Closing down the German Service

I thought it might just help to share my perspective (the inside story) of what went wrong with the German service necessitating a shut down in December of 2010 after a rather successful run. In fact, the German service at that point of time was adding clients, making money and had by then been featured in every popular magazine and media in Germany that I can think of. Something that not many services can boast of.

So to say“It had everything going for it.” Now having gone through it I will amend that to “Well almost!” So this is our story of failure at something that looked seemingly possible on the surface (at least to us).

On the journey, we did learn some valuable lessons. And most importantly and thankfully, the lesson was not too costly to drown us and throw us back into oblivion. Here we go…

02nd June 2009: It was a momentous occasion! We launched our German language version of the Virtual Assistant services. It was done after a rather elaborate pilot with a few select clients in Germany over a 6 month period where we overlapped the English service with German, on a test basis. We had hired a German native, but of Indian origin who had just relocated to India for personal reasons. At the end of the pilot the verdict was overwhelmingly positive. So we went ahead to assemble a team of German speakers in place and trained them as VAs.

The initial days were heady. Largely satisfied clients and employees who were even more satisfied due to the unique exposure such a job presented. This was probably the first kind of job where a non-native German speaker living in a non-German country gets the opportunity to speak & breathe German for 8 hours a day. Their proficiency in the language sky rocketed and so did their skills. Looked like a perfect model that could work because we provided a great platform for an aspiring German workforce in a predominantly English India.

A year went by and we added more clients and needed more people to serve them. This is when we started running into a hitch. We had estimated the German resource pool in India to be rather small but still good enough for us to scale it up to a reasonable level. But slowly and steadily, it became increasingly difficult for us to get people with right skills and the language proficiency (the package).

And we found that the companies that offered the most dreary jobs (merely translating documents) most certainly offered the biggest pay packets. We found it difficult to match them without being able to increase prices significantly. The market was still not ready to pay steeper prices on untried and untested things. Outsourcing at an individual or small business level for the German market was still a niche novelty and not mainstream. It was still experimental and not established.

Added to that, the resources we had were becoming really good at their language and hence were most sought after by the MNCs. This model could still have worked if there was a constant pool of resources being created in significantly large numbers. The German pool in India was too small for it. In hindsight, I think the German language pool outside of Europe is just too small to support any significant, scalable outsourcing activity. I have heard from other outsourcing companies based in Poland / Romania that even there, it is not as easy to scale.

Frequent attrition led to inability in providing stable services and that started affecting the quality of service that we delivered to our clients. We started getting frequent complaints and nothing much could be done about them. It was getting to a helpless situation and that was when we decided ‘it is OK to not provide services, if you can’t provide it right’.

September 2010: The fateful decision to shut down was made and it was indeed a really hard decision. We first took the step of informing the German team employees about it. They understood. They were given a severance package that was more than the stipulation as per contract and some of them stayed back with us till the last week to help clients wind up, before moving to their new jobs. My sincere thanks to them. Given the kind of skills they had, finding another job was never a problem.

We also informed our clients and gave them a 3 month notice period for the shut down. Our clients were incredibly understanding too. My thanks and apologies to them. Wherever possible, we helped them in the transition and closed the contract with every single customer, amicably by December 2010.

It was a low point for us. But the decision helped ease a lot of pressure and brought back the focus to things we possibly had a better control over.

Sunder P
CEO

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