Tuesday, December 30, 2003

Texas firm backs off call center deal

First Consumers National Bank call center has no takers as yet. John Pascone, president of the Albany Millersburg Economic Development Corp., had been talking for months with a Texas firm about filling the call center, which has been vacant since March 31.

Now it seems that the company - a Delaware trust called Telvista, which is headquartered in Dallas - has lost interest in the deal, and it's back to square one for Pascone, who had been working with the company since July. But First Consumers National Bank is looking at other potential clients.

Tom Womack, a spokesman for Telvista, confirmed that the firm had looked at the Albany call center, located in the old Price Chopper building in Heritage Plaza, but that the company was no longer considering the move.

Meanwhile Pascone said that are other very potential clients vying for the call center, which include a bank, a large call-center operator and two other candidates. On March 31, First Consumers National Bank shut down its call center in Albany and laid off 180 employees. That move followed a bankruptcy filing by First Consumers' parent company, Spiegel Inc. The Albany call center opened its doors in July 2001.

Marketing vacant call centers is a big challenge, in part because of the changing nature of the call center business.Not only are many companies outsourcing their customer service, technical support and other services to third-party call centers in an effort to cut expenses, but numerous firms are also choosing to open offshore offices in places such as India and the Philippines.

It's an ever-changing business. Firms definitely feel offshore pressure, but the interesting thing is that people who have done offshore are finding that the quality of service isn't as good, their clients are not as satisfied and there are language issues. So there's a variety of challenges that come with that, and we've seen people bringing business back to the U.S. because of quality-control issues.

So the call center business hasn't matured fully, only when it settles down and matures, can we see the call center market reaching its full potential.

Monday, December 29, 2003

Teleperformance sets up 100% owned call center

The news of one more firm opening its call center in India is not surprising. Teleperformance USA, a leading provider of customer relationship management (CRM) and customer value management (CVM) services, today announced the opening of a wholly owned call center in India.

The call center facility, which has a 500-seat capacity with growth potential up to 1,000 workstations, will operate as a division of Teleperformance USA providing outbound and inbound teleservices to companies looking to take advantage of lower operating costs that can dramatically improve their bottom line.

Offshore outsourcing of teleservices is becoming a viable solution for companies wanting to provide customer service and sales at lower costs than have been traditionally available in the US. Offshoring does cut their costs dramatically.

Managing director Sanjay Mehta, along with other local senior management familiar with both the Indian and American cultures, heads the call center in India. Opening call centers in low cost countries like India and China etc, is a very viable option to the firms, who can serve their clients worldwide, and at a rate at which they can’t even dream to operate in U.S. or U.K.

Sunday, December 28, 2003

Planning to open call center services in India

Any business decision boils down to weighing the risks and rewards. And so does the decision of move your call center off shore. On the reward side, the advantage of using an overseas call center is the same as importing goods from a developing country: It can be a whole lot cheaper. In India, the country most frequently touted as the next frontier for call centers, wages are about 20% of what they are in the U.S. For example you can expect to pay about $2 an hour for a call center operator, including benefits.

And the unlimited supply of English speaking graduated and not just any college graduate, many call center employees have technical degrees. GE Capital alone has over 12,000 operators standing by. John Oliver, a spokesman for GE Capital, says that in India, his company has found 'a tremendously well-educated workforce that has a very refined work ethic.'

A recent study by Datamonitor found that a 150-seat call center that costs $5.6 million to run for a year in the U.S. costs about $2.2 million in India. Service bureaus can cut into that savings, of course, but even service bureaus promise savings of 25%to 35%. Though some consultants say that the difference between call centers in the U.S. and those in India is that in the U.S., the variable costs are high and the fixed costs are low, whereas in India, the variable costs are low but the fixed costs are high. Around 150 and 200 companies say they run call centers in India.

Although opening call centers has many advantages, without clear and inconsistent training across all your training center, customer service could go for a six. According to GE's Oliver, 'The key thing is you have to approach it with rigor, you have to be dedicated, and you have to make sure it operates properly, and then it doesn't matter where the hell you do it.'

Friday, December 26, 2003

Call centers In India and Philippines look to form alliance

There’s a possibility that call centers in India and Philippines may develop a relationship due to mutual needs. The reasons for such an alliance are many, and some of them are listed below.

1.India is a rising economic power, posting fast GDP growth rates above 5 percent. For many reasons, the Philippines should pay attention to India.

2.Another reason is that India has a huge population and a market that may be as big as China.

