Dell sending some jobs back to U.S. (outsourcing to reverse?)

AMERICAN-STATESMAN ^ | November 22, 2003 | Amy Schatz

[traumer]

Corporate customer complaints prompt the change AMERICAN-STATESMAN STAFF

In a surprising about-face, Dell Inc. is moving some technical-support jobs back from India to the United States.

The new U.S. employees will provide phone-based tech support for business customers, which account for the bulk of Dell's revenue. Dell employees in India have been answering some of those calls. Calls from individual customers will still be routed to call centers in India.

"We felt a little noise and angst from our customers, and we decided to make some changes," said Gary Cotshott, vice president of Dell's services division. "Sometimes, we move a little too far, too fast."

The computer company's quiet reversal comes as many U.S. companies are rushing to outsource operations to India and other low-cost developing nations. It suggests that the savings achieved by moving jobs overseas may sometimes be outweighed by the cost of antagonizing loyal customers.

"What (customers) said was, `You guys have been changing some things, and we don't like it as much,' " said Steve Felice, vice president of Dell's corporate business division.

It's unclear how many jobs the move might create in Central Texas, where Dell operates several call centers for tech support and sales and employs 16,500 people overall. Dell executives would say only that jobs will be added at call centers across the United States. Dell's other U.S. tech support call centers are in Nashville, Tenn., and Twin Falls, Idaho.

Dell was among the first large U.S. companies to move tech-support jobs to cheaper Indian call centers when technology spending plummeted three years ago.

The list of companies sending jobs to India now includes Intel Corp., Microsoft Corp., Hewlett-Packard Co. and Computer Sciences Corp.

English-speaking Indian workers are highly educated but earn a fraction of American salaries. Some customers have complained they can't understand Indian workers because of their accents and that tech-support workers rely too heavily on scripted answers.

Despite the escalating backlash, companies continue to send jobs overseas.

A recent Stanford University study estimates that Indian call centers have picked up 200,000 jobs since March 2002. Gartner Inc., the tech research firm, estimates that U.S. information technology companies will move one in 10 jobs offshore by the end of the year.

Dell's move "doesn't surprise me, but I don't see a broad trend to do that," said Ned May, an analyst with IDC, a tech research firm. "There's been so much attention to this that people have moved pretty aggressively. Hiccups were expected along the way."

Some companies have seen a small but definite decline in customer satisfaction. Yet executives have concluded that the cost savings are worth it, said Steve Lane, an analyst with the Aberdeen Group research firm.

"It's certainly fair to say that there's a general backlash against the idea of jobs going offshore," Lane said.

Dell executives left open the possibility that tech support for corporate customers could be shifted overseas again, if technical expertise and language skills improve there.

"I don't think we're ruling that out," said Jon Weisblatt, a Dell spokesman.

Nevertheless, Dell's about-face could provide at least a little "I told you so" comfort for Dell technical-support employees in Central Texas who were laid off in 2001. Dell cut 5,700 jobs that year, most of them in Central Texas, as the high-tech slowdown began.

Dell's worldwide work force has grown since then -- from 34,600 at the end of 2001 to 44,300 now -- but the growth has been heavily overseas.

In 2001, almost 68 percent of the company's work force was in the United States. Early this year, that figure had dropped to about 54 percent.

That trend continues: Last quarter, 56 percent of the 2,500 jobs Dell added worldwide were outside the United States, Canada and Latin America.

One reason Dell's employment has grown outside the United States is that the company is selling more PCs and other products globally, particularly in countries such as China and Germany.

Dell officials stressed that the company will continue to add jobs overseas as as its global business grows.

Dell's ambition to become a $60 billion-a-year company helps explain its responsiveness to the complaints of business customers.

The company wants businesses, schools and governments that currently use Dell Optiplex desktop PCs and Latitude notebooks to also buy advanced computers, such as servers or storage systems. Dell makes a bigger profit on those systems, which are supported by techs in the United States. It can't afford to antagonize its most profitable customers with poor support for PCs.

"Our corporate customers have come to expect a certain level of expertise," Cotshott said.

[DeFault User]

IF YOU CAN'T SPEAK ENGLISH GET OUT!

