Tom H. C. Anderson - Next Gen Market Research

14 responses so far ↓

• 1 Raj B // Sep 30, 2009 at 10:13 am

  “Think again. In an industry that offshores as seemingly indiscriminately as ours to lower cost labor countries, it’s hard to imagine this isn’t happening quite frequently.”….
  This is an assertion without any facts, Tom. Off-shoring has significant cost advantages because of cost-of-living differences.

  “Never mind children, if a market researcher in say Utah is picking up the phone at 3:00pm and expecting his/her offshore colleague in Bangalore to answer the phone/email, then this poor person is working at 2:30AM their time!”….
  When people choose to work is their choice. Are you saying that NASA should stop monitoring the space station in the night? Should NYPD stop doing the night beat?

  Your arguments are flawed and appear to be for your commercial interests.

• 2 E. David Zotter // Sep 30, 2009 at 10:55 am

  Wage arbitrage or not….

  In my opinion, offshored resources are almost always subpar in the world of Marketing Research. The only thing worse would be child labor in Utah.

• 3 Jane Mount // Sep 30, 2009 at 12:08 pm

  We don’t offshore. Other than a few trials, never have. I think the larger issue here is how difficult can be to run a marketing research firm profitably - with increasing price competition, faster required turnaround, an expectation of 24/7 access to project staff - it’s a challenge to deliver high quality research and retain a positive work environment. But it can be done. Leverage technology to enhance productivity. Utilize creative staff benefits (such as comp days, telecommuting, or general morale boosters) to keep staff engaged and prevent burnout. And I’ll add this in for jollies - add more quality checks to the process. While it sounds counterintuitive, the addition of quality checks leads to more contented clients, individual staff members who feel less pressure, and less rework - costing you less money, and bringing in more revenue.

• 4 Vickie // Sep 30, 2009 at 1:04 pm

  I worked with a data processing firm in India and had GREAT results. Part of what worked so well for me is that that I could finish my work day by sending off my DP requests to my assigned colleague in India, and the data would be ready - and perfect! - when I came back in the morning.

  A lot of my coworkers complained about the offshore firm. Their comments were disrespectful and, frankly, racist. I think many people here don’t realize how competitive education and the job market are in India. Those folks working at the firm where we sub-contracted data processing probably could have blown any of us out of the water academically. They all had university degrees, and that’s no small achievement in India.

  However, my US coworkers didn’t have their own acts together on getting their DP requests done. They needed to work with someone who was working the same daypart hours as themselves, because they made so damn many errors in their tab specs. They needed someone they could constantly run to in order to have them run and rerun and rerun again corrected tables. Garbage in, garbage out.

  I wouldn’t hesitate to do this type of arrangement again. However, child labor issues are huge - and I’d be very, very careful there. As for Western WATS, I never have used them - and now I never will.

• 5 Peter Cole // Sep 30, 2009 at 3:38 pm

  As a competitor to Wats… Still, it’s a black eye for the industry, and for the telephone industry in particular unfortunately. With so many telephone projects being pulled back I really hate to see this negative industry PR.

  Jane’s comments are right on target. Hourly rates and margins continue to dwindle right now due to extreme pressures from both clients and smaller research companies trying to stay afloat through the downturn. Offshoring certainly does not help and end clients are extremely driven by the bottom line over quality. On the bright side we’ve seen some very positive trends accross all types of qual and quant research in the last few months.

  I offshore some of my projects in-country (with full disclosure, client buy-in, and client monitoring upfront I might add). However, I also keep a percentage of that same in-language offshore work here in the US and am able to run QA and validations that way with in-language interviewers. You have to be on top of it otherwise you’re setting yourself up for a very bad client phone call or a story like the one being discussed here. Offshoring for some DP and Programming work has been a good move in many ways and does allow 24/7 coverage and faster turnaround . Success depends greatly on how and where you do it obviously.

• 6 Pernez // Oct 1, 2009 at 10:02 am

  again a nice view about our industry

  we have sweat company here in europe too (people are work-addicted) but at the end it is their choice

  not sure at all and I disagree with Raj B, in emerging countries they do not choose their job cause they want to!

• 7 Frank Ready // Oct 1, 2009 at 10:47 am

  I agree with Peter.
  There is a lessening of quality as we continue to find these “cheaper” ways to work, such as outsourcing. Having greater control, and seeing your vendors face-t0-face, helps increase that quality. This is turn helps keep clients.
  I have learned that Marketing Researchers are rather unforgiving. Clients will quickly drop you if they see any kind of mistakes. Can I then trust someone working at 2:30 in the morning to perform as well as someone on an 8-5? Hopefully, someone can answer that trust issue, particularly from a more HR side in describing the work patterns of such graveyard shifts.

