Call Center Outsourcing Services

While call centers have evolved into multi-channel contact centers with various initiatives and technologies, telemarketing is still a basic concept within many of these centers. For those conducting outbound calling, there are certain “basics” that never change, and if followed can help to generate successful practices.

One of the first things to consider when designing a call center that will perform telemarketing services is the design. This is not to say the design of the building, but the design of the center. Will it be a traditional brick and mortar building or will it be a virtual center supporting home-based agents? Will it be onshore, near shore or offshore? And, will it only conduct outbound calls? Clearly defining the design of the call center helps to determine the correct approach to other elements within the center.

Next, the center must consider its most important asset – its agents. The center must be able to clearly define the type of individual they are looking for to fill the role of the agent; the duties that will be assigned to the agent; and what tools the call center will provide to ensure that the agent is able to perform his or her job well. The call center also needs to consider technology. Whether it is viewed as a blessing or a curse, technology is now essential for the call center. It can help to reduce time and costs, while improving productivity and customer service.

Metrics are very important in the call center arena. A complete understanding of practical metrics and how they are effective is essential to success. The center must also be able to explain the practicality of the offer and the demographics of the market that it is being marketed to in order to be effective. Costs are also an important consideration in the call center. The organization must be able to figure its return on investment, which is easily the most important aspect. It must also know its telemarketing costs, quality assurance practices, and effective reporting.

Without clear and close attention to these aspects, the telemarketing practices could easily get out of control and cost the organization more than the benefits they are established to provide. Such a contradiction can also lead to unhappy customers that eventually lead to the loss of business. Author: Susan J. Campbell is a contributing editor for TMC

Source: Telemarketing Basics Can Lead to Call Center Success

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It is a continuous thought priority to all call centers to know how they can save money in their contact centers and throughout their operations.

Few tips which is step by step to go for the cost reducing

Make a Team: Make a team which will do the review. Because call centers efforts are heading for at customer service, process improvement and potential cost reduction, form a team that can bring different disciplines to the process. Also include general training and quality training, human resources, center scheduling, telecom traffic, IT, marketing, and returns and replacement if all of these areas are within responsibilities.

Take the opinions and input of all of team members. Challenge them to assess how things could be done differently, and make them answer the question, “How can costs are reduced without lowering the standard of customer service?” These meeting we can keep in the starting of the year to set up the target.

Marks the Achievements: By marking your achievement, it will be indicator to know the performance measures up against set standards and plans. The major achievements include contacts per hour; service level; abandon rate; attrition/turnover rate; call-handle time; talk time; after-call work time; contact-to-order ratio; transaction volumes for Internet, phone and mail; non-phone volumes and others.

Review: Labor’s cost, quality and availability is becoming an issue for many call centers, particularly in seasonal businesses where the selling curve is more compressed. Review advertising media costs and results, and exchange information with other human resource departments. Review pre-hiring testing, employee selection criteria and practices. By review process we can know the possible improvements and cost reductions for the process. It will help us to know more about a place for temporary agencies rather than relying completely on in-house hiring.

Revenue Generation: As part of their mission, many contact centers are charged with becoming revenue centers in addition to taking orders and providing customer service. By revenue generation reports we can show about success with cross-selling, up-selling, outbound selling and increasing the company’s average orders. It will be really help full for the cost saving in call centers.

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Some companies are realizing that their call center staffing processes are not only inefficient, they are also very costly. Many are seeking an alternative and are turning to RPO (Recruitment Process Outsourcing) as an option. Recruitment process outsourcing (RPO) is a growing trend in which companies outsource all or part of their hiring functions to find better-quality people to staff your call center. RPO can be used successfully to fulfill a range of hiring needs for organizations; and is particularly well suited to call centers. Specifically, RPO delivers benefits for call center operations that include sourcing higher-quality candidates, improving fill ratios and “show rates”, decreasing turn-over, and reducing hiring costs.

Recruitment Process Outsourcing (RPO) is a form of business process outsourcing (BPO) when an employer outsourcers or transfers all or part of the staffing process to an external service provider.

An RPO engagement can be structured in one of three ways depending on the needs of the company: Enterprise, Selective or Project RPO.

