How important is offshoring to your financial services company's information strategy? If you're like many CIOs in the field, you've spent a nontrivial amount of time coordinating the activities of call centers in multiple locations and making sure international support and sales efforts appeared to be a seamless 24/7 entity to prospects, customers, and partners. If a bill gaining support in the House of Representatives becomes law, the economics around those call centers could change in substantial ways.
The US Call Center and Consumer Protection Act (HR 3596) has a rather straightforward purpose: Remove incentives for US companies to set up call centers outside the US. With the backing of the Communications Workers of America (the largest union representing telecommunication workers) and 77 co-sponsors in the House, including Democrats and Republicans, the bill has a reasonable chance of passage, even in an election year.
Of course, it would still have to pass the Senate and get the president's signature, but for the moment, let's pretend those could happen. What would the bill really mean for companies that depend on or are contemplating international call centers?
First up on the list of effects would be the loss of federal grants, loans, or loan guarantees for five years for any company that moves a call center out of the US. That would be a particularly bitter pill for companies with international operations, which often depend on government loans and guarantees to expand their business, carry out marketing programs, or finance capital purchases for new facilities. Financial services companies wouldn't be hit with the sort of inventory-financing difficulties that the loss of government loans and loan guarantees might mean, but there are still significant liabilities attached to the loss of such programs.
The penalties wouldn't stop there, of course. According to ComputerWorld, the bill contains provisions that would mandate a 120-day notice before a call center could be moved out of the US, require call center operators identify the country where the center is based, and require the operators to transfer the caller to a US call center if the caller requests it.
The first of these provisions wouldn't be a huge operational deal for most companies, though it would provide ample time for opponents of the move to turn it into a big deal for corporate PR. The other two are intended to be disruptive to operations (and they would be) by adding to the script for call center operators, breaking the flow of interaction with the caller, and providing an opportunity for a significant delay in the transaction as the call is transferred to a US center.
As I mentioned above, there is no guarantee the bill will become law. In addition to the institutional hurdles that must be cleared, the governments of India and the Philippines are lobbying against the bill and can deploy significant resources to this cause. Regardless of whether the bill passes in anything like its current form, its existence is an indication of the mood in Washington and much of the country. In a still-fragile economy, companies must be sensitive to the wishes, preferences, and, yes, prejudices of their customers. CIOs in financial services companies would do well to have contingency plans at the ready should the political and economic climates change for international call centers.
Keeping a close eye on Congress isn't a bad idea, either.