• 8 Ted Kendall // Oct 2, 2009 at 6:25 pm

  I saw earlier about the charges against Western WATS and have actually spoken to some people who are closer to it than any of us (and not at WW). You are making some quick jumps in logic here. You are making them out to be a sweatshop with teens and pre-teens hunched over phones when the reality was, while they did break the law, it was more like breaking NCAA rules on some technicalities.

  But also, I really have to call you on the racism and bigotry. Both in terms of off-shoring or not (come on, admit it, it is not just about the quality) but also–Utah. Last I checked, it was just one of 50 states. The fact that you decided to disparage the population based on an HBO fictional story (and not a very well done one at that) but also on the whole religious population there–well, that’s no different than disparaging any other religion or race. Shame on you for taking the easy way out on the humor. Bad form and a black eye on the research industry as a whole from you.

• 9 Dan Gersten // Oct 4, 2009 at 9:32 am

  I’m with Ted. Tom appears to being a bit dramatic and the quick jumps in logic don’t appear to be based on the whole story. I’ll leave the commentary about racism and bigotry alone and chalk it up to something else(?).

  As far as “sweat shops”, there were research suppliers in NYC back in the ’60’s and ’70’s that had reputations as sweat shops and though not employing children per se, had coding departments loaded with HS students, working really long hours for not much money. And PD’s and Field folk burning candles to get a survey out into the field or a report to a client.

  As far as a black eye on the research industry, think for the most part no one really cares except maybe a few folk within the industry. As if what Western Wats was doing was akin to AIG or other financial services firms and people who ripped consumers off for millions and millions of bucks. Yes, very dramatic, indeed!

• 10 Ray Poynter // Oct 14, 2009 at 3:33 am

  The key issue is whether one outsources or keeps it in-house. If a company decides to outsource DP, calling, sample source, servers then the decision has to be made as to who to outsource it to.
  A deision to rule out suppliers not in your specific country (be that Japan, USA, UK or whatever) is likely to be bad economics and bad socially. Cases have to be judged on their merit. outsourcing to Burma is likely to support an evil regime, outsourcing to US, India, or Australia is likely to fine ethically.
  The phrase offshoring is, IMHO, best left to bigots and those who think you can divide the world into us and them, let’s just talk about outsourcing, and then deal with issues such as quality, workers rights, and service standards.

• 11 Tom H C Anderson // Oct 15, 2009 at 1:15 pm

  On a Risk/legal basis there are huge differences between local outsourcing and offshoring.

  I’m quite tired of having people bully me for speaking on this topic. It is becoming an important part of market research and it should not be taboo.

  IMHO I think it’s either a lack of information on the subject or outright dishonest and fraudulent to try to group offshoring into outsourcing.

