Why a Silicon Valley Supplier Brought Its Offshore Call Center Home | Article

phone linesFinding the right talent for its call center has been a perennial challenge for Everdream, an IT services provider, even though it’s based in Fremont, California in the heart of Silicon Valley. The company, which offers an outsourced hosted solution for desktop management, is constantly searching for employees with technical savvy who are also willing to work in an entry-level call center support position. “While these are entry-level positions, we need people who know their way around operating systems and who also know how to treat our customers with the proper level of courtesy and care,” says CEO Gary Griffiths.

The company pays about $30,000 a year to entry-level employees in its Charlotte, North Carolina facility and $38,000 at its California-based headquarters call center.

Griffiths says the company began to consider an offshore option in 2002 because it was worried about scalability. “We were concerned about our ability to grow at the rate we thought was necessary. Even though America was in the midst of a so-called jobless recovery, we couldn’t find the right talent quickly enough,” he explains. Of course, the reduced labor costs of an offshore provider were an enticement, too. But Griffiths says scalability was the primary driver.

The top-down initiative was also a product of outsourcing thinking: Everdream’s management felt the company was a technology company, so it would be better off outsourcing its own call center operations to a call center expert.

In October 2002 the company issued a Request for Proposal (RFP) to 12 companies. Everdream explored all its options, looking at onshore, nearshore and offshore companies. Candidates were based everywhere from Bangalore, India to close by the Charlotte center in Florida.

Choosing Costa Rica over India

“We decided early on that we were not comfortable going to India,” says Griffiths. First, he felt the distance from California was just too great, since Everdream employees would be onsite during the transition phase “when we handed over the crown jewels.” Second, Everdream grilled its prospective suppliers by asking them how they would handle specific situations. “Based on those responses, we didn’t feel the Indian suppliers could maintain the quality levels we required,” says Belle Kulick, Everdream’s Vice President of Operations, who was aware of what the company’s customers expected.

After extensive due diligence, Everdream selected a call center supplier in Costa Rica – the executives felt comfortable in the Central American country. Other technology companies like Intel and Microsoft were already outsourcing to Costa Rican suppliers. The Costa Rican team to be assigned to Everdream had just finished working on a Toshiba account. “We thought once we got the Costa Rican operation working, we could expand our offshore presence to India or the Philippines,” Griffiths says.

Opening a captive operation in a foreign country “was never an option,” according to the CEO. If the company went the offshore route, it wanted an outsourcing partner already on the ground. Realistically, that was not an option anyway since Everdream was only outsourcing 40 jobs; it planned to keep a small US presence as it experimented with this new way of doing business.

After selecting the partner in January, 2003, Everdream began its pilot in February. Thirteen employees and a trainer from the Costa Rican supplier flew to California for three months of training. Then those people, who now formed the core Everdream team, went back to Costa Rica. In addition to manning the call center, their job was to train two more classes to handle Everdream’s work.

Everdream trainers from California accompanied the supplier’s workers when they returned to their home base. The American employees remained at the supplier’s site for 90 days to help the new team become operational.

Problems Training the B Team

The problems arose when the core team attempted to train the B and C teams. “We knew the initial 13 were the cream of the crop. But we didn’t anticipate the wide gap in knowledge between them and the other people assigned to our account,” reports Griffiths. Unfortunately, offshoring didn’t solve the scalability problem.

In its American centers, Everdream figures new agents need eight weeks of training before they’re ready to answer customer questions solo. “We expected an intensive learning curve in Costa Rica,” says Kulick. But the offshore employees who weren’t trained in California couldn’t perform at the expected level. So Everdream employees held a second training session for the Costa Rican team. Over time Everdream realized “they were never able to get to that next level we required,” she reports.

Because the team could not reach the needed knowledge levels, the Costa Rican office needed twice as many agents to handle the same number of calls as the California office. “The lack of productivity wiped out the cost savings,” Griffith calculates.

During the RFP process, the due diligence team had investigated these skill levels. The Costa Rican supplier demonstrated that most of its employees had college degrees. But the American company discovered “their degrees apparently aren’t equal to ours,” Kulick notes.

A Mismatch of Corporate Cultures

Everdream also discovered there was a mismatch in corporate cultures between it and the service provider. The Costa Rican company was used to answering calls about a specific product or operating system that had easy-to-use documentation. It was simple to script responses in a cookbook fashion.

On the other hand, Everdream’s slogan is: “Any problem. Any time. No excuses.” Its employees have to know about several different applications and operating environments. The wide variety of questions they receive daily makes it impossible to script support responses. “We give our employees a high level of autonomy to solve problems. We expect them to think out of the box,” says Griffiths.

In the end, Everdream realized each company had a different management philosophy. “They were a call center company and we are an outsourcing services company,” he explains. “Our customers pay us money because they want premium service.”

Meanwhile, Kulick noticed that Everdream’s customer satisfaction ratings, always at 96% or higher, had fallen to less than 90 percent. “That was a disaster,” says Griffiths. That’s when both parties agreed the arrangement was not working. In March 2004 Everdream moved its work back to the United States and began looking for those hard-to-find people in Charlotte and the Silicon Valley.

While Everdream is back to square one in dealing with its scalability challenge, Griffiths says his team learned a lot from its offshore experience. First, he’s not giving up on outsourcing if he can find the right partner. But for now, he’s going to stay stateside. Everdeam would consider outsourcing a call center to a supplier in a US city where labor costs are lower than Silicon Valley.

Second, the experience was a useful exercise in learning exactly what the company is about. Future training for any new provider would focus more heavily on the key business fundamentals management had to dissect in explaining its business to an outsider.

“Our board says offshoring was a worthwhile experience. We learned what our customers truly value about us. Now we have a clearer idea of what our customers want. And we know more about our business than we ever did,” concludes Griffiths.

Lessons from the Outsourcing Journal:

  • No matter how much due diligence you do, the stresses and strains, if any, will come out when the working relationship begins.
  • Be sure the productivity promised is the productivity delivered. In this case, the lack of understanding lowered productivity, which wiped out any cost savings on the labor side.
  • Make sure your company’s culture matches that of the service provider.
  • Even if the offshoring situation doesn’t work out, you will learn valuable lessons about your company. In this case, the buyer learned exactly what its customers wanted.


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