On the racks are garments mass-produced to keep costs down yet they can be altered to a certain extent: to meet your loved ones' requirements.

If you have relatives living in other countries they may have different preferences: in style, material and weight than your local family. When the clothes arrive overseas they may have to be taken in or let out.

And, like most garments today, outsourced customer contacts are increasingly made in developing low-cost nations with plenty of inexpensive labor.

For those reasons you have to take extra due diligence when checking out your foreign customer-serving outsourcers, to make sure there are no unbroken threads.

There are still issues with having foreign customer-serving as well as US-serving outsourcing handled in low-cost countries. They include lack of empathy and cultural affinity, contract enforcement, disaster protection and public and political opposition to jobs being exported.

But many of these issues have been and will be resolved. Just as similar issues with offshoring garment-making were successfully handled a couple of decades ago.

"Overseas outsourcing in other industries, including manufacturing, is now accepted as commonplace and actual examples of bad practice, though shocking, are relatively few," says Mike Havard, managing director of consultancy, CM Insight (Weybridge, England).

EUROPEAN OUTSOURCING GROWS

The demand for outsourcing is growing in Europe. Datamonitor predicts there will be 286,000 outsourced workstations in Europe, the Middle East and Africa (EMEA) by 2007, or 16.1% of total call center workstations, from 149,000 or 11.6% in 2002.

Tellingly, most of the outsourced positions come from companies shifting contact handling to outsourcers from in-house call centers with some new positions.

European outsourcers are going back-to-basics, reports Datamonitor UK-based managing analyst Robin Goad.

Some 18 months ago outsourcers were talking about branching into billing and fulfillment, accounting, HR and applications hosting to build margins.

But many of them found that they could not break into these markets or handle these functions well. Other competitors, like systems integrators, could achieve greater economies of scale.

"Outsourcers realized that their expertise, and why clients were coming to them, was in managing customer relationships through all channels and in reducing customer churn at lower costs to clients," says Goad.

European-serving outsourcers have been differentiating themselves based on market vertical expertise.

As examples Goad cites Convergys (Cincinnati, OH), SITEL (Omaha, NE), Stream (Canton, MA), and Sykes (Tampa, FL) in technical support; ClientLogic (Nashville, TN) in travel; EDS (Plano, TX) in the public sector; SITEL also in utilities; and Teleperformance (Paris, France) in entertainment.

To illustrate, EDS won a contract with Britain's Post Office to support consumer banking via a new call center in Preston, northern England. The UK government plans to pay all social benefits directly into bank accounts by 2005.

SITEL is now Microsoft's preferred support and sales provider to its UK, Irish, French and German customers; SITEL will serve them from its centers in Dublin, Ireland; Paris, France; and Krefeld, Germany.

Europe's outsourcing industry is experiencing the same tumults as outsourcers elsewhere, leading to mergers and acquisitions.

For example, Vertex (Manchester, UK), owned by United Utilities, acquired another UK-based outsourcer, 7C, in December 2002.

The deal included majority ownership in a 500-workstation New Delhi, India center; GE Capital has invested in that Indian center.

The lack of profitability is a driver to the next round of mergers and acquisitions, says Philip Cohen, a teleservices consultant based in Skelleftea, Sweden.

Other outsourcers are looking for new clients and call centers, especially in low-cost countries, without going through the great expense of marketing and opening new centers. Existing outsourcers want to cash out.

"What will drive the mergers and acquisitions is the need of existing outsourcers to capture new markets while many other outsourcers are finding the business so unprofitable they want out," says Cohen.

Brian Bingham, program manager for CRM and Customer Care Services at IDC (www.idc.com), sees more mergers and acquisitions taking place as larger outsourcers acquire niche players, such as in smaller markets like India or in specialized sectors like business-to-business.

The mergers are win-win for the bureaus and for clients.

"The merged bureaus provide one-stop shopping for clients, which makes outsourcing less complex by reducing the number of different vendors to assess, contract and maintain relations with," explains Bingham. "Outsourcers can leverage a suite of services, keeping prices reasonable."

Outsourcing is a popular and recommended strategy to serve the revitalizing Eastern European markets. The Czech Republic, Slovakia, Hungary, Slovenia, Lithuania, Latvia and Estonia are expected to join the European Union by 2004.

Transcom WorldWide (Luxembourg) opened its first Polish call center in Olsztyn, in July 2003.

"The CRM industry in Poland is relatively immature," says Transcom's CEO Keith Russell. "In a country of 39 million people, [the new center] offers us an excellent opportunity to enter this market at an early stage in its development."

