Logicalis has brought its helpdesk services back to the UK, adding more than 20 jobs in Wales and raising support levels for customers.
Mark Starkey, managing director of Logicalis, confirmed the news this week. "We have created so far some 20 new jobs in Wales, and that's in the Nantgarw office just outside Cardiff," he said.
Support has been handled offshore by Logicalis Malaysia for about 18 months, but having first line of service at the UK helpdesk makes it easier to escalate customers quickly to the right person and achieve the highest possible service levels, Starkey said.
"It's not that there was anything going wrong in Malaysia," he said. "But the main reason we started to bring it back was quality of service. We wanted to enhance the services by going offshore but I think actually the opposite happened.
"It put more complexity into the information flow, and customer feedback was not as good."
The firm set up an office in Wales about five and a half years ago and has grown from just two in the first year to 60 people in 2013, mainly through serving its Welsh shared-services Public Sector Broadband Aggregation (PSBA) contracts.
"This is the first time we have actually put people into the [Welsh] office to look after non-PSBA customers and other UK customers such as Marks & Spencer, London councils, and other government work," Starkey said.
Currently, the Wales and Malaysia desks are operating in tandem, with Malaysia gradually relinquishing responsibility by the end of June. Starkey said Logicalis Malaysia will fill the gap by picking up business from the Australian operation.
Most people have been hired locally in Wales, Starkey (pictured, right) added, underlining that the skill and enthusiasm the Welsh candidates have displayed for these technical roles has been exceptional.
Further expansion in Wales in future is a definite possibility, he added.
"Bringing services back to the UK, though, is a lot harder than it seems, because you then have to re-engage everybody and get them skilled back up," Starkey added.
However, when it comes to the cost differential overall between having support in Wales or in Malaysia, there is not much in it, he said.
"Yes, it is cheaper in Malaysia, but not massively. If you are going to lose a contract for it, it might not be worthwhile. We employed technical people in Malaysia and probably got their salaries a little bit cheaper," Starkey confirms.
"We had the management function in place, because we still have the management function back in the UK in Slough, with guys who spend half their time in Cardiff, and half in Slough," he said.
Offshore or onshore?
Gillian Bailey, director of customer services at Azzurri, says it works closely with customers who have service or support desks both offshore and in the UK. There is a place for both, depending on customer needs, she confirmed.
"I would suggest though that if an offshore model is pursued for a customer that requires frequent ‘in-life' contract changes, it does need to be carefully managed, as the geographic distance and the different business processes can add complexity in ways that service desks located in UK locations do not," she added.
"I would also agree that the cost differential of locating a service desk abroad is not as attractive as it once may have been, owing to wage inflation in offshore locations, and continued efficiencies in the way UK service desks are run and managed."
According to a March report by HR specialist Towers Watson, lower-skilled and process-related work such as finance, accounting, IT development and infrastructure functions in the UK is still vulnerable to offshoring, due to the relatively higher wages in the UK compared to eastern Europe, central Europe, and other places.
That is despite having lower wages than various other western European countries, including Belgium, France, Ireland and Germany.
Andrew Steels, UK HR service delivery practice leader at Towers Watson, said in its related announcement: "Cost savings are a major benefit of outsourcing but it should not be seen as a silver bullet. Firms need to consider what is most important to their company.
"Many companies risk altering their culture and impacting customer expectations, both external and internal, so decisions of this nature should be carefully thought through."
Towers Watson's General Compensation Report says an experienced IT professional in the UK earns a salary of £42,000 on average.
Across Europe, that compares to £57,000 in Germany, £15,000 in Bulgaria and Romania, and £19,000 in Poland or Hungary, the research firm said.
PayScale Malaysia records an average salary for a senior software engineer or developer in Kuala Lumpur as around 75,727 ringgit (£16,538).
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