Cookie Preference Centre

Your Privacy
Strictly Necessary Cookies
Performance Cookies
Functional Cookies
Targeting Cookies

Your Privacy

When you visit any web site, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences, your device or used to make the site work as you expect it to. The information does not usually identify you directly, but it can give you a more personalized web experience. You can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, you should know that blocking some types of cookies may impact your experience on the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site may not work then.

Cookies used

ContactCenterWorld.com

Performance Cookies

These cookies allow us to count visits and traffic sources, so we can measure and improve the performance of our site. They help us know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies, we will not know when you have visited our site.

Cookies used

Google Analytics

Functional Cookies

These cookies allow the provision of enhance functionality and personalization, such as videos and live chats. They may be set by us or by third party providers whose services we have added to our pages. If you do not allow these cookies, then some or all of these functionalities may not function properly.

Cookies used

Twitter

Facebook

LinkedIn

Targeting Cookies

These cookies are set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant ads on other sites. They work by uniquely identifying your browser and device. If you do not allow these cookies, you will not experience our targeted advertising across different websites.

Cookies used

LinkedIn

This site uses cookies and other tracking technologies to assist with navigation and your ability to provide feedback, analyse your use of our products and services, assist with our promotional and marketing efforts, and provide content from third parties

OK
[HIDE]

Here are some suggested Connections for you! - Log in to start networking.

EXECUTIVE MEMBER
Ikhwal Sidiq
Assistant Manager Trade and Remittance Services
408
MEMBER
Richard Roberts
Adviser and Consultant
18
EXECUTIVE MEMBER
Selin İcer
Quality - Training & Academy Director
29
MEMBER
Thamer Noori
Director of Industrial Security and Safety Dept.
13

Article : An Indian Perspective For Contact Centers

This highlights the reasons behind the recent success of India with respect to call centers (and allied industries) and illustrates the dynamics and trends that would shape this industry in the near future.

Stages Of Growth – Depicting Ensured Growth And Profitability Prospects
The Indian Call Center industry has undergone a tremendous change in the structure, with a perceivable shift from multinational operators outsourcing to domestic partners to establishing their own operations in the country. Global names in the outsourcing industry like GECIS, Convergys and Conseco are already running full-scale operations in the country.

It all started with outsourcing to the local Indian partners, to evaluate the competence of the sub-continent for a period varying between 6 months to a year and having being convinced of the sustainability, establishing their own centers in the country.

The growth has been supplemented with an increase in contact centers for captive purposes being set up by telecom majors like Bharti, financial services giants like CitiCorp and American Express and IT companies like EDS and Computer Associates. Further, the shift of a bulk of back-office processing work to India has also contributed to the overall growth.

It is estimated that by 3Q 2002, the top three firms in India will span a total of 12-14,000 seats amongst themselves – which translates into 36,000 CSAs, occupying close to 1.2 million sq.ft. space even by conservative estimates.

If we add other contact center functions and back office operations to this, the numbers become more impressive – 170,000 seats accommodated in approximately 15 – 16.5 million sq.ft.

Global corporates are expected to continue outsourcing their outbound services since a greater level of control can be exercised, the performance can be monitored and measured easily and deliverables can be defined more easily as compared to in-bound services. This works in favour of the domestic industry since the client charge-back is generally higher than in case of in-bound services.

Even in the global call center operator segment, the top three professional companies have already initiated operations in the country and others are in the process of quality evaluation through local outsourcing. Even the latter has expressed a keen desire to initiate their owned operations within the next year. This increasingly strong linkage with the global industry players has further led to a continuous enhancement in the quality and service standards amongst the Indian players and the globally accepted performance standards have become a norm for the industry also, providing further impetus and recognition for the Indian market.

The industry growth rate has continued to rise – defying the global recession trends. The CAGR over the past two years has been in excess of 70% (in terms of employees) which is unparalleled across all other global destinations. The majority of investment is directed to Delhi, Mumbai and Bangalore. Even though the current tech-slowdown is expected to have an unavoidable impact on the industry, the growth rate will perhaps witness only a marginal decline.

Operational Strategies And Benchmarks
India has now been recognized to have a conducive environment for sustained growth and profitability for the business outsourcing industry.