In Enterprise RPO, the partner manages the entire process across all skill categories and all locations. Selective RPO involves managing a subset of locations or a subset of recruiting processes, such as sourcing, screening, interview scheduling or offer letters.
In Project RPO, the RPO provider delivers hires for a one-time hiring project.

In all three scenarios, a dedicated RPO team works directly with the hiring manager to create a tailored program to meet the call center’s specific needs. The team can work on-site at the client’s locations, off-site in its own facility or a combination of the RPO Benefits

Organisations that partner with RPO specialists can realize a range of significant and sustained business benefits, all of which can be measured.

These benefits include--

Securing the best talent: Competition for the most talented individuals is increasing. Organizations need to secure the best people quickly and efficiently to help them build competitive capability.

Cutting recruitment costs: By transforming processes, utilizing best practice, and replacing a fixed cost base with a variable charging structure, RPO can significantly reduce the cost of recruitment.

Removing the administrative burden:RPO providers take on the burden of operational recruitment activities, making organizations free to focus on value-creating and strategic activities.

Delivering higher quality services:There are many stakeholders in a recruitment process; through improving processes and measuring experience and outcome, RPO providers can demonstrate highest quality services.

Mitigating operational risks:Risks come in many forms, and the expert knowledge of an RPO specialist can help organizations mitigate the risks associated with an inability to scale their business operationally to meet changing market demands, and the risks of non-compliance to legislative and regulatory change.

The more sophisticated and experienced RPO providers will also have a system of “forward-looking” analytics to ensure that hiring goals will be met for each “hiring class.” This predictive process analyzes how many candidates are in the pipeline.

How to hire an RPO provider

If you think an RPO partner could measurably improve the quality of your call center hires while containing costs, research several firms and choose carefully. The field is expanding quickly but there is a wide range of experience, knowledge and track record of success/failure. Specifically, you may want to ask potential providers some key questions, including--

How many RPO clients do you have?
How many hires do you support annually?
What experience do you have with call centers? And what types of call centers?
What percentage of your clients is reference able?
Are your recruiters dedicated to one client or do they work on multiple clients at the same time?
Do you have the flexibility to scale up and down as my needs change?
What is your client renewal rate?

As call center recruiting, hiring and retention remains a challenge for many companies, RPO is emerging as an important option. With turnover down. Significantly decreasing costs -- an increasing number of call center and human resources professionals have embraced RPO as an innovative strategy and a smart business decision.

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India is growing in the BPO sector at present India is unquestionably the BPO superpower of the world. But it is also true that the competition is always on. There are other strong competitors of India who might ruin India's BPO. There are lot of countries and one which on top is China.

China is one such country which can eat into the BPO share market of India. But for the time being India is well ahead of China because of some inherent advantages. India is currently booming in the BPO arena and has scored over China to emerge as the top offshore destination for Global businesses. In the 2004 offshore index, India remains the star performer. It has once again captured the top spot in outsourcing by a comfortable margin due to its strong mix of low costs and noteworthy depth in human resources. This fact was brought out in a study conducted by AT Kearney, an international consultancy agency.

India has a very important advantage, their command of the English language. There are lots more Indians with good English skills than Chinese. Forrester also endorses the view that scalability of resources (talent pool) is the major factor that makes India an attractive offshore location. “The cost of operations in India can be 20-30% higher than places like Vietnam or lower than places like Brazil. But part of the challenge for these countries is the lack of skills. There is a very limited set of low-end work that companies like GE are looking at and lack of quality resources makes it hard for these countries to get started. The work going offshore today is geometrically more complex than the Y2K work that India got started on with,’’ says Mr McCarthy.

India proved better than China on account of several factors. The study pointed out that China lags behind India in terms experience and other important factors like IT and management education, language skills, concerns about intellectual property and overall country risk.

According to the study, although India and China are the market leaders in this sector, there are huge opportunities present in the market to give ample space to other countries like Philippines, Vietnam, Romania, Kenya, Sri Lanka and North America market to grow.

The study also said although it is unlikely that India would be able to retain its number one slot with China aggressively trying to outstrip it in the business, it would still be able to get a decent share of the pie.

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It is true that now day’s employees are not working for salary because they want to relaxation in job. Most youngsters do not like joining the business process outsourcing (BPO) due to stress and health issue. BPO employees are quitting BPO job’s to get rid of the stress and strain at work place. Employees do not quit due to salary issues alone. They are least bother about the salary. All the companies are giving good salary.