Most of the Indian contacts I've had speak grammatically correct English. The problem is that their accent is so thick that they are difficult to understand. It's especially frustrating when you are trying to follow instructions given over the phone.

[mylife]

One thing about this farming out work for low wages stuff is if you have an american tech that gets $20 per hour and can resolve a problem in minutes, and an Indian Tech making $5 per hour but he cant resolve issues the customer may spend days or weeks talking to them. How is this more cost effective for Dell? A: They PLAN on you giving up out of frustration!! Dude, you guys suk.

[TroutStalker]

What I posted to a thread yesterday:

I bought a Dell Dimension 8300 ($2500 total) last year and had problems with it right out of the box. After probably forty hours on the phone with India, six components replaced, and a letter from my attorney, they sent me a new machine. Of course, it may be the same with any other brand too.

[unixfox]

I am a Dell Solution Provider, have been since they started the program about a year ago. I've sold a few systems and had very few problems.

However...

I had a monitor go bad and needed a replacement. I went through Dell Hell getting it replaced. I had to speak with a "Systems Engineer" from INDIA about my bad monitor. He asked me how did I know that the monitor was bad, I said, well for one thing it doesn't come on and secondly because I have been doing this for 20 years. After about 2 weeks of going back and forth with these bozos from India I said I wanted to speak with someone in AUSTIN BY GOD TEXAS !! At this point I was more than pissed. I was finally told that in order to get the monitor replaced I would have to become Dell certified. They NEVER said anything about that when they signed me up to become a reseller. Ok...so I get certified after waiting another 2 weeks for the stupid test. I get a monitor about 2 weeks after that. It took almost 8 weeks for this to happen !!

The sad part? I am right here in Austin just a few miles from Dell headquarters where I could have driven over there in less than 15 minutes and picked it up myself !!

[Snuffington]

Gee, I'm shocked. For months all the industry experts have been telling us this offshoring was a one way street. An irreversable trend we'd just have to accept.

Meanwhile, a few of us in the IT industry who actually see this stuff up close and personal have been telling folks this is a fad, and predicting a bounce back. If the quality in phone support wasn't good enough, don't fool yourself into thinking complex engineering is faring better.

The long term role of India and other offshore solutions will be to make up for labor shortages. In quality and productivity American work is still superior.

[mylife]

Meanwhile, a few of us in the IT industry who actually see this stuff up close and personal have been telling folks this is a fad, and predicting a bounce back.

Can you even imagine what a nightmare farming out software development to these places is like?
You are correct it is a fad. The customer wont tolerate it.

[Snuffington]

Can you even imagine what a nightmare farming out software development to these places is like?

I can not only imagine it, I had to live through it. It caused me to make my first "lateral" career move. I jumped to a company that wasn't offshoring for no increase in pay.

[MarkL]

My company sells Dells, and while they're quality computers, their warranty leaves something to be desired compared to HP (and the old Compaq). Due to Dell's contractual obligations, we can NOT provide warranty service, except to a few, selected customers, who pay Dell an annual fee for that "privaledge." For anyone else, Dell has to dispatch a service tech with a part. The problem is that they WILL NOT dispatch a tech to diagnose the problem: The customer must work with the phone tech to diagnose the problem, and the field tech does nothing other than swap out the part. If a client needs to have the OS reloaded after swapping in a new hard drive, the field tech isn't allowed to bill the client for his time to do it! It's up to the end user.

One of our clients bought a brand new, low end Dell server (Power Edge 500SC, I think) for a small (4 user) network they have. May I start by praising Dell? When they sell as server and tape drive, they bundle the tape software (Veritas Backup Exec AND Veritas Inteligent Disaster Recovery, IMHO, my favorite tape SW) with the drive!!! Anyway, Windows 2000 Server started complaining that the hard drive was finding bad blocks. I asked them to send me the error messages, and told them they needed to contact Dell, read off the error message to the tech, and that Dell would send someone to replace the hard drive, and that I'd be out to restore the data, although that part would not be free. They were OK with that, but I got a call a short time later, and Dell told them that they needed to run the embedded Dell Diags on the server. They didn't feel comfortable doing that, so they had me come out to run the diags at their cost. As I booted the server, I saw that the drive was even failing the SMART diags at boot, indicating a failure was imminent! That wasn't enough for Dell. I started the quick diag test, which took about a 1/2 hour, and the drive passed, but it only checks the beginning and end of the drive. Since it passed, that wasn't enough for Dell. So I started the "full Diags," which would take about 2 hours. I took off for lunch (the client was too far for me to drive back to the office, so I had to stay on that side of town... Just trying to save them money...) I came back an hour later, and the test was still running. Two hours into the test, the drive finally gave up an error message, and the tech on the phone sounded genuinely suprised that there was something wrong with the computer! He did dispatch a tech to replace the drive, and it was replaced the following morning.

