around the insensitivity and lack of American loyalty of NBC by airing a TV show like this when millions of US citizens are losing their jobs to employees in other countries around the world – not just in India, but in China, Philippines, Mexico and other countries.

So, let me just say upfront that I am completely sympathetic to anyone who has lost their job, whether it is due to outsourcing or not. These are indeed difficult times in the US for anyone looking for a job and the added pressures of trying to support a family make it even more difficult. I am also fully aware that the issue surrounding outsourcing isn’t just occurring in the contact center industry but in many others as well. Most recently, IT departments have been hit hard with their US-based jobs being outsourced to off-shore, lower-cost employees.

However, I’d like to offer up a few high-level thoughts on those negative comments, specifically as they relate to this TV show and to US-based contact centers:

  1. Outsourcing isn’t new in the contact center industry and has been around for a few decades. It has, however, made its way into the American consciousness more recently as contact centers started opening sites in India due to cheaper labor and advances in technology (reliable, fast and clear voice connections, secure data). However, more recently, many of those jobs have started to make their way back into the States for several reasons including cheaper labor, distributed contact centers brought together through technology and ability for agents to work from home thus decreasing operational costs. However, one of the key drivers for that move was the cultural barriers encountered between US customers and international agents (accents, customs, inability to relate to local events, etc.) thus forcing the need to move contact centers back to US soil. For this reason, I think the TV show does more to promote homeshoring than it does off shoring and not the other way around.
  2. The bottom line is that businesses in the US need to survive, period. The contact center has been typically seen as a "cost center" and is going to be one of the first to be outsourced as a result. Right or wrong, US employees will continue to lose their jobs if the same job can be performed at the same level or better for less money elsewhere. By applying basic business fundamentals, if outsourcing contact center agents enables a business to survive, far more jobs around the rest of the business can be KEPT than those that are lost. In this case, the needs of the many outweigh the needs of the few. Before I leave this point and go onto the next, let me point out that there has been a trend occurring in the contact center industry, and one that we at Interactive Intelligence have been promoting –  and that is a switch in the contact center paradigm from a "cost center" to a "profit center." With a few changes in the mindset of executive management and some additional training of agents on focusing on sales and customer retention, contact centers can quickly become a huge revenue source to the business through up-sell and cross-sell opportunities as well as building customer loyalty and repeat business.
  3. If outsourcing keeps a company in business, the idea is that it will also make them more profitable. If a company becomes more profitable, they are able to create more jobs. In the area of the contact center, if you are an agent who loses a job to an offshore outsourcer, then you have the opportunity to work for the same in a different capacity – inside sales, development, product management, IT, marketing, sales, finance, collections, etc. The skills you acquired during your employment along with the product/service/company knowledge you acquired can be used elsewhere in the business.
  4. Many US companies that outsource departments abroad often open up additional international markets which stimulate growth in their own products and services as well as others. Remember, we no longer live in just a US-based economy but in a world economy. Let’s take a simple scenario and use contact centers as the example. As US-based contact centers open up new centers in India, China or some other country, contact center vendors like ours benefit by additional exposure of our products and services. This in turn adds new revenue opportunities as a result and thus stimulating our local economy by increased spending and job creation. Additionally, the exposure to the US culture has the effect of stimulating interest in US products and services. Since the Indian (or Chinese, or whomever) agent has more money to spend, he can spend it on those same US products and services. As you can see, in a world economy, the long term effect on outsourcing has great potential to grow the US economy through international markets. Does it always work like this? No, not always but the potential is there.
  5. Lastly, and perhaps a bit too focused on my own industry, it is important to note that the contact center growth rate in the US has been in the low single-digits for years, thus stunting domestic revenue growth potential for contact center vendors like ours. Internationally, however, growth rates in countries like India, the Philippines, China, and others are in the double-digits. This means greater opportunities for all contact center vendors to sell our products and services abroad and thus grow our revenues and employee base.

Before I wrap up this blog, let’s get back to the original thought that spurred this whole discussion – the upcoming NBC show Outsourced. Will I watch it? I’m not sure that any of you really care, but if you did, I would say that, yes, I would like to see it assuming that I can find the time. It deals with subject matter that revolves around my job and I’m interested to see if it stays on or not.

