Ingram Micro to Outsource Some Jobs to Philippines, IndiaBy Pedro Pereira | Posted 2005-04-19 Email Print
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The company is outsourcing some functions that require contact with VARs, including service calls regarding product returns, basic tech support and assistance with placing e-commerce orders.Within the next nine months, a VAR calling Ingram Micro about a product return or a problem with an online transaction will be talking to a support professional halfway across the worldin the Philippines, to be exact.
That's where the company is outsourcing some functions that require contact with VARs, said Keith Bradley, president of Ingram Micro North America. Those functions include service calls regarding product returns, basic tech support and assistance with placing e-commerce orders.
Other functions the Santa Ana, Calif.-based distributor plans to outsource, including certain logistics jobs and vendor-related financial transactions, are going to Bangalore, India, Bradley said.
"The functions we're going to outsource in the next nine months are predominantly internal," Greg Spierkel, who is taking over as CEO of Ingram Micro on June 1 from his current post as co-president, told The Channel Insider. "Backroom finance functions do not make us the No. 1 partner for our customers. Our sales force does; our services do."
By and large, resellers have reacted positively to the news last week that Ingram Micro is consolidating some business functions within North America offices, laying off 550 people and outsourcing most of the jobs overseas. The moves do not affect management or field sales positions, and the job functions being outsourced have direct contact with only about 5 percent of Ingram Micro's VARs, executives said.
The plan will save the distributor $25 million, said Ingram Micro executives, and that is money the company can invest in growing its business and developing new market opportunities for VARs.
"No one I've dealt with at Ingram is going to be affected by it," said David Hudgins, president of Greensboro, N.C.-based PC Products and Service. VARs that do a high volume of business probably have nothing to fear, he said, though he wonders whether low-volume buyers will see some effects.
But Ingram Micro executives have remained adamant that they are taking great pains to avoid any disruption of service to VARs. That is why, Bradley said, the distributor already has put six months into developing an outsourcing strategy and plans to spend another nine months on the transition.
Ingram Micro will pick an outsourcing partner before the end of April, after which it will work closely with the partner on the transition. Bradley said the distributor will run parallel operations at its facilities and at the outsourcer before making the switch. "We're taking our time on this," he said.
Spierkel said Ingram Micro stands to learn a lot about doing business in Asia through the outsourcing partnership. The distributor expects to do $5 billion in revenue this year from Asian/Pacific Rim operations, with India being one of the biggest Asian markets where the distributor does business.
Ingram Micro is picking the Philippines for the jobs that require phone contact with customers because of what Bradley called an affinity between the people in that Asian country and the North American culture.
In addition, he said, after observing support calls in the Philippines and in India, he concluded that calls in the Philippines are handled in a more natural way. In India, the people answering phones sound too scripted, he said.
During a question-and-answer session with VentureTech resellers, Bradley said the support professionals handling Ingram Micro calls at the outsourcing companies will be dedicated to the Ingram Micro account, meaning they will do no work for other companies.
"We want them to see themselves as much a part of Ingram Micro as Ingram Micro-badged employees do," he said.
During the question-and-answer session, one VAR said service typically still suffers, regardless of how much a company says outsourcing will not affect service levels.
But Bradley said Ingram Micro will have daily communication with the outsourcing company and will do quarterly reviews to make sure service levels stay up.