3. One more reason is that India is a powerhouse in the global IT and business outsourcing services sector. While in some respects India and the Philippines compete with each other in this field, there’s possible complementation and alliance. For example,

A. Because of the executives providing call center services in India have a thick accent.
B. Call center executives in India have less familiarity with the US culture than the Filipinos.
C. Indians are less adept than Filipinos at certain call center services, such as telemarketing.
And that’s exactly the reason why some Indian call center operators, therefore, have been looking to invest in the Philippines so that they could offer their US clients a complete line of services, which would be served in both India and the Philippines.

Thursday, December 25, 2003

Indian BPO mantra: Talk like An American

No amount of training or exposure can teach a person to speak in the exact way a foreign language is spoken. You can just learn how to speak it, but actual intricacies of the dialect are very difficult to pick up. India's much touted, English speaking, back office soldiers who man the 24-hour call centers of multinationals round the world have been the subject of flak in the recent past --- the problem is the Indians do not speak their English the way the Americans or the British pronounce their words.

This can be more than just an irritant as vouchsafed by Dell Inc, the world's largest computer seller that decided to shift its customer support work for corporate clients back to the US, last month. Earlier this month, Lehman Brothers also decided to take back its internal computer help desk, outsourced to Indian IT major Wipro, due to the dissatisfaction with the skills offered in India.

The problems regarding the accent have just started. But there doesn't seem to be any solution. The call center executives just have to keep learning, it seems. Because these problems, at one level, seem inevitable. In spite of TV and e-mail, people living thousands of kilometers away and without local knowledge cannot always answer inquiries authoritatively.

The fear here, as exemplified by the Dell and Lehman Brothers example, is the doubts that have been creeping in about the quality of the Indian Business and Process Outsourcing (BPO) industry. Indeed, the threat to the BPO industry is generally seen as one of resistance in the developed world to jobs shifting to countries like India.

The Indian BPO industry has been growing at a mind boggling 60-70 per cent annually with revenues growing from $ 565 million in 99-00 to almost $ 2,400 million in 02-03. Future projections look brighter --- employment to over a million people by 2006, up from the current 200,000. Revenues are estimated to increase to $ 2,400 million by 2006.
It is said that while the Indian IT industry took 15-20 years to start making its presence felt, the Indian BPO industry has done it in less than 10 years.

The prescription for the current problem is two-fold --- re-training call center executives adequately to retain the current business as well as moving up the value-chain in terms of the quality of jobs outsourced.

Wednesday, December 24, 2003

2008: Outsourced call center services to tot up $735.7 million

According to a recent report by international marketing and consulting organization Frost & Sullivan, the Indian outsourcing call center services market is expected to grow to $735.7 million by 2008 from $237.7 million in 2002. Now that’s a figure that can make anybody dizzy.

Companies that require support to handle high volumes of inbound and outbound customer care, help desk and telemarketing services, for them the outsourced contact center services are offered. With better service offerings expected and growing maturity of the call center services market, India is expected to see a robust growth in demand in the forecast period. The revenues generated from the call center services market has shown a sudden rise in the last few years and has further increased due to the need of companies to outsource non-core business activities in the present market conditions.
The compounded annual growth rate (CAGR) for the forecast period for the outsourcing call center services market is expected to be 21.8 percent, which according to the report, compares positively with that for other Asian countries. The Philippines market is expected to grow to $112.5 million in 2008 with a CAGR of 20.2 percent and the Malaysian market is expected to touch $125.3 million in 2008 with a CAGR is 18.6 percent.
It is quite well known that the call center services market in India has been hugely dependent on international customers. As a result, a majority of call center services routed to India has been inbound ones catering to customer care. However, starting from 2006, the domestic market demand is expected to balance this trend towards inbound customer services.
The story on the domestic front is somewhat like this. The banking and financial services and insurance sectors have been considered as a single vertical for analyzing the call center outsourcing services market followed by telecom and high technology companies who route customer care and e-mail management services to call centers.

Tuesday, December 23, 2003

Cognizant to expand India BPO facilities, grow global staff

Good times are here to stay in India. A provider of offshore outsourcing services, Cognizant Technology Solutions Corp, is riding on plans to further stamp its presence in India. It plans to do this by building new BPO facilities and to grow its global headcount by over 40 percent, the company announced Monday. Cognizant which is based in Teaneck, New Jersey, plans to expand its branches in the cities of Pune, India, and Chennai, India, and build its first call centre facility in Bangalore, India, said Larry Gordon, a company spokesman.

Monday, December 22, 2003

Call Center training, the latest fad on the IT Street

Call centers are not the only ones who are making hay while the sun is shinning. The others who are raking in the moolah, big time are the IT training institutes, who charge a hell lot of money to teach one to speak in a firangi accent.

How can one miss the bombardment of ads for such institutes claiming to put one in charge of his/her career. They tell you how good their training is and how they've placed many people in leading call centers. The course fee varies between anything from Rs.5000 to Rs.15000. There are lots of players in this business, some big and some small. NIIT, Aptech, British council and a host of others have joined the bandwagon.