However, the bottom line is that is is just a TV show. If the general public doesn’t like it, thinks it is "un-American", or that it promotes more outsourcing of US jobs, then they won’t watch it and it will quietly die like 90% of the other programs introduced each fall.

Meanwhile, businesses will continue to grow and fail, outsourcing will continue to occur, and we will all continue to depend upon the world economy.

Tim Passios

Tim Passios

Tim Passios

I began working for Interactive Intelligence in 1998 and have a more than 20 years of experience in the telecommunications and software industries. I also worked in contact centers as an agent, supervisor, field trainer and manager for eight of those 20 years. In my current role at Interactive Intelligence I have constant interactions with customers, prospects, the media and industry analysts, which all help me to understand many different perspectives related to the contact center, unified communications and business process automation markets. When I’m not working I like to spend time with my family.

11 comments to Outsourced – The TV Show

  • I was curious to hear more about the series..and then realized it was much more than a synopsis of the series. I’ve heard a lot of the same negative chatter surrounding the show, and I must say that I agree with many of the points you made…great post!
  • There is a growing mandate within North American, European and Australian corporations to reduce internal operating costs and refocus on core business activities. In other words there is a rising trend towards the deconstruction of old business models. Companies are moving away from a capital expense environment to an operating expense model. The early movers have long passed the hump of worrying about whether the outsourcer vendor can manage their customer relationships appropriately or if the outsourcer has sufficient security safeguards in place to protect their databases.
    Over the last few years the off-shoring and outsourcing market has matured. Further growth is predicted as organisations expand the range of business functions they are prepared to outsource as a way not only to lower operating costs but also as a way to become more efficient and playing to their strengths. After all once companies take stock and realise what business they are really in. Do they really need to be handling non core business processes if a third party can carry out that same process for a lower price and more efficiently?

    Moreover we are also seeing customer transactions by electronic means direct via websites, email and webchat increase at the expense of voice transactions via contact centres. This trend is being compounded more people interacting with companies via social media sites like facebook and twitter.

    Outsourcing has evolved into a very sophisticated business function. Price is no longer the only driver for organisations looking to outsource their business processes, and this is because the Asian based BPO companies have proved time and time again that they can outperform their western counter parts on any key performance measure, and have improved the efficiency and performance of their western clients. Therefore outsourcing providers have been challenged to demonstrate that they can not only provide the cheapest service, but also the highest levels of customer service before multinational organisations entrust customers to their care.

    The market has now reached the inflection point where outsourcing is not regarded as a risky business practice but a practice that may mean the difference between staying in business or not.
    It is driven by two factors: -
    1/
    People do not want to work in a call centre
    It is getting progressively harder to find people in first world countries who want to work in contact centres mainly because of the perceived stigma associated with it. In Australia it is sometimes referred to as BBQ killer when some one announces that they work in a call centre. For the most part contact centres in western countries are staffed by students, returning mothers looking for a second income and people who are looking to wind down at the end of their careers with part time work. This is a generalization but many look at call centre work as a transit role until something better comes alone. Where as call centres in Asia are staffed by highly educated and highly motivated enthusiastic university graduates who regard working in a contact centre as a highly prized western job. Moreover people in Asian countries will simple do work that we in the west are not prepared to do.
    2/ Return on shareholders funds and margin squeeze
    The shareholders of the major corporations in first world countries who want to outsource will demand that their companies do so in order to maximize profits and thus increase the return on shareholder funds. When one considers that in developed nations over 50% of adults now own shares and in the US shareholders look for a high return on investment, the attractiveness of the lower cost operating environments will override the sentiment of keeping these jobs in expensive (In relative terms) first world countries. Notwithstanding that the GFC was perpetrated by this notion of getting’s ones money to work harder.
    It is hard to argue against transaction costs of US$0.30 in Asian contact centres compared to over US$3 per transaction in the US, Europe and Australia. The other consideration is that if one company outsources and its competitors choose not to, the company that does will get a considerable economic competitive advantage. For all the expressed outrage, when the rubber meets the road the hip pocket trumps the idealistic notion that the world ought to be a fairer place. Consumers will always choose the lower price if the quality is comparable. That’s just the way the world works!
    So to say the horse has bolted is an understatement and there is no getting it back. The world has moved on and more over the epicenter of the global economic is shifting inexorably further east. One only has to pick up any newspaper and read who holds the majority of western debt.
    The debt binge that we in the western world have been on is over and one of the consequences is that in order to get back on our economic feet we have to do things differently. We really need to get our collective heads out of the sand and face up to the fact that if we want different we need to do different!
    Be that as it may there is a silver lining! As the Asian middle classes start to come forward we will see higher demand for western goods and services. We will see a redistribution of global wealth in a fairer and more equitable manner. Now that has to be a good thing.

