Siemens Follows The Sun To India

Siemens has implemented a full-service travel support center for U.S. and Canadian operations in Bangalore, India, to which it now drives more than 25 percent of its North American business. These pioneering efforts may blaze a trail for others interested in offshoring, but also demonstrate that benefits are greater for those primarily seeking to enhance global service rather than reduce short-term costs.

Hanna Murphy, Siemens Shared Services vice president of general services, emphasized the importance of the German telecommunications and industrial manufacturing giant's investment in agent training and said that, with a stable of 87 qualified agents and a workflow of complex international itineraries, Siemens' 65,000 U.S. and Canadian travelers have less incentive to book online. While the company has attained 40 percent adoption of online booking, its need for knowledgeable, efficient, 24-hour, agent-provided travel service has become paramount.

Faced with an overwhelming number of customer service queries filed daily to the Siemens Advanced Customer Service Tool—a platform launched four years ago to manage the flow of service comments and requests, to which Siemens' eight preferred suppliers have access for review—Murphy said she had to find a more effective, immediate way of dealing with traveler support.

"We got 22,000 comments in the first two years of using that platform," she said. "I had to figure out, should we extend headcount, upgrade technology, extend office hours?" Today, with an after-hours call center in Dallas and full travel operations in India, said Murphy, "When you come into the office the next morning, those issues are resolved 90 percent of the time."

The benefits of "following the sun"—staffing an office of agents on the other side of the globe for consistent, round-the-clock care—quickly became apparent to Murphy. This, however, was hardly the typical approach to offshoring. Siemens has had a business presence in India since 1876 and has 10,000 employees across the country today. "When I did my little exploration tour, I found India was the perfect place for this. Their daytime is our nighttime and the population is bilingual, which helps a lot," said Murphy, who enlisted the help of Atlanta-based partners WorldTravel BTI and TRX to tackle launching an offshore travel management operation in India.

"Hanna had painted this as a wasted opportunity, and I was looking for a better way to understand what was happening in India," said Mike Buckman, CEO of WorldTravel BTI, who already had worked with Murphy to establish the Dallas call center in late 2003. "Until you've seen it, understood it, you really don't know anything. I was even more excited about the opportunity after I'd actually seen the possibilities."

The travel management company, working with other clients, had been exploring the potential of setting up operations in India. Buckman said he saw no downside to the prospect of immediately partnering with Siemens in the experiment. With no experience in the country, he said, "We knew that working with a company that's already so well-respected in India, and having a culture like the Siemens travelers who are used to dealing with people from all over the world, would really help out a lot."

Three months after embarking on the India project on "nothing but a handshake," said Buckman, agents had been hired and trained, facilities had been installed and the Bangalore center was fully operational. Though the implementation went smoothly, all involved agreed that setting up shop on the other side of the world is not without its challenges, and popular criticisms of offshoring, particularly on the customer service side, merit consideration.

"If the primary reason you're going to India is to lower cost, you're going to be sorely disappointed," said Vic Pynn, executive vice president of TRX. "You will achieve cost savings, but the primary part we looked at was following the sun. I needed a pool of labor that I could get my hands on that would still be developing while I was sleeping. If quality and servicing of global clients is not your focus, then you might want to rethink it."

Mark Majewski, senior vice president of operations at WorldTravel BTI, agreed that, while long-term savings are likely, the start-up costs of establishing offshore operations in India are significant and, as the salaries of Indian employees continue to rise, maintaining that level of service may be more expensive than many companies anticipate. "No one should expect savings in the first year. The cost of training, the time of training, the T&E involved, eats up savings," he said, "Savings should be 25 to 35 percent based on the amount of attention dedicated to the operation over the long term."

Majewski and Murphy also noted that the Bangalore center, which employs 50 agents and five support staff, was established without impacting U.S. employee headcount. "We were fortunate to still be in an expansion mode with this customer," said Majewski. "We were able to transfer jobs to India without depleting the U.S. workforce by sending some of the more task-oriented jobs to India."

Still, overcoming geographic and cultural differences, said Majewski, seemed at times insurmountable. "There's almost exactly 12 hours difference. The logistics of getting things done, due to either distance or timing or shipping, are unique," he said. "It's really understanding what you're up against, and one of the biggest challenges is the complexity of dealing in a worldwide market, something that's absolutely on the other side of the world."

By addressing cultural differences through accent-neutralization training and what Majewski deemed "Travel 101"—classes in American travel behavior, jargon and slang—Siemens, WorldTravel BTI and TRX were able to tap into a well-educated, motivated workforce. "The desire to succeed is just phenomenal there," said Majewski. "They try so hard with everything. They're never done at the end of the day. They want to do more, practice more, spend time on the weekends practicing."

Some cultural differences, however, simply have to be accepted and respected for an offshore operation to work. "As I always say, you've got to know when India is playing Pakistan in cricket, because the whole country takes a four-day holiday," said Buckman.

Despite the apparent success of the Siemens India program—which Majewski anticipates will handle 50 percent of U.S. travel support in the imminent future, and which Murphy hopes will soon begin to serve Siemens travelers in several countries in Asia—Buckman doesn't expect to see such a practice become a sweeping trend.

"We've learned enough now that we could provide similar support for other companies," Buckman said, adding that he has seen increased interest in offshoring since taking on the Siemens' project. "Still, I don't think it's going to be any huge thing. I don't think we're all going sit back one day and say, 'Wow, this just blew up.' "