2 Summaries (Chapter 7&8)

NEWS SUMMARIES

2007

A May 30 article from USA Today addresses one of the most contentious issues in

American business today : outsourcing . The article , When customer service is lost in translation

documents the dilemma of travel agency executives who must balance customer service with

financial considerations

Reporter Bill McGee explains that an increasing number of agency call center positions

are being filled by employees overseas . This offshore outsourcing represents an attempt by travel

executives to cut overall business expenses . McGee lists Travelocity as a prime example

of

outsourcing temptation . When the company moved most of its positions to representatives in

India , savings in labor costs exceeded ten million dollars . With the unpredictable nature of the

travel business , such cost-cutting can become a lifeline for many struggling companies

However , the article highlights an affected and essential component of business which

may actually cause executives more financial strain in the long-term customer service . McGee

details numerous horror stories from travel customers whom have spoken negatively about their

call center experiences . Complaints range from mixed up flight times to disputes over infant

carrying seats . Critics condemn travel outsourcing precisely because they believe foreign

representatives lack the linguistic and cultural understanding necessary to properly address

concerns from busy customers

Even travel agency executives acknowledge that customer service may be suffering

McGee quotes business executives who are either responding to numerous customer complaints (by cutting or eliminating outsourcing practices altogether ) or who are attempting a compromise (charging customers a fee to speak with American representatives . Since a sizable portion of

travel business relies on repeat customers (frequent fliers , these executives are taking steps to

ensure that short-term savings do not adversely impact long-term profit

In addition , the article describes a benchmarking effort for the travel industry courtesy of

travel site Kayak . In the true tradition of benchmarking , Kayak identifies problem areas within

the travel call center industry (such as difficulty in accessing a representative over the phone

and grades these particular aspects within several travel agencies Utilizing electronic technology

known as gethuman 500 , Kayak is attempting to improve both its own business and assist the

travel industry as a whole by targeting practices which work and - more importantly - those

which do not work

This article provides a focused assessment of outsourcing and its consequences , as the

outsourcing debate spreads to more organizations and more business communities around the

country On June 19 , CNN online writer Jessica Dickler posted an article which proves that

managerial challenges affect every type of business . The article entitled A popular tanning biz

feels the heat , objectively reports the struggles of The Tan Company manager and founder Todd

Beckman . Dickler recalls the company 's rise and possible impending fall in the tanning bed

industry

When Beckman transformed his small store and service into a thirty-plus bed superstore

the executive was hopeful . The hope was realized when his start-up later became a thriving

franchise with close to 100 businesses in numerous states

Now , however , Beckman faces the realities of an evolving culture...