RealTime IT News

Dell Affirms Commitment to India

In response to recent complaints about customer service calls, Dell Computer is bringing some of its overseas business customer service back to the U.S., but stressed that it remains committed to its call centers in India.

Published reports said Dell would be moving some of its business customer service calls from its technical support center in Bangalore, India to facilities in the U.S. But Barry French, director of public affairs for Dell Computer, said reports that the company is moving all of its call centers out of India are "completely false."

"We remain committed to India and we constantly make changes to optimize our operations in order to give customers the best possible experience," French told internetnews.com.

The shift comes as lawmakers and IT workers alike grow increasingly concerned about the spread of IT jobs to overseas markets, along with many call center functions.

Even India's Business Standard on Tuesday reported on Tuesday that India's IT and communications minister Arun Shourie said the emerging backlash in the U.S. against outsourcing to India is a "cause of concern."

Reports said customers calling Dell's customer care centers with questions regarding its Optiplex desktops and Latitude notebook personal computers would now be handled by representatives located in Texas, Idaho and Tennessee.

French declined to comment on which call centers support which of its computer customers. He said Dell is only shifting some of its commercial customers to the U.S. technical support services. "We're not making any reductions in the size of our India operations," French said.

Dell's decision to shift some of its business customers to U.S. call centers is part of the company's ongoing assessment of improving its customer service, and not a sign it isn't supportive of its extensive operations in India. Dell's Bangalore and Hyderabad facilities employ close to 3,000 people.

Many companies have set up call centers and other outsourcing operations in India over the past few years in a drive to generate cost savings.

"We do hear from our customers about their concerns and since we have a direct relationship with them, we're always trying to understand root causes of issues in order to provide the best customer experience possible," French said.

While setting up call centers and outsourcing operations offshore can save companies in labor costs, sometimes language problems and other training issues can complicate the level of offshore customer service.

French would not comment on any specific customer complaints about the company's call centers in India.

It is unclear exactly how much money Dell has saved by setting up customer call centers in India, and other countries around the world. But the company's decision to bring some of its call center operations for its business customers back to the United States, points to the importance the company assigns its enterprise strategy.

Forrester Research predicts that over the next fifteen years, 3.3 million U.S. service-industry jobs and $136 billion in annual wages will move to India, the Philippines, China, Malaysia and other countries with skilled labor and lower wages than U.S.-based jobs.

But in the meantime, lawmakers are stepping into the debate. Currently, legislation is in the works in eight different states that seeks to protect U.S.-based jobs from being sent overseas for outsourcing operations in India and other countries.

In the past week, the state of Indiana cancelled a $15.2 million contract with an Indian company to upgrade the state's computer processing of unemployment claims. Tata America International Corp. was granted the contract, but then the contract was cancelled on November 20 when Indiana Governor Joe Kernan revoked it, and granted it to an Indiana-based company.

Indiana state senator Jeff Drozda has said he will proceed with a December 1 hearing on Senate Bill 4 that would require that contracts for services entered into by an Indiana state agency must specify that only U.S. citizens authorized to work in the United States can be hired. The measure is politically popular and legislators are seen as protecting local jobs.

But despite the domestic U.S. backlash against outsourcing around the world, India's National Association of Software and Service Companies, one of the country's leading information technology lobby groups, said close to 1.3 million U.S. jobs would move offshore between 2003 and 2010.

India argues that the U.S. will face a domestic labor shortfall of close to 5.6 million by 2010, resulting from slow population growth and an aging population in the U.S.

"If the labor shortfall is not met, the U.S. economy will lose out on growth opportunities resulting in an estimated cumulative loss of $2 trillion by 2010. Global sourcing in the form of immigration, temporary workers and offshoring can overcome this shortfall," said the NASSC.

The Indian group went onto say in its report that for every $100 of call center work sent offshore by U.S. firms, $143 was invested back into the U.S. economy in the form of repatriated profits, increased sales and cost savings.

Gartner Research has predicted that by the end of 2004, one out of every 10 jobs with U.S.-based IT vendors and IT service providers will move to emerging markets, along with one out of every 20 IT jobs within enterprises.

Although the financial benefits of sending jobs to lower-wage economies is well-documented, Gartner also warned executives to be wary of other impacts, such as loss of future talent, loss of intellectual assets, and loss of organizational performance.