Now companies are providing good services to fresher and experienced employees with openings with good salary. But preference of the employees now goes to the office where they should have some fun and entrainment for getting relaxation.

In fact, stress and health weren’t even among the ‘top three’ factors for leaving a company.Union Health Minister A Ramadoss recently called for a “health policy for the tech sector”, stating: “(BPO employees) have a sedentary lifestyle. They smoke, go for late-night parties, and even take drugs. Some get heart attacks in their mid-20s”.

Employees are facing stress problem in BPO due to that their health is down. If customers are not getting comfort and the full relaxation in BPO companies then they quit the company. The good part is that if the industry is aware to checking indoor air quality to testing food in labs then it will be really.
Employees of Indian BPO firms, on the other hand, were overall content with their jobs in 2007, states the survey. They were satisfied with the job content, work culture, training, and appraisal.

However, it added that they were not satisfied with the image they were stuck with, and least satisfied with their salaries. The average salary hike in the BPO industry grew by 14.8 per cent only in 2007 as compared to an increase of 17.2 per cent last year.

The direct outcome of the fall in salary hike is the increase in attrition rates. The attrition rate went up to 20 per cent from 18 per cent in 2006.
Hyderabad-based Brigade, for instance, appointed a chief fun officer to look into ways of ensuring low employee stress levels and keeping them highly motivated.
The survey also revealed that while large firms ranked better in parameters like work culture and image, niche companies were better in terms of salary and job content.

Now days all call center are providing the best service to employee to give them comfort and the satisfaction in job. The stress level is really sometimes very high but the companies are also focusing to reduce the stress on employees.

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It is true that now day’s employees are not working for salary because they want to relaxation in job. Most youngsters do not like joining the business process outsourcing (BPO) due to stress and health issue. BPO employees are quitting BPO job’s to get rid of the stress and strain at work place. Employees do not quit due to salary issues alone. They are least bother about the salary. All the companies are giving good salary.

Now companies are providing good services to fresher and experienced employees with openings with good salary. But preference of the employees now goes to the office where they should have some fun and entrainment for getting relaxation.

In fact, stress and health weren’t even among the ‘top three’ factors for leaving a company.Union Health Minister A Ramadoss recently called for a “health policy for the tech sector”, stating: “(BPO employees) have a sedentary lifestyle. They smoke, go for late-night parties, and even take drugs. Some get heart attacks in their mid-20s”.

Employees are facing stress problem in BPO due to that their health is down. If customers are not getting comfort and the full relaxation in BPO companies then they quit the company. The good part is that if the industry is aware to checking indoor air quality to testing food in labs then it will be really.
Employees of Indian BPO firms, on the other hand, were overall content with their jobs in 2007, states the survey. They were satisfied with the job content, work culture, training, and appraisal.

However, it added that they were not satisfied with the image they were stuck with, and least satisfied with their salaries. The average salary hike in the BPO industry grew by 14.8 per cent only in 2007 as compared to an increase of 17.2 per cent last year.

The direct outcome of the fall in salary hike is the increase in attrition rates. The attrition rate went up to 20 per cent from 18 per cent in 2006.
Hyderabad-based Brigade, for instance, appointed a chief fun officer to look into ways of ensuring low employee stress levels and keeping them highly motivated.
The survey also revealed that while large firms ranked better in parameters like work culture and image, niche companies were better in terms of salary and job content.

Now days all call center are providing the best service to employee to give them comfort and the satisfaction in job. The stress level is really sometimes very high but the companies are also focusing to reduce the stress on employees.

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The compaction between the companies is very high. At this movement it is very important to take care of each thing at the company. Workers spending too much time on social networking websites such as Facebook are costing employers a staggering £130m a day according to the findings of one recent survey, and the problem looks set to become much worse if businesses fail to take action, and fast. Facebook shows 125% growth year over year.

The findings from the survey show that some 233 million hours are lost every month to employees surfing the net, with social networking websites causing the greatest concern. It is a fact that these particular websites are very addictive and can often result in users remaining on the sites for hours rather than minutes. Whilst this is worrying news for employers, help is now at hand thanks to a powerful and effective range of software packages available to small to medium sized businesses.

