"Due to unusual call volume, your wait time may be longer than normal..."

So goes the usual mantra and the usual subsequent elevator music interspersed with, "Thank you for your call.  All of our representatives are busy.  Please continue to hold."  It sounds so lifelike that at first the the caller is faked into thinking someone has picked up.  But no, it is still only a recording.  Rise of the machines, indeed.

Finally, after about 45 minutes of waiting, a representative picks up.  The representative has worked long and hard and perhaps has just come from a series of difficult calls.  Perhaps it is in the middle of the night for the representative.  They already are annoyed, indignant, and righteous.  Their job mandate is to protect the firm and to admit no wrongdoing.  They answer in heavily accented English.  

The caller walks through the situation.  They had set up a single car rental booking.  The website encountered technical difficulties and could not confirm the single booking.  Yet the company sent two emails showing two duplicate car rental bookings.  The caller called the booking company management afterwards and worked out to cancel the entire car rental booking and all duplicates so as to proceed without the car rental.  Management noted the still-present website technical difficulties.  Yet there is still a bill for a car rental booking. 

The representative notes all this down and righteously summarizes this as the caller booking a car rental and failing to cancel it.  "Is there a cancellation confirmation number?"

After another 15 minutes of explanation, the representative promises to check with the third-party car rental to confirm there was no charge on a non-existent car rental booking.  Then the representative hangs up.

Bemused, the caller tries again.

"Due to unusual call volume, your wait time may be longer than normal..."

Finally, after about 45 minutes of waiting, a different representative picks up.  The representative has probably also worked long and hard and perhaps has just come from a series of difficult calls.  Perhaps it is in the middle of the night for the representative.  Nevertheless, this one is courteous and patient, yet still righteous.  Their job mandate is to protect the firm and to admit no wrongdoing.  They answer in heavily accented English.  

The caller walks through the situation again. 

The representative notes all this down and righteously summarizes this as the caller booking a car rental and failing to pick up the car.  "Is there a cancellation confirmation number?"

After another 15 minutes of explanation, the representative promises to check with the third-party car rental to confirm there was no charge on a non-existent car rental booking. It is confirmed.  The booking company is sitting on a pass-thru charge that never passed-thru.  All the facts are in, and the caller is correct.  Besides which, all of this should have already been noted in the original representative call logs.  The representative kindly transfers the caller to the company credit department.

The credit department representative literally says, "Huh?  Who are you?  What is this about?"  followed by, "I do not know why you were transferred here.  I do not know."  And hangs up. 

This is an actual occurrence with an established travel booking agency.  Outsourced?  Clearly.  Outsourcing provides a scalable, modular (read, cheaper) solution  to handling volumes of quantity.  Little is said about quality save that (a) it should be commoditize-able and equivalent and (b) it is not a core competency anyway.  Yet the above example showed it is neither scaling up for quantity nor sufficient in quality.  This is the frontline customer relations contact point and it is lacking in both effect and scale.  

What should the corporate head of customer relations do?  Pay more?  Pay less?  Insource for quality, but suffer worse in scale?  Outsource for quantity, but suffer worse in quality?  Get out of the business?  These answers are guesses.     

The core question is one we may be unwilling to address.  Why is outsourcing a cheaper option?  What accounts for the cost differential between domestic and overseas labor?  The economist answer is there are differential costs of living.  However, this still begs the question as to why there are differential costs of living.  To provide a reasoned answer, we need a little more background equipment.  This paper dives into early developmental cognition.  

The brain consists of 4 major lobes or centers.  The occipital in the back does vision.  The top parietal does sensori-motor.  The bottom temporal does hearing.  The frontal part does executive decision and behavior.  According to Chugani & Phelps (1986), these different regions develop at different times.  The prefrontal has the most dependencies and is last to begin maturing at 8 months.  This region is responsible for giving people the personalities that they exhibit.  Huttenlocher (1994) showed that in general, brain regions show a heavy dose of synaptic overproduction with twice as many connections as adults have by age 2.  By age 7, the number of synaptic connections falls to adult levels and remains.  Bourgeois (2001) and Greenough & Black (1992) showed that this process of synaptic exuberance and trimming is both genetic and experiential.  This early imprinting and plasticity (Stiles, et al., 2002; Elbert, Heim, and Rock Stroh, 2001) helps adjust the early learner to the extant environment.