Outsourcing may be the way to go to serve customers in Russia, Eastern Europe's largest country.

"You are better off going with a local outsourcer [in Russia] either by buying a firm or partnering with them than going in alone, because of the bureaucracy and corruption and the need to know the local markets," Bingham points out.

EXPORTING EUROPEAN OUTSOURCED CONTACTS

To keep prices reasonable and to attract business from in-house centers, European-serving outsourcers have been opening centers and migrating business to lower-cost locations in mostly developing countries, just like their American-serving counterparts.

Outsourcers and their clients can realize savings from 8% to 40%. Meanwhile they access better quality college-educated agents.

IDC's Bingham sees offshoring from UK to India and the Philippines for tech support and increasingly for customer sales.

But he also sees UK calls starting to go to Australia and New Zealand, for higher-value calls requiring agents with strong cultural affinity to Britons, but for slightly lower costs than in the UK. Akin to US calls outsourced and handled in Canada.

A new Australian outsourcer, Contact 1-2-1 (Adelaide, Australia), has been set up to win business from and to support UK and US clients.

Jean-Marc Hauducoeur, senior vice president, international operations with Convergys, says there is little reason to keep your UK calls in the UK.

"There isn't any English-language work, except politically sensitive government contracts, that cannot be handled offshore," he points out.

But India cannot necessarily support other European languages. Convergys supports French, German, Spanish, Italian, Danish, Norwegian, Swedish, Finnish, Dutch, Turkish, Portuguese, Swiss French and Swiss German from the UK.

The outsourcer also uses native speakers to ensure that the quality of spoken and written communications is of a high standard. Native speakers understand the cultural context of the contact with customers within their own country.

But India's lack of other language support has not dissuaded clients from having European calls handled in that country by outsourcers.

An unnamed high-tech firm recently began outsourcing customers' support contacts from the UK and surprisingly, France, Germany, Finland and the Middle East to Talisma's (Kirkland, WA) Bangalore, India center.

The client has been outsourcing with Talisma for American and Canadian customer support.

All of those customers currently must speak English to the reps; Talisma is looking to partner potentially with an outsourcer to handle non-English-language support.

Surprisingly, the client has a 100-workstation software development center in India. But Talisma executives say the client told the outsourcer that managing call centers weren't part of their core competency.

"The new contract is beneficial for us because our reps now have the choice of morning and afternoon shifts: EMEA is only two to five hours away," explains Rajendra Mruthyunjayappa, director of Outsource Services. "Normally they would work at night when it is daytime in North America. Now we will get to work round-the-clock keeping us busy and gaining the most out of our assets."

Other countries' bureaus and customers are getting into offshoring. Teleperformance has a Tunisian center serving France.

Emerging on the offshoring horizon for European-serving firms is Eastern Europe. Datamonitor predicts there will be 25,000 outsourced workstations there by 2002-2008 (mostly focused on the Western European market), compared with 10,000 now.

Outsourcers there can serve German speakers, plus Russian and Swedish customers, at roughly half the cost of having the contacts handled in Germany, plus they can tap the increasingly prosperous domestic markets.

Latin America is a potential outsourced location for serving Spanish and Portuguese customers. Teleperformance has a center in Argentina; and Atento (Madrid, Spain) has centers in Argentina, Brazil, Chile, Colombia, El Salvador, Guatemala, Mexico, Peru, Venezuela and the US (Puerto Rico).

While there are significant cost savings in such outsourcing, David Spindel, Datamonitor's US-based managing analyst, has not seen much of it happen, yet.

"Such outsourcing is new, it takes time for the benefits to sink into the marketplace," he says. "Companies want to see success stories and assess them before committing to outsourcing in Brazil or in other Latin American countries."

You can have your European and American customers' contacts handled from the same offshore call center.

Teleperformance markets its Argentina center to the US and Spain and its Indian center to the US and the UK. Convergys handles UK and US calls and possibly future Australian end-customer contacts from its Indian call centers.

That allows in many cases the outsourcer to split the contact handling between both markets from the same workstations. When it is 2 pm in the UK it is 7 pm in India. But when it is 2 pm in California it is 5 am in India.

"Clients indirectly save money on seats, terminals and cabling - the costs for which are passed on," says Hauducoeur.

EUROPEAN OFFSHORE OUTSOURCING CAVEATS

But just as with offshoring outsourced contacts from the US, there are similar, if not greater, caveats in offshoring them from Europe.