This can be illustrated by the fact that a number of corporates are now looking at the second stage of expansion after reaching the threshold in their first center. GECIS has already launched operations in Hyderabad and Bangalore after two centers in Delhi (Gurgaon). EXL- Conseco, after opening two centers in NOIDA (eastern suburb of Delhi) is currently expanding into Mumbai.

  • As entry barriers increase in a particular city (read - cost of operations) due to increasing competition and saturation of low cost occupancy options, it becomes more feasible to disperse operations across two separate locations.

  • Secondly, as capacities grow, it becomes inevitable to evolve/adopt risk minimization and disaster recovery strategies – which is a reason why most corporates in the second stage of expansion are looking at alternate destinations.

Functional Segments : High Value Added Services And Specialised Customer Support
The industry has come a long way from the days of in-bound customer call handling and transcription services to out-bound services, e-crm, marketing, credit cards, claims processing and technical (IT) help desk functions. India is definitely moving up the value chain and there is an ever-increasing acceptance and recognition of the tertiary skills, which support these mission-critical activities.

  • The strength of India lies in the abundance of skilled resources, which are not just conversant in IT and English communication skills but are also available at a substantially lower cost than other global destinations.

  • Another advantage is the increasing (domestic) availability of experienced manpower which has been trained in the operations and management of such enterprises.

Human Resources Concerns
Availability and quality of human resources at a location is always a top concern to a BPO in determining its short and long-term viability. This chapter first outlines the existing strengths of Indian human resources and also highlights the issues that are faced by the existing operators.

1. Broadly speaking there are three strengths of the existing work force in India for a BPO operation.

  • The high level of total quantum of qualified (trainable) human resources available.

  • The low cost of recruitment and maintaining the work force as compared to locations in the developed counties results in tremendous savings on costs.

  • The high level of skills of the available work force also results in lower investment in training in several locations in India.

2. Our interaction with various existing operators in India has brought forward the following concerns:

  • Bulk recruitment in a few locations is a concern due to entrenchment of established international players.

  • Managing the various costs components, including real estate, keeping in mind future scalability.

  • High level of attrition rate in several locations due to presence of multiple operators.

Sustained Advantage – Labour Quality And Cost
Without doubt, the tremendous advantage offered by India in terms of workforce for such operations is perhaps unchallenged in the entire South-East Asia region. With the best universities in the country producing close to 1.2 million graduates every year, even a conservative 5% recruitment potential would translate into 60,000 fresh candidates every year. The secondary labour segments including employed manpower and part time graduate students supplement this.

With the average gross compensation for a CSA (in-bound services being in the range of US$ 2000-2500 per annum, it provides a substantial saving of upto USD 2 million per annum for a 500 seat call center compared to an alternate location in the United States or UK.

Education And Skill Levels
India has already proved its capability in terms of skills and quality of labour for both the high-end requirements of the IT services sector and also the basic skills for the IT enabled services. Complementary skills in the IT enabled arena such as quality control, finance and banking, marketing and engineering are also available at globally competitive levels.

It needs to be mentioned that the salaries are increasing regularly at close to 5% per annum primarily due to increasing competition and increasing employment opportunities with domestic and transnational corporates.

The salaries for the high-end technical services and executive staff are getting aligned to global standards – which again is evidence of the increasing competitiveness and acceptance of the Indian professional labour.

However, the low employment levels (average of 37% in the four major destinations – Chennai, Bangalore, Delhi and Mumbai) in the country – coupled with increasing literacy rates will ensure that the salary differential (between India and other overseas destinations) in the call center industry will continue to exist for the next five to eight years at least. Compare this with the low break-even periods and it becomes obvious that the time to enter India is now.

Labour Training And Skill Issues – Bulk Recruitment A Concern
Though most of the prominent operators in the market continue to prefer internal training as the most effective route, due to the rapid expansion of most centers, the trend is shifting towards sub-contracting some of the requirements to specialized training institutes. Such institutes are still limited in number and restricted mainly to the larger metropolitan cities that have also attracted the largest investment from call centers.