To know about the details of the system there is software which effectively monitors and records everything employees do on their computer and the internet, providing employers with the perfect low-cost solution for monitoring employees. You can use of the software packages significantly prevents, reduces or eliminates the problems associated with abuse. In doing so employers have successfully stamped out inappropriate activity, reduced security breaches and prevented 'Insider' theft.

May be it happened that employee will not feel happy to know that someone is monitoring their work. But as a employer of the company it is very important to have this kind of software a your work place. You will get lot of protection from the improper activities like opening the social networking site at work time or any shopping site etc.

Many employers have been happy for their workers to use the internet for personal use as long as ultimately they do their job and reach their targets. However, this is now proving to be a somewhat costly decision for many businesses as loss of productivity and lack of concentration has proven to significantly hinder their overall performance.

You can choose the latest software packages to monitor the system of your work place. With this you can also stop the cause of the social networking problem.

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Work-from-home customer service reps are a rapidly growing trend, with the number of such workers predicted to rise 375% by 2012

The trend for call centre workers to be based from home is set to increase rapidly over the next five years as businesses look to cut customer service costs. Analyst Datamonitor claims the use of outsourced home agents is now becoming a mainstream option for businesses. There are currently around 47,000 home-based outsourced call centre workers working 20 hours per week or more globally - predominantly in the US - and Datamonitor predicts this will rise to almost 224,000 by 2012.

Peter Ryan, Datamonitor senior analyst for contact centre outsourcing and offshoring, said in a statement: "It is clear home agents are no longer a passing fancy, and are rapidly becoming mainstream." The different demographic profile of home-based agents is one of the reasons companies are going down this route. They tend to be older and have more work experience than typical call centre workers, have higher customer satisfaction levels and lower attrition rates, according to vendors of home-based agent services.

There are security concerns about the safety of customer data with this model but the report found home agent providers use thorough background checks on prospective recruits and use real-time monitoring analytics. The main industry sectors embracing the home call-centre agent model are healthcare, insurance, technology, tourism and travel. In the UK the AA is a big user of home-working call centre agents, although it employs these workers itself rather than using a third-party.

The AA has almost 300 home-based call centre agents across its roadside breakdown and insurance businesses taking calls from motorists and dealing with insurance quotes. Trevor Didcock, who has just left the AA as IT director, said: "People will be in their homes with a dedicated workstation that is plugged into the automatic call distribution [system]."

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Many firms rush through the important organizational stages of call center technology selection projects and chaotically leap into analyzing products based only on the functionality that's needed -- or worse, they start the selection process with a specific vendor already in mind, Brian Hinton warned a roomful of ACCE attendees.

Selecting effective call center technology is a matter of following a highly defined process and identifying the risks associated with each product being considered.


"How are you going to sort through all of the options?" said Hinton, a senior consultant with Strategic Contact, who boasts 10 years of call center consulting experience. "The way to find the right [software] is to apply a structured process to analyze your options."

First you need to decide the call center and organizations goals. Hinton suggest a series of tips for approaching the vendor selection process with an open mind.



• Call center technology selection: Things to avoid
• Be open-minded for selection of call center vendor.
• DON'T consider products before thoroughly defining your requirements.
• DON'T think solely about functionality.
• Do not let the vendors control the process.
• Do not make cost a top priority.
• Never ignore the RFP.



Other factors to consider during the initial stages of a call center technology selection project include whether to go with a hosted or on-premise provider, a niche offering, or a software suite to handle call center processes.
Involve a cross-functional team in the decision-making process
Including on the selection team someone from IT and from the telephony group, in addition to call center representatives, will help ensure that the needs of all departments are considered during the call center technology selection process.

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The gruesome rape and murder of a Bangalore call centre employee has spurred police in Delhi and the call-centre hubs of Gurgaon and Noida to chalk out strategies for beefing security for the thousands of women working night shifts in the satellite towns.

With the background of 500 rape cases in Delhi this year, the police of Delhi, Gurgaon and Noida have decided to take the identity proof of call centre drivers, including their photographs and finger prints, in a move to instil a sense of confidence in the women.

"There is certainly a sense of fear among the women employees and our primary aim now is to ensure absolute safety of these workers. From Monday we are starting a special security drive in Gurgaon for call centre vehicles," said Hanif Quereshi, senior superintendent of police (SSP), Gurgaon.