Aptech's call centre training course, "Calltech" imparts technical and professional training modules designed by industry professionals. The course includes training in both IT and non-IT skills. IT skills include topics such as Computer and Call Center Terminologies, Database Basics, Working with Customer Information, Call Center Communication Using PC, etc; non-IT skills include Customer Service and Call Handling Skills, Selling Skills, Stress Management, Language Training, and Accent Training. But students stayed away from it because they were not willing to pay hefty amounts of sum to learn the basics of English.

When the call center companies themselves provide intensive training for a month to new employees, where is the need for such a course? It is one such question that crosses everyone's mind.
According to the founder director of call centre Allsec, Mr Saravanan, every fresh recruit has to undergo an intensive training programme, irrespective of a certificate from a call center training institute. "The point is that we do not want to deviate from our own scientific method of training which is tailor made to the needs of our company", he added.

International players have also set their eyes on the call centre training industry. Recently, the City of Sunderland College, which claims to be the fifth-largest college in the UK, tied up with the Supersight Academy (SSA) to form the Sunderland Supersight Academy (SSA) in Chennai.

The four-week training course, which costs Rs 15,000, claims to offer world-class training in call centres. "SSA will offer on-site and off-site training to individuals and corporates across South India", Supersight group's executive director, Mr Nanban, said.

However, will these institutes be able to deliver what they claim?

According to Mr Peter, "Our main challenge is how to make ITES (IT-enabled services) an attractive career option. The industry today employs about 1.5 lakh people and is projected to hire over a million in the next 3-4 years, but a call centre job is still not perceived as a long-term career. We need to change this perception".

Sunday, December 21, 2003

Curbing BPO will hurt U.S., says study

The restriction on US companies and government agencies from outsourcing work overseas, paved way for a study by the National Foundation for American Policy to analyze state and federal legislation pertaining to the law. The conclusions of the study states that any restriction on global outsourcing will only harm American economy and American taxpayers. The study for that matter goes to the extent in saying that, "In fact, restrictive global outsourcing legislation stifles innovation, reduces the competitiveness of US firms, and cost American taxpayers money." “Putting an end to such kinds of restrictive bills would only benefit Americans and the US economy overall", stated the study. Such kind of restrictions is blunting America’s competitiveness.
A U.S. state government’s effort to prevent a call center for unemployment services from re-locating to India resulted in New Jersey taxpayers paying, on top of the original contract cost, an additional $900,000 for 12 jobs. A similar cancellation of a state contract to Tata Consultancy Services by Indiana Governor Joe Kernan will likely cost Indiana taxpayers more than $8 million and result in fewer services provided for the unemployed. The study further pointed out that 'saving' 1,400 such jobs in the future, would cost the state an extra $100 million.
One of the major advantages of global outsourcing or overseas outsourcing or off shoring is that it allows companies to focus their entire energy into building upon the areas of their core strengths. This way they remain competitive and gives them an opportunity to keep innovating and developing new products, in lowering costs, and also in limiting risks," the study said.
And to top it all, it also gives an American company, which is into say, Information Technology or Finance, the luxury to work in an 24*7 schedule, enabling them to serve the needs of a world wide customer base, something that wage rates and work practices generally make prohibitive with US-based employees alone, the study said.

Friday, December 19, 2003

Indian call centers face employee exodus:

Even though, call centers In India are flourishing, the employees are not a wee bit happy. The nascent business is witnessing high employee attrition rates, which is making the big industry leaders, sit up and take notice.

For the task of ensuring availability of skilled talent in the long term, NASSCOM has in fact formed a special task force to address the issue. The current average rate of attrition faced by the industry is between 30 to 35 percent. But one interesting fact to be noted here is that if you compare the rates between voice and non-voice process, the attrition is relatively less in non-voice than in the voice based process. Because of the odd and long working hours, acclimatization to the new accents and adjusting to new social and family life are the reasons, which are being cited as to why the employees don’t stick with the call centers on a long-term basis.
All this in totality, seems to be impacting professionals in the way in which they lead lives and the long-term prospects of continuing careers in call centers. Moreover the inherent nature of the job is such that it is monotonous and lacks challenge. The fact is although the employees are aware of the unique demands of the job; they are not prepared to handle the "work-life balance. They also believe their employers are not doing enough to reduce stress at work. Furthermore, employees don't look at their jobs as a long-term career option and have low expectations of professional growth within the industry, the study showed. Most of the workers are well qualified or even overqualified. For instance, most of the employees hold M.B.A. degrees. Units in Chennai employ the highest number of engineers and workers with a master's in computer applications. And although the industry is growing at a tremendous rate, it just needs to take a little more care of their employees.