Secondary cities still lack the scale and capacity in this regard but this is not considered a limiting factor by the industry since internal corporate training is anyway considered sacrosanct by the corporates. At the same time, specialized trainers are quite mobile and available throughout the country.

Accents and cultural backgrounds differ immensely across the country and even though in most metropolitan cities the medium for higher education is English, a certain degree of training is considered necessary and the extent (and hence costs and time) varies in different cities.

Cities in the southern part of the country which have a strong local accent are hence not the priority destinations for voice-based operations, especially for manpower intensive operations (say an induction requirement of 1000 people annually). However since these destinations provide a substantial cost advantage, they are preferred for out bound operations for specific customer segments, including financial services, marketing and technical support.

Compensation And Employee Susidies

Food and transport are perhaps the second largest component of the employee cost-to-company.

  • It is a common norm to provide complete subsidy for food, which is at a three star catering level. Transportation benefits in the country range from all-employee shared facilities to limited flexible transport.

  • Even with a 40% (equivalent to the subsidies) extra loading over the base salaries, the effective compensation per employee works out much cheaper than in most overseas locations mentioned above.

Secondly, in the smaller cities the accrued savings can be quite substantial by lowering such costs.

  • Most of the smaller cities further providing the opportunity to optimize on transportation cost due to an efficient public transport network and availability of real estate options in more accessible central locations.

  • Entry barriers in such cities are still quite low compared to traditional global destinations. This is primarily due to lesser number of competing brands due to which the salary levels and subsidies/perks can be kept to a minimum while still avoiding high and unsustainable attrition levels.

Attrition Levels – Opportunity Costs
Due to the influx of major brands in the country, we are witnessing an increase in the staff attrition levels. The attrition rates however continue to be a brand related issue rather than a generic norm for the entire industry.

The smaller domestic brands which do not have a strong HR policy and low compensation standards are the worst effected since the trained manpower becomes an easy target for the prominent brands – both international and domestic. Since the average salary levels are quite low, even a small differential in the salaries can become incentive enough for a person to shift to a better brand. However, outside the larger metros, attrition rates are fairly low (18-25%) compared to established overseas destinations.

Since the opportunity cost in terms of business loss, extra cost in recruitment and training the replacement can be as high as 0.8 to1.5 times the annual salary of the employee – this further translates into a massive cost advantage while considering the 30-35% attrition rates in Ireland and UK.

Operational Cost : Real Estate
Most of the options found suitable for accommodating these businesses are retrofitted industrial properties which are located in the peripheral and suburban areas and offer extremely competitive rents.

Most of the operators find it feasible to retain the choice in flexibility of infrastructure and utilities and hence prefer bare shell and core space. Since call center operations require high efficiency, regular configuration and large floor plates, even industrial properties are becoming viable locations for launching such operations.

The industrial sector in India has traditionally been subsidised by the government, including the land prices. Due to this, the rentals in such properties are fairly low in comparison to commercial office space, and substantially lower than comparable property in UK, USA or Australia. In addition to a clear advantage in the rentals of such industrial property, the commercial property rates are most competitive in the entire South- East Asia region.

Operational Cost : High Profitability And Break-Even Periods
Recurring costs are the major advantage as mentioned above, and even though there may not be a significant advantage in terms of capital expenditure due to high hardware procurement and fit-out costs, the low recurring expenses serve to compress the break-even periods and improve the profitability substantially.

The break-even periods in India can be as low as 12-15 months, which is substantially lower than both UK and USA, even after a lower client charge-back. Further, by achieving higher return on investment even after reducing the client charge-back, companies can gain a substantial global operative advantage also.

Real Estate: Costs Getting Standardized But Availability Varies
Since more than 65% of the demand for real estate in the primary cities is from the IT segment, developers are now getting attuned to the typical spatial and budgetary requirements. Due to this reason, property values (for appropriate options) across all these cities are now getting aligned in the price range – US$ 0.70 – 0.90 psf pm for 'shell and core'. The only difference will be the relative locations of price zones (distance from the CBD).

Hence in the larger metros like Mumbai and Delhi (and even Chennai to some extent), properties in the suburban areas are the most likely targets while in Bangalore, Hyderabad and Pune, such properties can be found even in the off-CBD quadrants and alternate commercial districts within the city. For this reason, costs have become only a secondary concern for the companies.