The problem was that the client wound up paying my company for 2 hours of labor ($300) to diagnose a hard drive problem that both the hardware and software agreed was faulty. So, to get a free, replacement 80 GB ATA hard drive, about a $150 or less value, it cost them $300. From that point on, I decided that if a client with a Dell needs a hard drive replaced under warranty, and they're not capable of working with Dell telephone support, that I'm going to send them to Best Buy or some other place to buy a hard drive, and I'll replace it myself when I'm sent out to reload their systems. It's cheaper for them than getting the free, warranty replacement drive!

Mark

[Starwind]

I had a monitor go bad and needed a replacement. I went through Dell Hell getting it replaced.

I had a very similar experience. I bought 2 Nokia flat panel displays with my new Dell system with a 3 year warranty and 1-day on-site repair/replace support.

After about 3 months, 1 Nokia goes black. I call Dell. Dell says they don't support Nokia - The Nokia they sold me, shipped to me, listed on my invoice & support contract - they don't support. Unlike other displays, Dell says they would only replace the Nokia if it had failed within the 1st 30-days, whereas other displays & components Dell would continue to support. Dell refused to identify which components they would in fact support directly. I had to wait until one failed to find out.

Dell inisisted I had to go to a 3rd party, Millenium ??, who apparently does all of Nokia's display support in the US. I had to ship the display to them, and wait about 1 month to get a different refurbished display back, that was marginally acceptable but not as good as my other brand new display.

A different problem arose when I upgraded from NT to W2K. Dell would invariably require a 30 minute explanation on every call, persuading Dell they still had an obligation to support the hardware & firmware.

All this about 3 years ago when Dell tech support was still in the US.

I don't know that I would buy Dell again. Given I've had to do all the support myself, Dell's alleged quality and organization is of no practical benefit. They are no different than a guy working out of his garage when it comes to actually meeting the terms of their agreement.

[mylife]

I can not only imagine it, I had to live through it. It caused me to make my first "lateral" career move. I jumped to a company that wasn't offshoring for no increase in pay.

I feel your pain. LOL! I get frustrated if I have to work on that stuff with a guy across town. When I sit down with a code jockey and we work together things happen! It is so much easier to communicate when we are in the same room and we are both certain we are looking at the same thing.

[MarkL]

I had anticipated this, but Dell threw in a twist. They realized that customers were pissed and responded. The twist is that they divided customers into 2 groups, the companys(large profit) and the average joe(low profit).

Sorry, to burst your bubble, but this isn't something new, or exclusive to Dell...

There are important reasons for doing this. First off, designing different computers for home and business users: Dell has the Optiplex and Dimension lines of desktop PCs, and the Latitude and Inspiron laptops. The reason for business vs home lines is that the business computers tend to be far more conservative, as far as updates of hardware and drivers go. Business users who might buy thousands of computers a year want to know that the computers that they buy today will have the same configuration and use the exact same software drivers that the computers they buy in 6 months. For many years, Compaq, HP, and IBM have all done the same thing... For Compaq, there were the DeskPros for business (and Prosignias for small business), and Presarios for home use. HP and IBM also had one line for business use, and another line. Warranty and support were always handled by different divisions too. There's an important reason for this as well. Think about it. Typical home users don't have much by was of computer experience. On the other hand, corporate users will typically have their own support staff who will have diagnosed the problem in advance, and if they're calling for support, there's something really wrong, and you've got to have more advanced tech support people available.

Dell can go to hell,they couldnt make it clearer that they think the average customer should!

