Check out The Most Innovative, Highly rated Contact Center World Events EVER!
...Thousands of past delegates agree! - BOOK YOUR PLACE TODAY!
NORTH and south americasSTARTS IN:
ORLANDO, FL USA
asia pacificSTARTS IN:
KOTA KINABALU, MALAYSIA
BEST IN THE WORLDSTARTS IN:
Network, Learn, benchmark in this unique best practice forum with the best practitioners in the World
...who run centers and take your center to new levels of performance, engage staff, improve service and more!
Industry Research : Indian Call Centres Put on Hold
We have all been through it: "You are placed on hold … waiting time is currently five minutes … "Press 1 to enter your card number, 2 to report a lost card, press 3 to speak with an operator." "Please hold the line, we are trying to connect you."
It's all too familiar snippet of 21st electronic conversation for most people around the western world - the monotone instructions of an infuriatingly impersonal Indian call-centre's answering service. Truth is, in today's tech-led world it's hard to avoid coming into contact with business process outsourcing (BPO), whether you are booking airline tickets or transferring money.
India is famous for it. The country's BPO bonanza started in the 1990s in the country's Silicon Valley - the city of Bangalore. It was propelled by new communication technologies, the emergence of broadband, government incentives and talented programmers.
Fast-forward to this year and India's BPO industry is in danger of losing some of its allure to more nimble, better functioning and cheaper outsourcing countries. The situation has changed so dramatically that your call may no longer be answered by Sanjay in Bangalore after all - but by Felipe in Manila. Or Nisa in Kuala Lumpur. Or Song in Shanghai. China, Philippines, Malaysia and even the United States are now places where today it is possible to find cheaper back-office support services than in Bangalore.
"Indian BPO sector is now competing against Philippines and China purely on cost. That's definitely not the best spot to be in especially when internally, one of the biggest problems for BPO companies is depreciation. Controlling costs is a big beast to tame," says Ajay Chaturvedi, the founder and chairman of HarVa, a BPO company focused in the rural areas.
He is right. India is no longer the holy grail of "cheap everything" as there has been a steady increase in costs caused by rising wages, investments in infrastructure updates and running costs. A quick look at job adverts in the Indian newspapers show that an English-speaking call centre worker can now command up to US$250 (Dh918) a month, nearly double the salary of five years ago, according to the National Association of Software and Services Companies (Nasscom).
But industry experts point out India's glory days are far from over and refute claims of rivalry. "It's not about India versus Philippines," says Sangeeta Gupta, a senior vice-president for Nasscom. "Philippines' BPO growth is driven by Indian companies. Many Indian companies are using these companies to outsource part of their business processes like language operations. They are complementing each other, not competing," she adds.
Despite the industry denials, quarterly results of BPO giants speak for themselves. The Indian heavyweights Cognizant and Infosys have both warned of demand slowdowns and another outsourcing company, Wipro, is currently undergoing restructuring to boost its profits.
Admittedly, the global economic downturn does directly affect Indian BPO companies - trimmed IT budgets in Europe mean the chips are down in India's Silicon Valley.
Still, there is some kind of growth in the horizon. Nasscom says the Indian IT-BPO sector will grow more than 15 per cent this year and the total revenue for the sector was about $88 billion last year with about 19 per cent from the BPO sector. Then there are data security issues, too, that are hampering growth. The European Union has not approved India as one of its data safe nations, which means European companies are increasingly wary of transferring their critical business there.
"It would be in India's benefit to ensure its data protection laws and enforcement regime will stand up to EU scrutiny if the country is serious about wanting to join the small but growing club of nations with EU data secure status," says Ritu Singh, the head of NIIT Technologies, a BPO company. Clearly, the industry wants this to happen but the country's infrastructure needs to improve dramatically.
"Strategically, this would help India to move up the value chain into more sophisticated outsourced work in sectors such as health care, clinical research and engineering design," says Ms Singh.
"The government has not done anything conclusive yet other than providing funding in the usual formats. What is needed for tapping the rural and wider market is to create holistic ecosystems and not stand alone in industry subsets," says Mr Chaturvedi
But it's not the time for the Indian BPOs' swansong - just yet - as the industry is specialising fast. "Large players will still be able to offer the mass services, but there is also an emergence of niche BPO players specialising in health care, architecture, secretarial services and these areas continue to grow and expand," says Ms Gupta.
Secondly, the industry is coming up with new business models. One of the growth areas is gaming. Currently gaming is worth about $500 million a year business India - tiny in comparison to global $500bn figure. But as it becomes a serious business, so do the opportunities for this sector increase.
Thirdly, the key to success among the emerging BPOs is to offer diverse services in different locations. "New business models. Moving to different kinds of pricing models to please the customer too will provide upside. "Many BPOs are moving to an 'outcome based model' - pricing rather than people-based one - so everything that happens in the call centre is more about the outcome. They are showing a lot more flexibility today," says Ms Gupta.
Posted by Veronica Silva Cusi, news correspondent
Today's Tip of the Day - Planning For Potential Disaster
Published: Friday, May 18, 2012