Tuesday, March 16, 2004

Giving Consumers a Choice About Offshoring

Amid the hot political and economic debate on outsourcing, sometimes it pays to ask parties directly affected by it – the consumers.

A US loan company called E-Loan did just that and found out that most of its customers do not really care whether the service is done locally or in India as long as they remain satisfied with the service.

86 percent of customers chose to ship their loans abroad for speedier service. Home equity loans processed in India close two days faster than those that stay in the US, according to E-Loan.

But that’s not to say that workers in India are superior to their counterparts in the US.

The reason loans close faster when outsourced is because the company can utilize the 24-hour time clock. There's about a 12-hour time difference between the US and India and that enables outsourced loans to be processed while American workers are sleeping

Critics of outsourcing often raise privacy issues especially involving sensitive information like, in E-Loan’s case, a customer’s financial background.

E-Loan’s CEO Cris Larsen did point out the fact that some lenders do not disclose to customers about outsourcing projects offshore, primarily due to the mounting backlash against outsourcing.

But he believes those companies that try to hide the fact that they are outsourcing certain processes and functions only contribute to the negative backlash associated with the trend.

The wisest thing to do then is to choose a good partner that offers the highest levels of privacy and security. In E-Loan’s case, it chose Wipro - already one of the biggest names in the business.