SO YOU want to withdraw cash from your bank account? Do it yourself. Want to install a broadband internet connection? Do it yourself. Need a boarding card issued for your flight? Do it yourself…
Many people complain about companies outsourcing work to low-wage economies: but how many notice that firms are increasingly outsourcing work to their own customers?
Thanks to Michael Stastny for the pointer.
On the other hand, Glenn Reynolds quotes Virginia Postrel.
“As incomes go up, Americans spend a greater proportion on intangibles and relatively less on goods. One result is more new jobs in hotels, health clubs and hospitals, and fewer in factories.
“In 1959, Americans spent about 40 percent of their incomes on services, compared with 58 percent in 2000. That figure understates the trend, because in many cases goods and services come bundled together.”
The service sector is growing, because consumers are outsourcing some activities (such as meal preparation and cleanup). At the same time, businesses are outsourcing other tasks to their customers.
It is interesting to note that in heavily regulated industries, such as medicine, little outsourcing takes place. Thus, if one of our children has what appears to be strep throat, we cannot self-diagnose and self-prescribe. Meanwhile, I would not hold my breath waiting for a health insurance company to compete for business based on offering consumers a “good experience” dealing with their rules and forms.
In chapter 30 of Learning Economics, I write,
a good way to attain clarity in discussing the issue of outsourcing is to substitute the phrase “economic activity” for outsourcing
For Discussion. Why do computer-related businesses try to outsource technical support to their customers, and what alternatives should they consider?
READER COMMENTS
Brad Hutchings
Sep 20 2004 at 5:26pm
I sense that the club vs. silo hammer sees this as a nail. But this is all about costs that vary greatly from customer to customer. If there were a magic way to have the necessary support staff available to handle the support load at all times and simultaneously, to effectively charge per-incident support and on top of all that, not end up with a situation where support is underutilized to a point where it hurts sales… that would be the answer.
This question really hits close to home this week!!
shamus
Sep 20 2004 at 6:01pm
Computer-related companies view technical support as an avoidable expense. They should consider making products that are more reliable.
Bill Fellers
Sep 20 2004 at 6:23pm
Am I an evil job-destroyer for providing tech support for my friends and family for free? If software companies make more reliable programs, many jobs would be lost. Does that make them evil job-destroyers? Are all relatively self-sufficient people destroyers of jobs? Autodidacts must be very anti-social, since they learn without paying teachers and often perform functions that others would have to hire someone else to do.
Without the absurd ideas thought up by my fellow human beings, my life would be much less complicated, but also much more boring.
Mcwop
Sep 21 2004 at 6:53am
Because many charge extra for that service. Do it yourself, or buy the extra tech support.
Dave Schuler
Sep 21 2004 at 8:14am
We need to distinguish between outsourcing and off-shore outsourcing AKA off-shoring. Every company does some outsourcing—it’s a good thing, economically efficient. Not all that many companies have their own in-house legal department, for example. They outsource legal services.
Off-shoring technical support services is fine if it leads to equivalent or better technical support services at a lower cost. If not it’s very imprudent and that’s what happened at Dell, IIRC.
It’s even more imprudent when a company like a software company or pretty much any technology company that is dependent on intellectual property for its livelihood off-shores the creation of that intellectual property especially to countries where intellectual property laws are less-protective than ours, poorly enforced, or non-existent. The notion that a company is only off-shoring “junior engineer” positions is intellectually bankrupt. Where do they think “senior engineers” come from? Spring full-grown from the forehead of Zeus?
It is interesting to note that in heavily regulated industries, such as medicine, little outsourcing takes place.
You’re conflating outsourcing and off-shoring. Practically all medical services are outsourced. Who has an in-house doctor or nurse these days? Except hospitals or doctors I mean.
My own feeling is that we should very seriously consider relaxing the prohibitions against telemedicine. Retaining the prohibitions on telemedicine could perhaps be exchanged for strict self-imposed wage controls on physicians.
Jeff Evans
Sep 23 2004 at 9:08am
Why? Because the profit margin is so low one tech support call eliminates profit, and two calls causes a loss.
Comments are closed.