Offshoring: is it really worth it?

As Chief of Staff at InfoCision, I am constantly looking at newsfeeds and industry updates, trying to keep up on the different trends, rules and regulations that are going to impact our call centers. Recently I stumbled upon an article that caught my eye because it involves one of the most well-known American companies bringing jobs back to the U.S. that they had been outsourcing overseas.

The article – published in the online version of Nearshore Americas, a leading source for IT outsourcing news – was about American automotive industry giant, General Motors, deciding to cut back the outsourcing of its IT services to other countries by over 80 percent! General Motors currently outsources 90 percent of its IT services, but the plan is to cut that to 10 percent over the next three years. This article really got me thinking about how views on offshoring have changed across the business landscape over the last decade.

It’s about more than cost

In the teleservices industry, I have always believed that domestic call centers are better positioned than offshore call centers because more and more companies are beginning to realize that in a market where new customers are hard to come by, they must put a premium on customer service and care to drive optimal levels of customer retention.  In order to do this, they need to have people on the phone representing their company who speak the language of their customers, and can relate to them and empathize with them. But these issues can extend beyond the teleservices industry into other outsourced functions such as accounting, HR, and in GM’s case, IT.

In any industry, when a company makes the decision to send jobs offshore, we all know there is one major driving force for that decision: cost. However, while saving money on the front end can seem appealing, especially in tough financial times, there is much more a business has to consider before making that decision. Language barriers and lower quality of service – between members of your team and the offshore company – can actually create more costs than the company saves up front because they have a negative effect on efficiency. I can’t help but wonder if those factors finally hit home with GM’s leadership team.

I applaud GM for this decision, and for bringing jobs back to the United States where we desperately need them.