    The Sauce is an Asia Pacific newsletter where we can take this debate to a broader audience
    http://www.thesauce.net.au

  • Kathy
    You will never see me watching this show.
  • Bev
    I will NEVER watch this show. Regardless of the authors so-called ‘high level thoughts’ on the subject, the show STILL makes light of a dire situation in the U.S.
    He claims that outsourcing increases profits and that boosts the economy. Exactly HOW does millions of Americans’ losing their jobs to outsourcing overseas (whether it be customer service or manufacturing)boost the economy? I was laid off for 1-1/2 year and was lucky enough to get another job, although at a much reduced salary. But I can sympathize with 15 million unemployed Americans who have lost their jobs, their savings and are now losing their homes. I see NOTHING funny about this at all. I hope NOBODY watches this show and it goes down the tubes quickly.
  • Bev & Kathy,

    Thanks for the posts. I’ll have to keep my eyes on the stats for the show to see if it ever makes it. I will, if I’m able, give it a shot and watch an episode or two just so that I can stay on top of things.

    However, without getting into a political fist fight here, how do you recommend companies stay in business if they cannot compete with other businesses who ARE outsourcing? Labor costs are the largest expense of any company’s operational budget and when the numbers are too high, companies have to find another way to reduce them or go out of business, right?

  • Fred
    I tested the pilot. The show has some potential, and just because it could be about a sensitive topic does not mean it could not be funny. However, the pilto I saw was horrendous, the only positive iN it was Diedrich Bader (Drew Carey Show; Office Space).
  • Lorraine
    Outsourcing may have been around for awhile. That doesn’t make it right. The outrage is that if we allow a show like Outsourced to be a success then we are as much as saying we condone outsourcing. I have never agreed with Corporate America giving our jobs to other countries for any reason. I believe all companies who outsource should have to disclose this to the public so as Americans we have the right to boycot their company who are making us pay as consumers for other countries to profit from our patronage. I will never watch this program and I encourage all of America to do the same. If you do watch this show why don’t you move to India and live if you think they are so great and funny.
  • A quick update for those following this blog – the series premiers on Sept. 23, 2010 at 9:30ET/8:30CT.

    Mark your calendars.

    Or not. ;-)

    Tim

  • I am waiting for the update. Nice blog, i really enjoy reading it
  • Jay
    Kathy, Bev, and Lorraine. I agree with you 100%. When I first saw the trailer about the show, it was like a slap in the face. People here in america are losing jobs left and right because of outsourcing. The fact that some think that outsourcing helps the economy is laughable. Outsourcing helps business that already get huge tax cuts while we as working class citizens have to pay higher taxes to compensate.

    Someone stated earlier, "Labor costs are the largest expense of any company’s operational budget and when the numbers are too high, companies have to find another way to reduce them or go out of business, right?". I’m pretty sure that the cost to run the upper management is a huge contributer to any large corporations budget woes. If you think that outsourcing can help a business stay afloat, tell me this. When a company outsources for cheaper labor that cuts down on there overhead, hints mor profit for the company. Are these company going to reduce the price of there produce or the prices for there services to us? Absolutely not. The markup may be in upwards of 100 to 500%+ depending on what the product or services are they offer. So contiune trying to convince people how great outsourcing is for american businesses. Tell the story to someone who has been on a job for 10 to 20+ that lost there job due to outsourcing and see what they say.

    Another way a company can cut labor cost without outsourcing is for business to go Co-op. This has been proven to be a successful alternative. Not only do you cut down on unnessasary spending, but everyone has a say so in what goes on with the company because they are part owner.

    As far as the show is concerned, I will never watch it.

  • I find this show interesting considering that this is based from a reality that outsourcing is the latest trend in the business today.

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