"We are also holding a meeting with the call centre authorities to strategise about the security. We will take the identity proof of all the drivers, cab owners and even travel agents who are providing cabs to these multinationals," Quereshi said.

"Besides, photographs of cab drivers and their finger prints would be collected with immediate effect for our records and it will certainly help both the BPO industry and the city police," the SSP added.

He said a couple of call centres have begun the identification process on their own earlier.

Bangalore call centre employee, Pratibha Srikant, 24, was on Wednesday night raped and brutally murdered by a cab driver who picked her up at around 2.30 am for her early morning shift.

Women constitute around 60 per cent of the 20,000 people employed in different call centres of Delhi, Gurgaon and Noida. With a large number of call centres located in Delhi, especially in the south, Delhi Police is keen on increasing the security.

"It's a concern for any police department where business process outsourcing is happening in a big way. Sometimes next week all our top officials will sit together to discus the issue and provide a clear directive on security measures," said Praveer Ranjan, deputy commissioner of police, south Delhi.

In Noida, the police are equally concerned. S Yadav, superintendent of police, Gautam Budh Nagar, Noida, said that though the security of call centre employees is a private matter, the police was "not satisfied with the security arrangement of these organisations".

"As a responsible institution, we are holding a special meeting with all those firms. First we will take the feedback from them and depending on that we will give our directives," he said.

"We hope every precautionary measure would be put into place by the end of next week."

"The first thing that we are going to do is advise them to keep a guard in the cab and never allow drivers to pick or drop a single woman worker. The women employee should not be picked first or dropped last," he said.

Some call centres in the region have decided to increase the security for women workers.

"We are concerned about the safety of our employees and have directed the transport and facility department to make sure that no woman employee is picked first or dropped last. We are ready to cooperate with the police and do what ever is necessary," said Gaurav Jain, manager facilities of IBM Daksh, a leading BPO network of the country.

However, women workers are scared and want their organisations to tighten the security.

"Though there is a provision for sending a guard in the cab, sometimes one finds the guard missing. More importantly, the call centres should ensure that there is not a regular change of driver," said a woman employee of GE.

"Every day you find a new driver and cab coming to pick you up and it's very natural to be apprehensive while with a stranger," she said.

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A RECENT study by Hill and Associates, security and risk management consultants, on the attrition rate in the BPO sector, threw up some interesting insight.The study was conducted on targeted respondents that included the young population employed in the outsourcing business and with undergraduate, graduate and post-graduate education and who had changed their job at least once in the past three years.

Key findings
The survey revealed that most people join a BPO to gain exposure to an international level work environment and the infrastructure that BPOs provided.
Not for `quick money', a `luxurious lifestyle' at a young age and a `career' that requires no particular educational background.

Exits from BPO happen because of reasons like lack of growth avenues, expectation mismatch, dissatisfaction with organisational policies, and the quest for a better job profile.
Not night shifts, monotony of work and lack of salary hikes. Where the HR department took steps to deter exits such as giving salary hikes, promotions, shift changes and other incentives, it did not succeed completely.

The survey revealed that respondents were overwhelmingly in favour of better career growth opportunities and improved company policies.

The survey indicated that more than 60 per cent of the employees join a BPO after seeing job advertisements in newspapers or through manpower consultant references. The study found that the communication pattern of advertisements positioned the BPO job at a level much higher than its real delivery.

An overwhelming 75 per cent of the respondents were financially independent of their families.
Yet, a sizeable section among them turned to their families for support if they felt the need to quit their jobs. This cushion provided by the social support system often drove the respondents to quit their jobs at the first hint of any inconvenience on the job.

The study says that the steps to manage attrition are not yielding the desired results because of the mismatch between the aspirations/expectations of the employees and the very nature of a BPO job.
It concludes that there is need for a higher degree of due diligence at the hiring stage.

At the hiring stage itself, companies need to make the prospective employee aware of what the job exactly entails and make an assessment of the potential response of the candidate in such job settings.

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The contact centre market in India is expected to see a major change in the next two years with third party service providers expected to dominate, according to a study by independent analyst firm Datamonitor.

“Just 36% of agent positions in India were offshore outsourced at the end of 2004 with the remainder located mainly in offshore in-house operations of big multinationals. However, by 2007, the tables will have turned in the outsourcers’ favour,” says Datamonitor.

