Outsourcing: Rick Ferry, COO of C3 (Part 4)

SM: What needs to happen? Is there anything that could happen policy wise that would give you a reason to have more presence in the US? Or are there geographies in the US where you could do better cost structure wise?

RF: I think so. And that really gets to the heart of the debates that go on around the world. I think that there will always be an offshore requirement. I really do. There are certain economic drivers that will always be economic drivers. For example, if we look at the Philippines, I think we’re a long way off for the pure economics to be unattractive in Manila. That said, there is a feeling on the part of some US companies that are offshoring such as First Call Resolution, for example, are better affected in the US. That is an opinion, but many companies have a relatively strong feeling about that. If a call if offshored, and the feeling is that it takes two or three calls to satisfy a customer’s concern because of a cultural difference, then the economics work favorably toward the US. But I think that moreover, there’s a fine line between economics and policy. [I question] the wisdom of dictating a policy that might create an isolationist type [atmosphere] in the BPO world. If economics are economics, there are those who take a hard stand, that say, “Jobs are being taken offshore and therefore, taken away from the US.” That’s a bit of an extreme position. I don’t that that’s a position that anyone should embrace.

The fact of the matter is, to find qualified labor, that is willing to work for what price the market will accept and without perverting the large client base, there just isn’t that labor available in the US today without going completely off the economic charts. So, there’s always going to be a good salary arbitrage that is available or for the next ten years, or for the time frame that we’re talking about, the rest of this decade, then for the next six years. I think that play is always going to be there. But there does have to be a reasonable mix. There are just certain cultural aspects where colloquialisms are used, where spending convention, credit convention, for example, is pertinent to the execution of a transaction. Sometimes that is lost a bit in translation when we go off boarder. We find that in Europe, for example, in our multi-lingual, multicultural center in Sofia, which is just blessed with a high level of education and sophistication with many people who have been educated outside of Bulgaria as well as within Bulgaria. When they’re speaking in language to a neighboring country, there are still cultural affectations that don’t come across clearly.

For relatively sophisticated local applications, there’ll always be the need. Now, that said, the environment in which we work can provide a great deal of relief to some of the areas in the US that are hard hit by significant unemployment. If the funding authorities at the local, state and federal governments were to come together to underwrite and offset some of the cost differences and some of the cost benefits that can be realized, companies like ours, in this industry can certainly provide a great platform to get people back to work, get people re-trained perhaps, and to get people into an area where a career path is visible.

SM: If you look at the industry, based on all the dynamics that you just described of what still needs to be offshore just because of the cost structure differentials and what can be reasonably in the US, how many jobs are you talking about? How many jobs can be in the US in this industry if proper training and proper policy or whatever has been worked out?

RF: My goodness, I wish I could calculate that finitely. It’s certainly in the hundreds of thousands, and it may be more. Just from a standing start, without taking business away from any of our folks that are now our competitors, we’ve created almost 7,000 worldwide, close to 4,000 here in the US alone, in less than two years. And we’re still building. By the end of this year, I fully expect that our US complement may be approaching 10,000. So, if you take us as just one relatively tiny company in the industry, the multiplication effect that you would have, just based on that one example is staggering. It can be a game changer.

This segment is part 4 in the series : Outsourcing: Rick Ferry, COO of C3
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