First Coffee for September 23, 2005

David Sims : First Coffee
David Sims
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First Coffee for September 23, 2005

By David Sims
david@firstcoffee.biz

This morning First CoffeeSM casts a few two-cent pearls on a good idea kicking around the contact center world these days. The Patsy Cline CD’s finally off the stereo here at the First CoffeeSM world headquarters campus, and ‘40s big band swing is on instead.

Do they still call it a “stereo?” First CoffeeSM’s father still calls it a “hi-fi,” no doubt First CoffeeSM’s slipping into the Outmoded Expressions phase of life as well.

(“‘40s big band swing? Surprised the guy doesn’t call it a ‘Victrola…’”)

As First CoffeeSM’s read all the Dick Francis, John Grisham and Carl Hiaasen novels to be had at the lending library of the St. Paul Cultural Center here in sunny Antalya, this morning he was perusing the “Economic Review, 3rd Quarter 2004” by the Federal Reserve Bank of Kansas City – hey, it was either that or Maeve Binchy, What Would You Do?

Anyway, there was an article titled “Can Rural America Support A Knowledge Economy?” by Jason Henderson, an economist at the slightly condescendingly-named Center for the Study of Rural America at the Federal Reserve Bank of Kansas City, and Bridget Abraham, a former research associate there.

There’s always the slight flash of exasperated anger whenever First CoffeeSM sees something implicitly assuming that people are different in rural America than in the rest of it, but of course, unfortunately, in fact it’s true: rural Americans are nicer, more honest, brave, thrifty, trustworthy, loyal, reverent, clean, obedient, knowledgeable about NASCAR and more willing to stop and help somebody who needs it. Oh, sorry, different study.

Henderson and Abraham find that given certain conditions, namely those which make parts of rural America more like parachuted enclaves of downtown San Francisco or Manhattan, yes, it’s actually possible to build businesses and offer jobs in rural America which do not involve slopping hogs.

As a matter of fact, after some pith-helmeted exploration they find that there are, believe it or not, “highly skilled labor” and “colleges and universities” out there in flyover land. They also discover “vibrant business networks” and actual “infrastructure.”

We’ll skip over their definitions of “knowledge-based” businesses, suffice it to say their listing, pace Beck’s 1992 book Odelay – no, actually Shifting Gears: Thriving In The New Economy, of “High-Knowledge Industries” is pretty much what you’d expect, plus they toss in “funeral service and crematory,” “guided missiles,” “child daycare services” and “advertising.” After a few pages, charts and graphs – these are economists, remember, the kind of people who’d marry Juliette Binoche for her money – they establish that generally these sorts of jobs are More Desirable and Pay Better than hog-slopping. It also worked over the obvious fact that there are more of these sorts of jobs, in fields like guided missiles and advertising, in metro America than rural America.

But what struck First CoffeeSM, and the reason the Federal Reserve study wasn’t ditched after a few pages in favor of learned analysis for just how the Chicago White Sox are disintegrating before our very eyes as they blow a 15-game lead after the All-Star break, were the factors the study laid out as conducive to knowledge industries in rural America, and how much they resemble those which give rise to contact centers in India.

Which brought to mind a project called Rural Sourcing, begun by Kathy White, who as CIO of Dublin, Ohio-based Cardinal Health was tired of hiring people who’d stay a while, not do good jobs, and quit. So she arranged with her alma mater, Arkansas State University, for an outsourcing summer internship program.

White knew she was getting kids who’d do a good job and keep their word about when they’d be at work, and they benefited from the experience of the sort of job one typically doesn’t find in rural Arkansas. It worked so well she founded Rural Sourcing as an information technology outsourcing company last summer. It now has five locations across Arkansas and North Carolina, 35 employees and some solid clients, such as Cardinal Health and Mattel.

She firmly believes in this – she’s put $2 million of her own money in it. Because with her it’s greater than just business. As an article in Southern Growth Policies Board’s journal says, “RSI seeks to redirect some out-sourcing back into America by locating high quality IT centers in rural communities that are served by a strong university… The initiative allows new college graduates interested in IT employment to remain in the South. RSI’s work has also caused experienced technology workers to return to their rural hometowns.”

She plans to open 50 centers over the next five years.

First CoffeeSM’s all in favor of companies finding the cheapest quality labor they can, since it all results in greatest efficiency all around and lower prices for Joe Consumer, but agrees with White that while outsourcing to India and other foreign locales has its place, American companies selling products to American consumers should at least consider hiring Americans to work IT and contact centers.

Cost is, of course, India’s great advantage. White’s own numbers show that Indian outsourcing costs from $18 to $30 an hour, and even White can’t touch that, she has to put her rates between $38 and $48 per hour.

But her argument – and it’s a compelling one – is for that extra ten or twelve bucks an hour a company doesn’t have to worry about the “total cost of working with different languages, cultures and time zones,” as she tells Jessica Marquez.

Tim Boehm is president of a company called CiberSites, which is doing what White’s doing, offering low-cost IT work in bigger cities like Oklahoma City and Tampa. He tells Marquez what he finds is companies are leery of offshoring portions of their businesses because of data security or intellectual property concerns, citing a couple clients of his who “joined CiberSites after sending some work offshore and finding that the cost savings were not worth the hassle.”

The Federal Reserve Board study didn’t list contact centers as “high-knowledge” businesses, which First CoffeeSM thinks rather misses the point: Do not some high-knowledge new college grads work in them? They do, as they work in Starbucks and Barnes & Noble as they try to figure out what they want to be when they grow up.

So why not, First CoffeeSM asks, locate call centers and homeshored IT in university towns in Virginia, North Carolina, Kentucky, Tennessee and West Virginia which are, in fact, relatively easy places to move into from other parts of the country, are inexpensive places live, fun places to live, and are close enough to metro America to catch concerts and museums for day trips. They already have the built-in culture college grads like anyway.

Now it’s one thing to put a new college grad in Los Angeles or Chicago, highly desirable locations but expensive as all. But it’s quite another to put contact centers in the middle of Nevada or Oklahoma and hope to attract bright, hard-working young people. Better to serve in Seattle than rule in Scalped Rock, Wyoming.

It’s possible to find fun, inexpensive and scenic places to live, places attractive to new college grads – and with a built-in supply of spouses of new college grads looking to earn extra income. Greg Gianforte reports great success getting brght people to come work in the 365-day a year playground known as Bozeman, Montanta. Great college town.

Forget places like Charlottesville or Chapel Hill, they might as well be Honolulu for all the economic advantage they give you, but why not Lexington, Virginia? Morgantown, West Virginia? Johnson City, Tennessee? Locate homeshored contact or IT outsourcing centers a little farther out, get a lot of college grads looking for things to do after work and the Starbucks – or, even better, a funky locally-owned coffee shop – will follow, as will some rat hole venue for local bands, which, don’t forget, is how Greenwich Village got started back in the 16th century, as a place for Indians disgusted with the high prices of Manhattan Island – twenty-four dollars! Highway robbery! – went to live more cheaply.

White’s onto something. There are plenty of smart, capable people in America’s rural areas who can do the sort of IT and contact center work being outsourced to India and who, as a matter of fact, rather like the sleepy, safe small-town lifestyle. Give them a nice place to work and you’ll have a loyal employee for a long time.

Anyway. Just an idea.

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