Interview with vCustomer President and CEO Sanjay Kumar

Established in 1999, U.S.-based vCustomer Corporation provides clients with BPO, customer service, and technical support solutions from four support centers in India, which employ more than 3,500 people. Warburg Pincus and WestRiver Capital back the company. Following is an abbreviated version of
ebs’ interview with vCustomer President and CEO Sanjay Kumar.

Q: What are some of the new trends in customer care offshore outsourcing?

A: Companies are starting to measure how effective their customer service is and trying to understand what they can do to improve the customer service process. Historically, call centers would monitor agents by listening in to calls, a technique also known as “calibrating the call.” Today, there are additional ways to determine how well agents perform and, at the same time, get broad feedback from the customer. One way is by getting the e-mail address of the customer and sending them an e-mail survey. Customers are actually responding to the surveys because they realize the value of the whole process. That’s a very critical phase in customer service because you can start to really understand what part of customer service has value to customers and what part is bothering customers.

There is an increasing trend to have the call center representative portray the same image that the company is out there marketing. Another direction the industry is headed in is to use online or Web-based chat as a replacement for voice-based calls. Currently, companies using such technology are primarily Web-based companies or companies that have otherwise invested significantly in Web-based technologies.

Q: What common mistakes do companies make when they outsource customer care offshore?

A: I think that a lot of companies are still amazingly price sensitive. There are companies that are cutting their costs by over 50% by offshoring. Once these companies reach a certain threshold in terms of cutting costs, they should switch their attention to quality and let the vendor know that, “If you give me a better service level agreement, then I’m willing to pay more for it.” But we rarely find that to be the case. It’s very rare that a company can get past the cost savings. A significant set of companies do not see customer care as strategic to their companies and will need to change.

In customer service, the challenge today is that most offshore decisions are driven by tactical rather than strategic issues. If the decision is not driven by tactical issues, then it’s driven by a budget. An example of what happens is the CFO will come and say, “I heard XYZ company cut its costs by 40% in their customer service by offshoring to India. Why can’t you do it?” The pressure is then on to achieve even greater savings so that the manager can look good for his CFO. The decision must be taken across departments so that both quality and cost can be emphasized, thus allowing both drivers to have an impact on the final solution.

Q: Have you witnessed failure in the offshore customer care marketplace?

A: Failure is unfortunately as common as success. The challenge is that both sides have to be willing to engage in an honest dialogue on expectations and goals. Often, the client will have unrealistic goals that the vendor will feel the need to agree to, even though the vendor has no ability to deliver. Thus, the first step towards failure is not assessing the vendor rigorously enough. The two primary concerns with offshore vendors are the infrastructure to support a good-sized operation and the offshore management team. Many failures are due to one or both not being of a certain standard

Setting expectations too high can also result in the perception of failure. Even though in reality the process has succeeded, the expectations have not been met. These kinds of failures are often the result of a combination of overzealous vendors and unrealistic clients.

Q: What are some of the unexpected challenges of providing offshore customer care services?

A: From an operational perspective, the biggest challenge was the realization that in India middle-tier management does not exist. To add to that, implementation of even simple processes is typically done in a very ad hoc manner. There is a lack of discipline and very limited independence granted to the middle management tier. This results in a situation where they are not allowed to fail, so when they are faced with a challenging situation, they tend to freeze and look elsewhere for guidance. It took years to build a layer of middle management who could make decisions and who would shoulder responsibility and take ownership.

One of the other challenges was infrastructure. Few service industries are designed to be 24x7 in India, and thus there was no 24x7 mentality. We have had to overbuild the infrastructure substantially. We have multiple levels of telecom redundancy that come at a significant cost. Clients do not expect the infrastructure to be any less reliable just because the service is being delivered from an offshore location; thus, the uptime requirements justify the expense.

Finally, I have to say that the most surprising aspect has been the speed at which the folks in India adapt to Western practices. They learn fast, really, really fast.