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.

[Cicero]

To be frank, I've never had any luck with ANY technical support for ANY computer I've ever owned. One company is as bad as another. The reasons are obvious. They shave down the price of the computer, but there's no way you can shave down the cost of a real expert's TIME. So either you wait forever to get through to a real expert who has no time when you finally reach him, or you get quickly put through to a moron.

So, what I quickly discovered is that you have to learn how to fix problems yourself. Educate yourself on the hardware and software, and visit with knowledgeable people on-line. I found have found the CompuServe forums invaluable, although they are not what the were before AOL took over.

[MarkL]

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?

There's no problem with going to any service provider you want for anything you want. The problem is with the cost involved. First off, if you buy any "Branded" computer, you will be getting hardware that is NOT industry standard, which means if you have a system board failure, you can only get it directly from the manufacturer. And believe me, like auto and motorcycle parts, if you were to try building a computer from factory replacement parts, the end result would be about 4 times as much as buying a new PC.

By not being warranty authorized, you can't get parts under warranty, and the service provider doesn't get reimbursed for the service call. It would get very expensive, very quickly.

This is why most business leases on computers run about 3 years... When the warranty runs out, so does the lease.

Mark

[big_Rob]

Naturally, Dell responded to the business users first. They complain. If a work computer doesn't function, lots of prolems occur, and the guy using the PC catches it. Most (anecdotal data) personal users just live with minor problems, and use the inferior support from overseas. They don't like it, they complain to their friends, but they seldom move up the support ladder to actually tell someone who matters. If the private consumer doesn't make a loud noise, why spend the time or effort to fix their problems. Remember, the squeaky wheel gets the grease. If you don't make the effort to complain to the right people, don't expect anything to change.

[yarddog]

I have had the exact same problem trying to understand their tech reps. They are courteous but I simply can't understand them.

I just assumed they were hiring illegal aliens but now I see they are in India. It does also seem they are reading from a cheat sheet and are giving canned answers.

[MikeO]

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!

Amen to this! And in cases where the development is done offshore and turned over on completion, they are finding out that the code is a nearly un-maintainable, un-documented pile of spaghetti. They also LOVE to hide behind the "it wasn't in the specifications..." BS when they turn over crap that doesn't work. As long as the trade journals keep sweeping these facts under the rug and touting the "huge savings of outsourcing" the trend will continue.

[FR_addict]

We use to get good service, but in the last year it has been very bad. They shipped a part out that wasn't right. We gave up after calling and emailing them on getting that part fixed. The hinges are broken on one of the computers. This is the second time, the hinges needed to be replaced. We haven't even called it in.

Someone called us with a survey on customer satisfaction, but they couldn't speak English very well and we tried to tell them the part wasn't working, but they couldn't understand us.

[mylife]

"the code is a nearly un-maintainable, un-documented pile of spaghetti"

Ya get what you pay for! Lack of documentation is a pet peeve of mine!

[TroutStalker]

I built a couple of PCs about twelve years ago when I was the business manager for a computer integration company. That was what I remembered about assembling them, plus I had the staff there for support. I might have considered doing it last year except that I was recovering from major surgery and my old PC was dying. The reason for getting the configuration I did was to spend my recovery transferring old Hi8 video to DVD. In hindsight, my project should have been building the PC. Live and learn.

[FR_addict]

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

The little customer use to be their bread and butter. Now, they are going after the large business accounts. They are treating the little guy shamelessly. It may work for awhile, but in some cases the little guy at home is the same one in charge of determining what servers and storage solutions to buy at work.

[Snuffington]

As long as the trade journals keep sweeping these facts under the rug and touting the "huge savings of outsourcing" the trend will continue.

Actually, the trade journals have been pretty consistently spelling out warnings on this. The basic theme is "saving on labor is possible, but..."

What's really driving this, in my opinion, is some financial chicanery on the part of executives. In effect, they're misleading their investors by promising reduced labor cost without impact to productivity or quality. But almost none of them are able to keep up with quality and productivity. The investors can't see that in a quarterly financial report. It's the sort of thing that will take a couple of years to be widely noticed.

In the mean time, companies will demonstrate products that were developed largely onshore - before the offshore fad kicked in - alongside reduced offshore labor numbers. Most investors will assume the company has figured out how to change their development processes before kicking the work offshore, so the current products are a good measure of what their quality will look like going forward. They're going to be shocked when they discover most companies kick the work offshore to claim the labor savings LONG before putting much thought into how that affects their development practices.

[glorgau]

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

When finding out that your call is routed to India, one should do what is termed in the industry as a "hostile hangup".

[FR_addict]

What's really driving this, in my opinion, is some financial chicanery on the part of executives. In effect, they're misleading their investors by promising reduced labor cost without impact to productivity or quality. But almost none of them are able to keep up with quality and productivity. The investors can't see that in a quarterly financial report. It's the sort of thing that will take a couple of years to be widely noticed.

