Archive for category Uncategorized
Tax on Offshore Call Centers-A Bad Idea
Posted by gmtomko in Rants, Uncategorized on June 7th, 2010
Apparently, there is no shortage of ways to generate revenue for cash-strapped government programs. Now we hear of New York Senator Charles Schumer’s idea for a 25 cent tax on calls to offshore call centers.
Sen. Chuck Schumer (D-N.Y.) introduced legislation that calls for taxing companies that transfer domestic customer service calls to foreign call centers. In a prepared statement, Schumer said the $0.25 excise tax is designed to provide incentive for companies to keep call center jobs on American soil.
Of course, this “incentive” is highly unlikely to have its desired effects for the following reasons (and probably many more):
- This will cost everybody 25 cents more for each customer service, help desk or other such call. Either the government will get the 25 cents, or a US-based service provider will be able to charge its US business customer higher rates (up to 25 cents per call) than the offshore provider.
- The cost of doing business will increase as companies will have quarterly disclosure filing requirements, related audits and other bureaucracy-related fees.
- The cost and size of government will increase to administer the program.
- The switching costs to move already-implemented business process solutions from offshore centers to onshore centers would likely exceed the “benefits” of bringing the solution back to the States.
Other than this government’s insatiable appetite for taxing its citizens, what other reason could there be for imposing such a tariff?
With midterm elections less than 5 months away, populist programs that tout job creation/protection will be the rage.
In a blog post at OutsourcingPortfolio.com, it was noted that:
the National Association of Call Centers (NACC) reported that US call center employment has generally grown – even through the current great recession…
So, are we trying to fix something that is not broken? No. We are breaking things further by creating an even uglier climate for businesses trying to succeed in America.
Further, from CIO.com:
According to Schumer’s plan, companies would have to certify annually with the Federal Trade Commission that they are in compliance with the offshore call center rules, or be subject to civil penalties. But the logistics involved in actively policing offshore call center traffic could prove much more costly to the federal government than to companies that outsource overseas.
Bottom line: another government money grab that increases the cost of doing business (thus killing job growth) and adds to the cost and size of government.
©2010 George M. Tomko All Rights Reserved
Using Consultants: Rolling the Dice?
Posted by gmtomko in Collabs, Uncategorized on May 19th, 2009
Nothing represents a game of ‘chance’ more than a pair of dice. Even with “loaded” dice, the outcomes are far from certain. Very often there is money on the line, significant money. So, I couldn’t think of a better subject –gambling on the roll of the dice– to compare with the use of consultants for high stakes decisions, intitiatives, etc.
Very often, consultants come to the same conclusions as the company’s own internal analysts. There is a perception that a prestigious consulting firm can 1) validate and therefore ‘certify’ the solution as the correct approach; 2) provide risk-averse executives with a scapegoat if things go bad; 3) increase commitment of the organization’s leaders to justify the large consulting bill.
But, at the end of the day, does any of this lower the possibility of rolling “snake eyes” with respect to the issue or opportunity that is being addressed? Does the lovely PowerPoint presentation leave you ready to “let it all ride” on the next roll?
As the truly great consultant would say, “it depends”. Perhaps, surprisingly, that consultant would actually be correct.
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