Consultant finds CRM savings overseas

By Barney Beal, SearchCRM.com News Writer 24 Oct 2003 | SearchCRM.com

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Offshore outsourcing, the Holy Grail for companies looking to cut costs, is now capturing the imagination of one CRM consulting firm.

Akibia Inc., Westborough, Mass., has jumped on the offshore outsourcing bandwagon. The CRM industry has been somewhat resistant to going overseas because of the need for close communication between departments and cultural implications. Yet Akibia says it has developed a model that incorporates the best of both worlds: CRM strategy and implementation is kept in house while technical work is sent out to Chennai, India.

"CRM needs a very interactive approach," said Adam Honig, president of Akibia. "It needs a lot of business components and feedback throughout the development process. We developed methodology to take some components offshore, but maintain items like product management and change management on site for clients."

Akibia has realigned its methodology around what it terms the "Multishore" business model. It says the savings from using Indian labor has helped reduce customer costs.

"The success and failure of CRM with Multishore is communication between onsite and offsite," Honig said. "Unless it's extremely well defined, it will fail."

Akibia now has six clients using the Multishore model. Among them is StatementOne, a Lawrenceville, N.J., provider of consolidated statement information for financial institutions and advisors.

StatementOne selected Akibia several months ago and -- while attracted by the competitive cost savings -- was wary of potential communication issues with offshore outsourcing.

"Those weren't really a concern once we got the project up and running," said Alex Sauickie, vice president for StatementOne client services and support. "The communication between onshore and offshore is great. All our delivery expectations were met."

StatementOne had made a big investment in Siebel CRM, and, with only 60 employees, was particularly conscious of the need to control costs while still providing customers "world-class service," Sauickie said. The offshore model allowed the company to add some functionality that StatementOne had initially planned to launch further down the road, including a client portal that lets customers access the service request system through a secure Web site and an e-mail management feature for automated e-mail response and templating.

According to Honig, Akibia took a look at the falling rates for CRM consulting and, rather than adopt a defensive posture, elected to go the offshore outsourcing route. Early returns have been better than expected.

"We estimated that for every day of work we needed to do in New York it would take a day and a half in India," Honig said. "We didn't know how effectively we were going to be able to identify the requirements. After six projects, we learned the ratio is closer to 1 to 1.1."

Honig estimates the costs savings have been about 30% of project costs, allowing Akibia to lower its rates and thereby gain new customers.

Not to say there are still not concerns about the model. Honig said some potential clients have raised issues about security, particularly in countries like the U.K. where there are strict requirements on data storage. Additionally, clients have raised concerns over quality, which Akibia has countered with performance guarantees, Honig said.

For StatementOne, the security precautions were sufficient. Sauickie said they have yet to encounter a problem with cultural issues. In fact, this experience has opened StatementOne's eyes to the possibilities of offshore outsourcing.

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