This is exactly what is going on. The numbers look good for a couple of years and the execs get to pull down their huge bonuses for another year or so. Also kickbacks and other incentives are being paid out by the Indian companies.

One offshore company didn't even bother to erase the name in the source code of the American company that paid for the work product before they sent the proprietary source code as product to a second American company.

[cousair]

I am not sure about an extended warrenty after three years. My computer was coming up on three months before the three year mark when the mother board went out. I know you could call and ask, and being the huge company Dell is, why wouldn't they extend the warrenty for extra $$. That makes sense to me.

[Lone Voice in the hinterlands]

The Only reason Dell is bringing some jobs back is becasue of Csutomer reaction. We should learn form this. Every time we have to talk to someone in India when we call a business we should complain like HELL.

It makes me sick to see these jobs going to India. Good for Dell for recognizing that American Dolars who are buying their products don't like talking to India!

[mlmr]

mlmr has been vindicated!!!

I will post the important excerpt from the thread:

I need a New Computer Update: My terrible mail order computer experience

Posted on 03/25/2003 4:41 PM EST by mlmr

http://www.freerepublic.com/focus/f-chat/875386/posts
About a month ago I posted a request for infomation since I was planning to buy a substantial PC. I subsequently bought a Dell. About 2000 worth of computer(Just the CPU,Keyboard and Speakers) Thursday Dell is picking up both the computers they sent out... it has been a terrible experience. The returns man was abusive. He didn't have to be. He had the ability to give me the return but I had to fight for it. The customer service was the same, I had to argue for parts and service. I don't ever want to use them again. Any other computer recommendations for the kind of machine I am looking for??

To: Wright is right!

I would be happy to. I ordered the computer and installed it. It had video card problems immediately and a new card was sent out. Eventually a customer service rep came out to install the card. (this is only after hours on the phone and on my knees in front of the mother board as a woman from India read to me from her troubleshooting manual. sigh!!) Blue screens continued with Bios errors. The cusotmer service rep said he would not touch anything except the video card even though on the phones I was told he would also investigate the bios issues and the blue screens. He took me aside and said, exchange the machine.

After more hours on the phone they finally sent out a new machine. It arrived around twelve days ago and I scheduled someone to help me switch towers today. I opened the box and the config is wrong on the new box and the Read write CD thingie is not installed.

Soooo I call Dell and ask what to do. They initally tell me that they will send out a new Read write CD drive and send someone to install it. then they sent me over to customer service to set this up. This happened twice before Iwas actually connected to customer service. The nice man from India told me that yes, he would send out the Read Write part...but only after I sent back the first comptuer because there was only one service contract and it had to be transfered to the new computer before anything could be done.

Deep breath!!

Then they argued about sending me a rep to install it too.

I went back to customer service and told them I wanted my money back and to take both computers. They said no becasue the first comptuer more than a month out.
I was transferred to a man who refused to consider taking the computers back for twenty minutes. He would not even negotiate with me. He refused to transfer me to a superior or to let me talk to anyone else, including his manager. I was in tears by the end of our conversation. He told me that the exchagne could not be made. He then put me on hold for the second time, to review things, and then made the return.
After he processed the return paperwork, I told him that he didn't have to put me through this...and instead of having a disappointed customer, Dell now has an appalled ex-customer.

I found the customer service to be appalling and heard regret and I am sorry so much in the past month....it was awful.

I certainly would appreciate feedback.


28 posted on 03/25/2003 5:04 PM EST by mlmr

[Happy2BMe]

""I certainly would appreciate feedback."

If you can - get your money back.

If you cannot do this, force the warranty issue and hope for the best.

After that, try and never put yourself through DELL HELL ever again.

Godd luck!

[mlmr]

They took back both the computers and refunded me the money. But it was like a knife fight to get it back. I bought the childen two very nice mid range computers at Tiger select and I will be buying myself a high end and a Laptop there soon.

[mlmr]

We have the same Freeper birthday.

[lelio]

Dell is creating a huge market of un-served upset customers, which creates a business opportunity for someone organized enough to build an independent support organization.

Depends on what Dell they're buying. If they're the sort that goes for a $700 PC they're not going to pay $50/hr for a call, which is what you would have to charge to be anywhere near profitable.

Dell should try and sell "Extra Special Service" for their small business / professional home users that guarantees them an English speaking tech worker that knows a little more than to read from a scripted chart. Perhaps if you charge a $50/month retainer and a $50/call you could make money on it.

[lelio]

I am a Dell Solution Provider ...

Why are they forcing someone that helps sell their product to go through their crappy service line? You would think (*) that they'll give you a special number to call.

(*) that might be thinking rationally a little too much