This article isn't talking about anything new. The company I work for sells and services (some) Dells for our clients. We're not authorized to do warranty work except for a few clients, due to Dell's contractual obligations to some national service providers, and those clients pay Dell an annual fee to allow us to do their service. More than a year ago, I knew if I was going to one of those corporate clients, if I had to contact Dell support, I knew that I'd be talking to someone in Texas. If I had to call for Dell support for anyone else (including my own laptop!), I'd be talking to someone in India.

I happen to like Dell. They make a good, reliable computer.

[Lunatic Fringe]

We felt a little noise and angst from our customers, and we decided to make some changes

I guess Dell's customer's wanted to speak to someone who could speak ENGLISH!

[mikegi]

I bought a Dell Dimension 8300 ($2500 total) last year and had problems with it right out of the box. After probably forty hours on the phone with India, six components replaced, and a letter from my attorney, they sent me a new machine. Of course, it may be the same with any other brand too.

I've had great luck building my own PC. These days you can buy the parts and assemble it yourself quickly. That way you can get all quality components instead of some shovelware Dell decides to install. Building a PC yourself has never been easier now that the chipsets/motherboards are so integrated. For example, the Intel 865GLCL motherboard has integrated 3d graphics, 6 channel audio, and a 100Mb LAN for only $119. You basically screw in the motherboard, plug in the CPU, plug in the RAM, connect some power and signal cables and you're good to go.

Compare that to building your own PC back in the 1980s. It was ugly back then. Anyone remember populating memory boards with DRAM, searching for bent pins, etc. All that just to get an extra 512KB of RAM??? Plugging in four different boards to get what you needed then fighting with DIP switches for IRQs, ports, etc.

[MissAmericanPie]

"We felt a little noise and angst from our customers, and we decided to make some changes," said Gary Cotshott, vice president of Dell's services division. "Sometimes, we move a little too far, too fast."

Yeah, I'm one of those noisy customers full of agnst, tired of repeating myself six times to someone that barely speaks english, and certainly doesn't comprehend english, and never gets my problem well enough to route my call.

Get sent to the wrong department, put on hold, get your connection dropped and have to begin again. It's infuriating.

[Starwind]

We're not authorized to do warranty work except for a few clients, due to Dell's contractual obligations to some national service providers, and those clients pay Dell an annual fee to allow us to do their service.

Are there any restrictions that prevent an independant service/support provider from picking up support on a new Dell computer (for which the buyer declined support from Dell), or an older Dell system for which the support contract has expired?

If none, is such independent support technically feasible and cost/benefit practical?

[Agnes Heep]

Some customers have complained they can't understand Indian workers because of their accents ....

I used to patronize the liquor store of an Indian guy, who spoke very good English, but in such a way that I had to make him repeat every sentence, sometimes two or three times.

[MarkL]

Can you even imagine what a nightmare farming out software development to these places is like?

Don't get me start on that one! One of my clients had a ton of money invested in some custom written software (we're talking over $100,000), and the SW developers were going to come out with a new, Windows version (the old SW was all DOS based, while the new SW was SQL2K based). They were thinking about changing SW vendors, but they had a "history" with this developer, and liked the way that he was able to provide support when they needed it. After about another $220,000 investment, now they've come to realize that he's farmed out the software development to India, and when there's a problem in the code, it takes a while to get it resolved!

For instance, there's a module which allows them to fax from a certain screen... For some reason, it's sending a country code to the fax server! So, the question needs to go to India, and from past experience, these sort of problems seem to take about 2 - 3 weeks to get resolved!

If my client would have known that this developer was farming out his SW, they never would have stayed with him, but now with nearly a quarter of a million $$$ invested, it's too late to go anywhere else. Boy, are they pissed!

Mark

[chachacha]

Simply put!

Had I known then what I know now that option would have been weighed in my decision.

They are making changes "for the better" because most folks are waking up, complaining and forcing them to do the right thing.

You'll catch up just hang in there. Smart Ass

[MarkL]

I happen to like Dell. They make a good, reliable computer.

Let me clarify this... I like their hardware, especially their desktops and laptops. I would not buy their servers, if given a choice between HP Proliants (my absolute favorite) or IBM. And their warranty policies suck.

Mark

[Bear_in_RoseBear]

FYI ping...