I know it's early, but in the spirit of preparing for the fall, I'd like to share my perspective about what I will focus on in an upcoming piece about call center offshoring; the piece will appear in the October issue of Customer Management Insight.

Here are some of the questions to which I will seek answers that reflect various points of view:

1. How accurate are wages as indicators of labor costs for prospective offshore call center locations? To phrase this question in another way, what other factors, in addition to wages, should companies consider as they evaluate potential costs and benefits of offshoring?

2. What factors are most likely to influence the quality of customer service that is typically available from leading offshore call center locations? To what extent, if any, could the quality of service that is typically available from a given region justify labor costs associated with that region?

3. What role do attrition and labor scalability in a given region play in encouraging businesses to look into locations they might have otherwise not thought to consider? What are recent examples of lesser-known offshore call enter locations that are benefiting from labor saturation in better-known regions?

4. Given that an increasing percentage of American consumers speak Spanish, to what extent do you expect call center operations that are based offshore will tap Spanish-speaking labor forces to serve American customers who speak Spanish?

5. What other trends in call center offshoring should companies be aware of?

Stay tuned for further thoughts about call center offshoring.

I've been meaning for some time to write about a presentation given at the Offshore Conference in June by Peter Ryan of Datamonitor. Sitting here almost three months after the fact, looking at the printouts of his slides, I'm still amazed at the richness of the data.

One of the highlights of my recent trip to Cairo was participating in a panel discussion about the different attitudes toward offshoring in the US and the UK. I represented the US point of view along with Keith Fiveson of ITESA. (Ironic, isn't it, that the American contingent consists of two guys named Keith from New York City?)

Canadian radio journalist Jacques Poitras did a three part series on Indian outsourcing last month: "My reasoning was simple," he writes on the CBC News website. "In the 1990s, the government of New Brunswick attracted many call centers to New Brunswick, to both create jobs and to try to lay the foundation for our own information-technology sector. Now India appeared to represent a growing competitive threat to those efforts."

Poitras went to Bangalore for a week to learn about New Brunswick's competition in the global outsourcing trade. Can a Canadian province, now in the "mature" phase of its call center growth compete with a country that boasts high education and English skills with rock-bottom wages?

Part three of the series focuses on near-shoring in Canada. Unfortunately for New Brunswick's call centers, "Part of Canada's near-shore appeal is as a trial run," says Poitras, "for clients who want to get the hang of outsourcing before they move their work totally off shore." However, near-shoring is predicted to triple before 2010, he says.

Where do you stand on off-shoring vs. near-shoring? Should North America try to compete with the Indian outsourcing juggernaut? Tell us what you think.

All three of Poitras' radio segments (which average seven minutes each) can be heard on the CBC Web site.

In a new book, The Pro-Growth Progressive, Gene Sperling, a former economic advisor to President Bill Clinton, recalls what students at the Indian Institute of Management in Bangalore initially understood when he met with them in 2003. Sperling writes that the students thought he was referring to outsourcing jobs to Africa and to poorer regions of India.

He then points out another development that might seem counterintuitive to many Americans, which is that an Indian company, namely the business process outsourcing arm of the IT services firm MphasiS, opened a call center in Mexico to serve Spanish-speaking customers in the U.S.

The two examples from Sperling’s book challenge several assumptions that a lot of Americans have about outsourcing. One is that America is the only place from which call center jobs could conceivably migrate; another assumption is that call center jobs move to and not from (or within) India.

But globalization isn’t a simple matter of one region gaining jobs at the expense of another. Its effects are both positive and negative for consumers and workers worldwide. The good news about globalization is that there are more consumers than ever to compete for; the bad news is that there are more workers than ever to compete with.

An Indian think tank calls call center workers "cyber coolies" and rogue call center recruitment agencies are cheating centers and potential employees.

A press release from Five9 about their ability to command a meeting with the President of the Phillipines (for economic development reasons) indicated that the small country may be one of the biggest emerging call center powerhouses in east Asia. Five9 says it might expand operations in the Philippines to create hundreds of small-and medium-sized call centers that are expected to generate more than 90,000 jobs over the next 12 months.