There has been a significant shift from last year when there was a clear distinction between the values across the country, with Mumbai leading the pack. This was primarily due to restricted supply of good properties in the low value suburban locations but the situation has changed significantly since then with adequate choice being available in each city.

Availability of appropriate options within the most preferred quadrant in a city is however still an area of concern and requires detailed due-diligence before a decision can be taken. From bare 'Shell and Core' properties to flexible Grade A properties, there is an entire range of options which enhances the ability to control capital exposure and recurring costs. Selection of property is critical to maximize the cost advantage in establishing operations in India.

Since most of the corporates are adopting retrofitted industrial properties for their operations, the prices for such properties have been homogenous across the country and for this reason it is imperative to identify and negotiate the lowest rentals in properties which suit all other requirements, even if makes only a marginal impact.

Locational Concerns
There are three primary constituents of the location based concerns that a BPO firm considers while evaluating business sites.

  1. The quadrant preferences within each city.

  2. The policies (incentives/legal norms) that are provided by the various state governments and,

  3. The level of infrastructure available in various destinations and quadrants.

Quadrant Preferences And Transport Cost Issues
The fundamental considerations in India will be slightly different primarily because the constraints and opportunities are fundamentally different. However, the advantage of India is in the higher level of tolerance to longer commute times.

Due to the low employment rate in the urban areas as compared to UK or even USA, the labour is not hypersensitive to long commute times and travel problems. This gives more leverage for the operator to minimize his occupancy costs with commute distances being accorded secondary importance. However, this will have to be within limits of commute tolerance, which varies from city to city even within India.

Each of the states are offering extensive subsidies and incentive packages in addition to the near 100% tax holiday on income from the call center operations. Registration with STPI further implies exemption from import duties and local taxes on cross border movement of equipment.

For corporates who are looking at establishing their own campuses there are attractive incentives on land costs, exemption from transfer duties (which can otherwise constitute upto 12% of the transaction cost & relaxation in developments controls – such as increased FAR. Direct subsidies on employment are also being provided by certain states, which lead to a substantial saving on capital investment.

Women working in the night shifts as well – this was a major concern on most enterprises working on a 24/7 basis and the laws has been amended in most of the states as part of the policy initiatives for advancement of IT in the states.

Exemption from ESI and workmen compensation acts – even though most of the IT Enabled services do not come under the purview of this law due to higher salaries than the minimum limits defined under the law, it was still a concern for the lower level and junior employees. The prime concerns were in terms of extra documentation and administrative inconvenience.

Infrastructure: Connectivity And IT Infrastructure Will No Longer Be An Issue Defining Locational Competitiveness
The ground situation has changed since the beginning of this year largely due to the initiatives of both public sector agencies and private service providers. To supplement the existing bandwidth of the country, VSNL has increased its capacity on FLAG for the domestic half circuit from 380 Mbps to 1.0 Gbps over the last one year. Simultaneously, new initiatives have been undertaken by companies like Singtel to lay high capacity submarine fiber from Singapore to Chennai and on to Mumbai. This is expected to increase the international bandwidth in the country, in turn ensuring ample redundant bandwidth to the country for the next 25 years.

Till late last year the infrastructure of DOT (Department of Telecom) and VSNL was not found adequate for the requirements of the region and the extent of fiber coverage in the country was also limited to the major cities only. All-fiber connectivity (to the submarine hub at Mumbai) was fairly restricted which was an impediment to the voice based call center operations.

Between DOT , VSNL and Power-grid Corporation, and Bharti, most of the primary destinations in the country are hence linked to the submarine channels, providing adequate scalability in bandwidth on demand. After the likely privatization of long distance telephony and international full circuit leased access, there is likely to be a major improvement in availability and also a likely drop in the prices-which is currently perceived as a disadvantage in the country.

