On Thu, 23 Oct 2003 12:25:12 +1300, sal <> wrote:
>On Thu, 23 Oct 2003 11:59:09 +1300, steve <> wrote:
>
>>
>>My sister-in-law in Wellington called the Hewlett-Packard support line
>>recently because they had problems with a laser printer not working.
>>
>>The call was answered in India. The person at the Indian end of the
>>phone had considerable difficulty with the Kiwi accent and my S-in-L had
>>to spell out a lot of what she was trying to convey, letter by letter, as
>>the details were recorded in the problem tracking system.
>>
>>She was on the phone for over two hours. No doubt cheap and efficient for
>>HP(!).....but a horrendous waste of time for S-in-L....and the printer still
>>doesn't work.
>
>
>They must have chnaged their call centre in the last year, as it used
>to be in NZ. Dell also contract out to india, and a few of my friends
>have had huge problems communicating with them, especially as one of
>them is a little deaf.
I've had to call Dell several times this year because of hard drive
failures etc.
After the first time one was replaced, I had to call so the tech could
go through the reloading program process with me - she was located in
Texas.
Since then, all my calls to Dell were answered in India and I would
agree with Steve and you, the lingo problems are often huge.
I need to call J C Penney's customer service a while back on two
occasions - they used to be located in the US. Now they are located
in India. I closed my account immediately I realised that they had
access to every personal detail including my social security no and
could easily sell off my details/id theft.
Blame India for that jobless recovery by Alan Kohler
http://www.smh.com.au/articles/2003/...988273910.html
October 2, 2003 American Express has its fraud analytics department
based in India - 60 PhDs sit in a room watching credit card use
patterns in America, looking for fraud.
JP Morgan has a team of research analysts in Mumbai; another
investment bank has a team of PhDs in Moscow doing global quantitative
analysis; McKinsey has a research centre of 130 MBAs just outside
Delhi.
General Electric is hiring 2000 people a month in India; HSBC now does
all its mortgage processing there; Ford employs 1000 design engineers
in India.
Neptune Orient Lines has centralised its global accounts receivable,
accounts payable and general ledger operations in Shanghai; Motorola
has its R&D centre in Russia, where it employs rocket scientists to
design mobile phones.
Meanwhile, back in Washington, American politicians are becoming
obsessed with the jobless recovery in the US.
As Steve Roach of Morgan Stanley reported this week, 21 months into
the economic recovery that began in November 2001, US employment has
fallen 1.2 million. Relative to the average pick-up in employment at
this point of the cycle, that represents a job shortfall of 4.2
million.
This is beginning to overtake security as the number one political
issue in the US, and much of the focus is on China. A rise in
protectionist sentiment is showing up in a new bill proposing an
across-the-board tariff on Chinese goods unless China floats/revalues
the yuan, and yesterday Treasury Secretary John Snow promised to keep
up the pressure on the Chinese to float the currency.
There's no doubt China is taking a leaf from Japan's book and using
the currency to improve export competitiveness, but there's much more
to it than that. There's India, and services outsourcing too - also
known as "offshoring", or "best-shoring" among the real jargon hounds.
Employment in the US services sector has remained unchanged over the
past 21 months as the economy has recovered; usually the services
industry headcount has grown 5 per cent by this stage of the cycle.
The employment growth is happening in India instead.
It is mostly a labour cost arbitrage play. An Indian PhD costs less
than $US10,000 a year - 80 per cent below the starting salary of a
similarly qualified person in the US. Indian universities are
producing 2 million graduates a year, all of whom can speak perfect
English.
The other side of this coin is the western corporate focus on
headcount as a management tool. It's not just that companies contain
costs through blunt headcount restrictions - although that's a big
part of it. It is also the use of headcount to allocate overheads
through the group.
I spoke to two Australian investment bankers this week - heads of
Australian branches of big Wall Street firms - who are being driven
mad by overhead allocation. Every time they hire someone, the person's
salary is loaded up with a corporate head office allocation -
including the cost of the corporate jets parked at La Guardia - which
is often greater than the salary.
What's more, when you are at the end of the food chain - like
Australia, say, or Des Moines, Iowa - you end up copping a
disproportionate share of the head office overheads because those
above you have kept their share to a minimum before passing the
parcel.
But supply arrangements with other organisations - say an Indian call
centre contract with Accenture - don't attract any overhead allocation
at all.
The bottom line is that the American corporate system with its focus
on headcount, also used by most Australian firms, is directly leading
to the so-called "jobless recovery". On the other hand, executives and
directors have a fiduciary responsibility to shareholders to lower
costs where possible, and there is a snowballing effect taking place
as companies find their competitors are getting big cost savings by
shifting the call centres to India.
The system of offshoring now gathering unstoppable momentum has been
made possible in the past few years by high-bandwidth
telecommunications, which allows processing centres in low-cost
countries to communicate seamlessly, in real time, with head office.
Although firms like GE, Ford and the US banks are leading the trend in
the US, and the consultants like McKinsey, Accenture and
PricewaterhouseCoopers are pushing it, offshoring is slow to take off
in Australia.
There is great sensitivity here about how the unions and politicians
will react if call centres and data processing are moved offshore too
quickly. Recently, a few hundred unionists stopped traffic outside
Telstra's Melbourne headquarters protesting about its IT processing
contract with Indian firm Infosys.
This Australian reluctance so far is why this country's economic
recovery is so far not a jobless one - like America's is.
But protests or not, Australian firms will be forced to catch up:
drudge work, whether making shirts or data processing, is moving to
cheap-labour countries.
Australia will become a nation of salespeople, waiters and - one
sincerely hopes - journalists. The Mumbai Morning Herald, anyone?
####
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