Small- to medium-sized hosted call centers are projected to become a $5 billion industry by 2008, making the Philippines a player on the global stage in customer care. The country has an articulate and English-conversant employee-base.

[We're looking for contacts and industry info from that part of the world for future editorial coverage - if you have insight, send an email to hsheff@cmp.com.]

Datamonitor has some interesting numbers out today about the impact of globalization on American outsourcing:

• In 2004, 37% of the world's outsourced contact center agent positions were in the United States. By 2008, Datamonitor expects that number to shrink to 25%. In fact, the number of US agent positions is expected to drop from 315,000 in 2004 to 291,000 in 2008.

• Nine out of ten jobs lost in the United States contact center outsourcing industry will be outbound telemarketing jobs. This is attributed to the Do-Not-Call registry and the higher revenues offered by inbound work. In addition, the number of agent positions in offshore and nearshore countries will continue to grow, due to the growing demand from US and captive market businesses.

• Contact center outsourcers are introducing new services to grow revenue and compete more effectively in the US market. Firms that were founded as contact center outsourcers are offering services which overlap other business process outsourcing (BPO) areas, and BPO providers are acquiring contact center capability.

Are there really only 300k outsourced stations in the US? That tracks to something like 5-10% of the total agent population, if you use the accepted figure of 3-5 million FTEs in the US. Doesn't that suggest that the industry as a whole - separate from the outsourcers - is pretty healthy? Outsourcers do, after all, operate in a completely different economic model than traditional inhouse centers.

A representative of Raya contacted me with a rebuttal to my questions. Here, in its entirety, is what Nevine Soliman had to say:

In response to the article titled “What Should Egypt Do?” published on February 8th, in Call Center Magazine Web log by Keith Dawson, speculating why Raya is targeting the US offshore outsourcing market, we would like to provide the audience with the actual rather than the speculated reasons.

Read the full text at this link. Scroll down for the Raya comments.

I'll have some response to their response soon.

Seems that Dell is opening a new call center in India. Not much news there, as they are thought to have as many as 6,000 seats, built up since they first hit Indian shores in 2001.

What's key about this news is that there are two hidden trends bubbling to the surface in the offshoring debate, exemplified by the Dell example.

One is that offshore is coming to mean more than just call center services; Infoworld says that Dell's set up a product development and testing group team in Bangalore, and a software development center. Message: India is for everything, not just customer-facing services.

Second point is that labor pressures seem to be creeping into the equation, despite India's huge educated population: "Faced with a shortage of good quality staff in large cities such as Bangalore, Mumbai, and Hyderabad, a number of multinational and local companies are exploring the option of setting up their call centers and business process outsourcing (BPO) operations in smaller towns."

After all, how many American cities could support the kind of unbelievable growth curve experienced by India in the last half-decade? 6,000 agents just for Dell? The InfoWorld piece is here.

Today's news has an item about a study comparing costs in various locations around the world. The basic conclusions I read from this and other reports seem to be:

* The closer to the US you get, the higher your costs, but the more stable the region. That's the key trade-off - "stability" (which is an amorphous concept) versus cost.

* For every linguistically oriented locale you may need, there's another one ready to roll at lower cost. German? Think Poland or Eastern Europe if you want closeness, Turkey for cost. French? How does Morocco sound? Tunisia?

* The arbitrage between labor costs in different locations are going to create a wide playing field for any country or region that wants to get in the game. And yes, it is a game at this point.

I think we'll see two diverging trends in the next year or so. First, small locales will start differentiating themselves on the basis of language, cultural affinity with bigger markets and niche services. And second, the large offshore markets like India will see costs rise and try to diversify into more all-purpose providers of business services. Like what Ireland did ten or fifteen years ago, until it reached the point where the labor arbitrage wasn't what was attracting business, it was the quality and diversity of the country's service offerings.