Distribution of bandwidth is also going to receive a fillip with the launch of the 50,000 km Bharti fiber network in the country, tapping on i2i (Singtel cable) and Flag (landing at Mumbai). Coupled with the augmentation of bandwidth, we are also witnessing a steady improvement in the service and reliability of the domestic links and last mile which used to be a major concern till some time back. Even though no SLA is offered currently by VSNL (who has a monopoly over the international leased circuits), the uptime has increased to 95% from most locations. This factor, complimented by the SLAs being offered by the international carriers like WorldCom, MCI and Sprint, has significantly improved the acceptance of the country amongst the major industry operatives.

Indian call center industry is on the threshold of second stage on the maturity curve and is moving towards an era of more stability and the initial euphoria has subsided. All variables point towards increasing competitiveness of the Indian sub continent for this industry. However, steps would need to be taken by the government agencies to improve the overall investment climate and evolve a supporting legal structure to ensure sustainable growth of the industry. With some key infrastructure privatization decisions expected to be taken by the government in Q2 next year, the competitiveness is expected to increase even further.


About Jones Lang LaSalle Incorporated:
Jones Lang LaSalle Incorporated (NYSE: JLL) is a real estate services and investment management firm, operating across more than 100 markets on five continents. We created a professional services approach in the industry by providing clients with total solutions to their complex real estate needs. With approximately 7,200 employees, the company provides comprehensive integrated advice on a local, regional and global level to owners, occupiers and investors.

Today's Tip of the Day - Keep Cost In Perspective

Read today's tip or listen to it on podcast.

Published: Tuesday, February 4, 2003

Printer Friendly Version Printer friendly version

2024 Buyers Guide Business Continuity

 
1.) 
Eckoh

CallGuard Remote
A flexible way to take secure, PCI DSS compliant payments from home or remote locations. It’s quick to deploy needs no changes to processes or systems.

CallGuard Remote prevents agents from seeing, hearing or recording card details so, the agent, their screen, and any call recordings are removed from the scope of PCI DSS.

This simple approach means the customer effectively types their own payment information into the agent’s payment screen, but with the card details being shielded from the agent’s view. It’s simple, and highly effective.

2.) 
Pointel

CCaaSSync – Contact Center Disaster Recovery Solution
CCaaSSync is a comprehensive solution to help businesses prepare for unforeseen disasters that may impact their Genesys cloud contact center infrastructure. Our disaster recovery solution ensures that your business remains operational and continues to provide seamless customer service even in the event of catastrophic failure of your primary infrastructure.

Our disaster recovery solution is a cloud-based service that allows you to synchronize your primary Genesys cloud contact center infrastructure with your disaster recovery Genesys cloud contact center infrastructure, allowing you to quickly and easily switch over to the backup infrastructure in the event of a disaster. This ensures tha...
(read more)

3.) 
Vads

VADS Business Continuity Plan
VADS provides a business continuity plan by providing full outsource services and manage services. we've provided this to several clients. You can contact us for a detailed study case.

4.) 
Teckinfo Solutions Pvt. Ltd.

InterDialog UCCS
Adapting to the new normal contact center industry has to be ready for work from anywhere agents to maintain business continuity. Even when working from remote locations, the work from home agents or remote agents need to be monitored for smooth customer service operations or effective tele sales.

InterDialog UCCS with its work from home agent ready call center software helps you to have complete control over your contact center operations. Agents can log in from any where , home, office or any other place where they are through their mobile phone or desktop , or even through our ID mobile app . With centralized recording & reporting , you gain visibility of all contact center metrics , and you can manage your center the same way as you were doing when working from office.
 

About us - in 60 seconds!

Join Our Team

Industry Champion Award Leaderboard

Most active award (top 10) entrants in the past 48 hours! - Vote for Others / About Program
Submit Event

Upcoming Events

The 19th AMERICAS Annual Best Practices Conferences are here! Meeting Point for the World's Best Contact Center & CX Companies Read More...
 31813 
Showing 1 - 1 of 3 items

Newsletter Registration

Please check to agree to be placed on the eNewsletter mailing list.
both ids empty
session userid =
session UserTempID =
session adminlevel =
session blnTempHelpChatShow =
CMS =
session cookie set = True
session page-view-total = 1
session page-view-total = 1
applicaiton blnAwardsClosed =
session blnCompletedAwardInterestPopup =
session blnCheckNewsletterInterestPopup =
session blnCompletedNewsletterInterestPopup =