• 12 Ray Poynter // Oct 19, 2009 at 5:41 am

  I am mildly curious as to whether you feel I am fraudulent or dishonest, but not overly curious.
  It might help to check we are talking about the same thing. My understanding is broadly as follows.
  1) Outsourcing, using another company to provide production or services. Outsourcing can refer to domestic or international, and in the case of a large provider the distinction could be blurred, for example if you outsource payroll to one of the major suppliers, your contract and contact might be domestic, but the work and profit might be largely achieved abroad.
  2) Offshoring, very strictly this means opening a new venture (or joint venture) in another country to provide production or services for companies’ domestic markets. However, the term is also often used interchangeably with offshore outsourcing, and I am assuming that the current debate you wish to have about offshoring is mostly about offshore outsourcing.
  3) Offshore outsourcing, using a company from another country to provide production or services as an input to your business, for sales in your domestic market.
  It is perhaps worth making the point that the term off-shoring is not as commonly used outside of North America as it is within.
  Some companies choose not to outsource. Although even this is a matter of definition, they will typically have no choice about outsourcing things like electricity and water, and may well outsource cleaning, catering, and some accountancy/audit without even thinking they are outsourcing.
  In market research the big areas of conscious outsourcing include: face-to-face interviewing, CATI, sample provision, scripting, survey hosting, software development, translation, data processing, marketing sciences, and analysis of qualitative data.
  There are, in my opinion, several reasons why companies outsource:
  1) To save money, if somebody else can provide the same quality cheaper, you can deliver better value to you client.
  2) To provide scalability. One method of handling different flows of business is to be able to put some of the work out when you are very busy.
  3) To protect core staff. This is the flip-side of point 2), when there is an economic downturn you may be able to cut back on your outsourced suppliers, treating them as flexible costs, and your own staff as fixed costs.
  4) To access skills that do not exist in your organisation, for example marketing sciences, data mining etc.
  5) To concentrate on your core competences. One company I was involved in ran a panel and was making a reasonable return on it. However, they were a small company and they realised they were spending too much of their key managers’ time looking after the panel, rather than focusing on research, so the panel was given to another company (who happened to be based in the Netherlands) in return for a keen price of usage, and the company was free then to work on its core competences.
  When outsourcing (or offshore outsourcing) there are plenty of issues to consider, in terms of quality, cost, risk, and ethics. Note in some countries ethics is becoming a legal requirement as well as a moral requirement.
  There are some people who seem to be saying that companies should never offshore. This seems ethically wrong to me, unless those people also agree to ensure that their products are never sold over-seas, and even then I feel that it is a view that could prolong the current injustices in the world.
  There are some people who seem willing to ignore ethics, and simply go to the cheapest place in the world, even if that means employing child or slave labour, or risking environmental damage, this strikes me as equally ethically wrong.
  Note, both of my positions here are purely moral. If somebody could prove to me that outsourcing to a sweatshop in Burma made good profits, I still would not want to do it. If somebody could prove to me that my country could ban offshoring and maintain it wealth at the cost of other countries, I still would not want to do it. I do believe that fair trade can make poor countries richer.
  I simply do not believe there is a qualitative difference between outsourcing and offshoring in practical terms. Outsourcing is a continuum, from low risk to high risk. Outsourcing to a domestic company can be very risky, outsourcing to an international supplier (e.g. IBM) can be relatively safe.
  There are certainly issues that outsourcing to another country brings into play, that are less of a factor domestically. For example where is the contract legally enforceable and are their legal restraints on what can be done (e.g. it is very hard to transfer personal data out of the European Union to the US for legal reasons). But this is only one of many issues to consider when deciding to outsource.
  I think there is a major debate to be had about transparency in outsourcing. Clients should know what is being done in-house and what is being outsourced, and the implications of that outsourcing.
  I think there is a useful debate to be had about the implications of outsourcing internationally, in terms of risk, economics, ethics, and the legalities. This debate needs to take into account where the people involved in the debate are. For example, in the UK it would be illegal for me to say that I am prepared to outsource to UK companies, but that I would not be prepared to outsource to any of the other European Union countries. In another country it might be perfectly legal to say that all outsourcing for your company was going to be domestic.
  But I come back to the term offshoring. I worry that too many bigots, nationalists, protectionists, and popularists have picked up on the term. I am certainly not accusing anybody in this debate, in this group of being a bigot. I am suggesting that an alternative term is used. I am certainly not suggesting that the subject of outsourcing in general, or specifically of outsourcing internationally should not be debated. I am suggesting that the term offshoring is harmful to a good debate, because it has become bumper sticker phrase for one point of view.
  Quick declaration of interest.
  I frequently supply consulting and services to companies in other countries, such as project consultancy, marketing science design and analysis, and training, so I am an offshore supplier to companies in Australia, New Zealand, US, Switzerland, Netherlands, and Romania. I have also recently run training courses in Russia, China, Malaya, Spain, and Sweden. In the past I have placed outsourcing contracts with suppliers in US, Netherlands, India, Romania, and Australia, and through SaaS type operations I currently outsource several aspects of my services to US, Germany, and the Isle of Man.

  ps I certainly did not intend to bully anybody, and apologies if it came across that way

• 13 Tom H. C. Anderson // Oct 24, 2009 at 4:42 pm

  Perhaps an alternative less transparent term?

  The reason we need transparency is that offshoring has been a secret in the MR industry for several years now. The difference w/offshoring and outsorcing are vast, but perhaps most importantly legal.

  This is self certification, so how you interpret is up to you. If you are ‘offshoring’ to other EU countries you can list them in the certification area. Clients can then decide if this represents an issue with any specific portion of a project or not.

• 14 Beau Martin // Nov 7, 2009 at 2:44 am

  Ray - I just want to commend you on your post. Fantastically well thought out and well informed, thanks!

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