Outsourcing's Hidden Cost: The Dell Example

I recently tried to purchase a new server from Dell server. I wanted a Dell 650. I was browsing the outlet store @ the time. So I opened another browser window. I went to Dell and began ordering. I got a phone call and then went back to ordering. I wasn't paying attention and completed the checkout at the Dell Outlet Store. The servers were nearly identical price. So I ended up with a 400 SC being shipped instead my 850. I did notice when I received the email confirmation. So I quickly called the Dell Outlet but they closed at 4:00 PM PST. So I called the sales line. They stated that they will not be able to help me as the order was placed with the outlet center. So after an hour of trying to fix it, I give up and order an 650. I call the outlet center the next morning (7:00 AM PST) and find out that the item has already shipped. I asked them to pull it off the truck but they state that's impossible - Why? Because this support center has been sent off shore to India and they are unable to stop it. When I pointed out that it certainly hasn't left the Dell facility, they said there is nothing they can do, they have their procedures. They are not even in the same country as the warehouse. I spent another hour and a half trying to correct the problem. Eventually I gave up and thought well maybe I can use the server since I suspect returning it will be an equal nightmare.

This highlights one of outsourcings hidden costs. Every company over time builds up informal information structures and communication structures. Usually this is in response to meeting customer needs. I have experienced this first hand before when I purchased from the outlet store. I was buying a system for my brother at the outlet store and needed more RAM. (BTW this was before the the customer service center was outsourced to India.) I had already placed the order and needed some changes. I called the customer service number, got a rep who was able to make the changes I need by emailing production and making the changes and billing my credit card seperately. Not the normal procedure but it got the job done. Companies every day have informal structures like this that sprout up like a spider web around the company. They serve to meet customer need and route around damaged processes.

Outsourcing kills these informal connections by severing them completely. By not having these informal connections through out the company, the outsourced division can only follow the rote script. Which in my case was followed to the letter. The script was followed politely, and courteously but it did not solve my problem. Instead I spent 2.5 hours dealing with the problem, still not getting it resolved and the few dollars I saved with Dell was completely wasted as I spent much more trying to correct the order. I have a few questions for Dell.

1. Why can't I change or delete my order with Dell online like everything else I buy online?
   
2. Since you have outsourced the entire customer service division for refurbished systems why do they keep Central Time hours? I spoke with over 20 reps at the center and every single one was Indian (Bangalore I think from the accent). Why not keep all business hours in the US? Isn't the business in California worth it?
   

Intuitively I know the answer to the first question. Dell is about shipping units, not customer service. By shipping the unit they book the revenue. It doesn't answer the second question though. It couldn't be that hard to add 4 hours to the time that customer service is available could it? Especially give than you are saving tremendously on a per hour basis. Aren't your customers worth it?

On Tuesday I attended the Occidental Business Associates Award Dinner. Patricia Sueltz, the executive VP of professional services at Sun Microsystems accepted her award as business person of the year and spoke about the network is the computer- Sun's mantra for 22 years now. It got me thinking about the nature of knowledge management right now. Right now knowledge management is in an incredibly poor state, with islands of human knowledge scattered in an unconnected archipeligo. The problem I face and I am sure everyone else faces is that too much information resides on client side. I store my documents locally. I do my spreadsheets locally. Yet my machine is an island even from my other machines like my laptop and my three home machines. I carry much of my information in a USB hard drive. Yet this seems a wholely inadequate solution. Knowledge and information gains value when is is shared, compared and inferences drawn from it. Services like Blogger partially address this problem through RSS feeds, yet even this information remains relatively isolated.

Too much of the computing experience is machine specific when it should user specific. Information that should reside on the network instead, resides locked away on a specific machine somewhere. Yahoo's desktop is the beginning of a networked desktop - a least it is accessible from multiple machines and multiple browser types. Yet to commit to using it is to commit too enclosing your knowledge and information in that island. This is generally true of systems like Sourceforge or any online project management software. You must commit your knowledge to a system. Of course with a standards compliant system, you can with some work get that infromation out in a way that you can use in other systems and with some work you can even do some of the valuable data mining that bring even more value to data. It wasn't that long ago that knowledge was even more compartmentalized and seperated in physical journals, books and micro fiched readers. I just guess I am anxious to get the next generation systems. Systems that have knowldge of my habits, interests, like and dislikes, what i read and what i don't. That's certainly the next few steps with Xao.

I was thinking about Google the other day and it struck me that we very much live in the Google universe. Google for me is the end all of search engines due to it's incredibly broad coverage of the internet and in general human knowledge. Simply put Google is the resource for searching for pretty much anything. Well that got us thinking @ Xao. How to improve upon that search? What features would we want that we currently don't have in Google? One of our solutions is a more extensive and permanent history of the user's search history. How many times have you been searching for something at Google, find what you are looking for after a couple of tries and then a few weeks later try to remember the exact same search? I do it all the time and usually it takes the same couple of tries (or a different set since you no longer remember the exact search query). So to address this we have created an application which remembers your search and visit history. That way you can quickly look up what you were looking for on a particular day, see the sites you visited and the terms you searched on.

You might say,"Well the browser history and bookmarks of IE all provide these features." While that is certainly true, those are seriously flawed ways of using the network. Firstly they are annoyingly machine specific. My search history is only on the current machine that I am using. Depending on the settings of IE, this history is set expire (usually within 30 days or so). Additionally the history function of IE is very difficult to use, clearly not much user testing has gone into the feature. So our first attempt as a complete search history is here at Xao. For the full set of features you will need to register, however, none of that information is stored in a form that we can read (we encrypt it all). Right now we are pretty quickly hitting our query limit with Google, so you don't get the full effect. We are going to Gigablast But try it and let me and let me know what you think.

I am sitting at my computer on Saturday morning playing Warcraft online. I am heavily involved in a multi-player game when Bodhi sticks his head into my study looking inquisitively at me. I know immediately what is on his mind - A WALK!. He walks over to me, pokes me with nose and then looks at me,"Come on, give me a walk." He then turns and walk out again. About two minutes later this happens again. It then happens a third time but this time Bodhi makes a sound much like human speech ran through a dog filter. He then shakes his massive head. Clearly he's thinking, the human isn't that stupid. Then his head and tail pop up. He has got an idea. He trots from the den to the living room and I hear a scratching @ the door. Now Bodhi is about 125 lbs @ this point. He can quickly do a lot of damage to wood pretty quickly. I take the obvious hint, drop Warcraft and Bodhi stands patiently by the door watching me gather leash, pooper scooper and dog collars. I gather all three dogs - Devo the ferocious looking but lovable Char Pei/Chocolate Lab mix, Sasha - Chow Chow/Australian Shepherd mix and of course Bodhi, the fierce Tibetan Mastiff off we go. A brisk walk 45 minutes later we find ourselves back home worn out. Bodhi circles his favorite spot by the fireplace and gives me one last look. "Good Job," resting his head on his paws.

I just returned from my brother's wedding in Indiana. In my small home town, my brother's wedding was one of the social events of the year with something like 500 people in attendance. My brothers wedding was Catholic, which means a full Mass and a wedding ceremony. The brides dress was HUGE and had something like a 12 foot train. I kid you not 12 feet of dress trailing behind her.

It was an old time church wedding, full Mass and a pretty good reception afterwords.

CookingFor100.com Home

is the latest Xao effort - a recipe database for people who are cooking for 100 or more people. Kinda of neat and the first in an on going series of web products you will see from Xao and Singleton Price

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