Bronfenbrenner's (1998) work depicts a person's cognitive development over time and within surrounding influences. 

At the core is the Microsystem, or the individualistic preferences in behavior based on personal idiosyncracies arising from the frontal lobe.  This interacts with and is shaped by the surrounding sheath of the Mesosystem, the best examples of which include family and schooling.  Further out is the Exosystem that provides the longer range connection with neighbors, fellow citizens, and local regions.  And overlying this all is the Macrosystem that provides the cultural context.  All of these layers interact and form the person's cognitive behavior over time from birth to childhood to college and beyond to adult life. 

Let us say development time for a person is 20 years.  It takes 20 years of development to train a newborn infant to a fully capable adult worker who is available as an outsourced call center representative.  The college training on which we tend to focus by the way, only comprises 4 out of these 20 years.  And it involves only 1 layer (Mesosystem) of the 4 layers.  One-fifth of one-fourth is one-twentieth, or 5%.  And this 5% is at the tail end of the development whereas the most influential periods appear to be at the front end.

Why is the cost of living so much higher in some places than in others?  Perhaps in a more expensive cost of living region, the 4 layers over 20 years trains the person to refuse contaminated food, poor construction, unsanitary conditions, or unhealthy conditions for example.  The culture finds, say, lead lined food containers to be appallingly unhealthy and shameful.  This causes the news media to highlight any such stories since it is so anathema to the culture and therefore makes interesting viewing.  This in turn causes schooling to highlight the health effects of lead poisoning from food and water supplies.  And finally, this causes the individual person to automatically, continually be on guard against lead near food supplies.  Furthermore, the four layers train the person that in a class-less society, what is unacceptable to the self is also unacceptable to others and that no matter a person's background, everyone has the right to health, freedom, and self-respect.  The end result is that manufacturing must avoid lead at all costs, which increases the expense of storing food.  But the higher cost of living region has safer, healthier food supplies and a societal behavior that normally looks after and supports even strangers in maintaining food safety. 

Outsourcing to a region with a lower cost of living implies a different set of Micro-, Meso-, Exo-, and Macrosystems where, say, lead lined food containers are acceptable - at least to others in society besides the self.  There may be corruption, poor manufacturing and business practices, and a marked lack of interest in the well-being of others.  Using this region for outsourcing may require additional training, scripting, and monitoring for each employee - expenses that may well exceed the cost differential between domestic and overseas labor.  These costs would be born currently by the outsourcing entity, rather than previously by the parents. The scripting required to maintain quality control restricts what the representative can and cannot do - forcing them to righteously protect the firm and to admit no wrongdoing.  They may not be able to show concern, coming from a different set of Macrosystem cultures where there is a right by class and bureaurocracy.  They may be unable to communicate clearly due to differences in systems.  This may lead to the annoyance and indignation of feeling dis-empowered.  They are less able to help if they wanted to.

Outsourcing is an interesting concept.  If the labor in an overseas region can perform the same work at reduced cost, then there is an efficiency advantage.  This implies however, that the additional training differential provided by the parents and society across all four layers in a higher cost of living region must be wasteful and inefficient.  Then the research must be wrong, the 20-year long lead development time over multiple environmental layers must have no effect, and we should ban that parenting, schooling, and culture as wasteful to GDP. 

If this is not the case, then the 20-year development does have an effect and the outsourced work is actually not the same.  If the outsourced work to a lower cost of living region causes a lost customer - as it did in the above real scenarios - then the short term reduction in cost by outsourcing only led to a long term loss in revenue.  There is no efficiency advantage.  There is only a substitution with cheaper materials.  Outsourcing here is not a viable solution. 

Then it falls on industry and academia to find another solution to enhancing the scalability of labor within a higher cost of living region.  Instead of investing in low hanging fruit technology that allows distant communications enabling outsourcing, the investment should be on augmenting and promoting growth and training for more effective in-sourcing.  Perhaps understanding and augmenting the skills transfer within the Micro-to-Macrosystem layers can create more customizable and scalable sources of call representatives without the need to go fruitlessly shopping overseas.