“By 2007, new outsourced seats will outnumber captive ones by a factor of 10:1 in India and the outsourcers will continue to hold sway going forward. Just 12,000 net new captive seats will be added between now and 2009,” the study predicted.

According to Datamonitor, more firms are set to follow the likes of British Airways, Citibank, General Electric and HSBC and spin-off a part or all of their captive operations in India.

Firms that have chosen to lock in shareholder value by tapping into the offshore labour arbitrage model by establishing in-house offshore centres, will look to deliver further returns, either by selling off their captive offshore operations or by outsourcing the processes to third parties, the study said.

According to Datamonitor, over a quarter of a million new call centre agent positions will be added in India and the Philippines through 2009.

Both countries will see substantial growth in call centres now that the US presidential elections are out of the way allowing US and UK businesses to ramp up their offshore operations. While India continues to dominate the global offshore call centre outsourcing landscape, the Philippines threatens to poach some activity as its own market grows in strength.

Besides the attractions that India and the Philippines offer western firms in terms of low cost access to highly skilled call centre and back-office staff, the two markets will also demonstrate substantial growth in their domestic call centre markets.

By 2009, close to 1,00,000 agent positions will be serving the Indian domestic market while the Philippines will have 21,600 positions.

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A recent survey by the Singapore-based ACA Research and Michigan-based Fortune 500 staffing firm Kelly Services, seems to says that the Filipinos are steadily progressing in the BPO business and may outsmart the Indians soon.

While an Indian BPO agent is likely to remain sick for 15 days every year, Filipinos manage with only 8 sick leaves per annum. They are also more loyal. While your next door BPO guy spends less than a year (11 months) at a BPO, his Filipino counterpart spends 19 months on an average in a company.

But Indians take heart. When it comes to conversion of calls into actual sales, Indian BPO agents are clear winners. 35 per cent of calls routed to India get converted into actual business as compared to the Filipino rate of 25 per cent. So, Indians beat Filipinos beat when it means business, i.e. selling skills!

When it comes to training a Filipino agent, you have to invest less. Very few call centres spend time on voice and accent neutralisation. So automatically the duration of training period gets reduced.

While an Indian BPO guy takes 24 days to get trained, his Filipino friend spends only 19 days as a trainee.

When it comes to multi-lingual skills, Filipinos are much verbose. 64 per cent of Filipino agents can speak more than two languages as compared to India where only 40 per cent multi lingual skills.

Due to superior English language skills, the Philippines is the only country where BPO exports exceed IT exports. In 2003, BPO exports were double of IT exports at $600 mn.

Why Phillipines is emerging as a Global BPO hub?

The Philippines is an emerging BPO hub because of cultural compatibility with the west, especially the US. The Philippines was under the US rule for almost 50 years. It led to the Americanisation of the Filipino culture. 80 per cent of the population is Catholic. 15 per cent are Muslims.

The Philippines is the third largest English-speaking country in the world. About 72 per cent of the population is fluent in English.

The Philippines has one of the highest literacy rates (94%) in the world.

The US military rule had also laid a strong base to the country’s telecom infrastructure. The country was under the US rule from 1898 until 1935.

It's interesting that in the case of India also the British rule had helped in giving a huge popularity to the English language.

Canada and Ireland are also benefiting from their language skills to advance their outsourcing business.

Mexico, which was under Spanish rule from 1521 to 1810, has bagged a huge chunk of Spanish voice processes from US. According to the US Census Bureau, there were about 28 million Spanish speakers in the US in 2000.

In the Philippines, similarity in legal and tax framework with the US has eased the administrative bottlenecks for the American firms setting captive BPOs there.

Chevron Texaco, AOL, P&G, Accenture and Dell have set up centres there. Major BPO hubs in the Philippines are Manila and Cebu City.

So can Philipines beat India at the BPO battle?

The answer is a clear and big No.
Scaling up of operations is a major challenge which call centres in Philippines face. The country has a small population. Universities churn out only 70,000 IT graduates each year as compared to India where the figure runs into lakhs. India churns out more than 4.5 lakh IT graduates every year.

So, outsourcing your high-end work to the Philippines can be a real challenge.

Attrition rates in Filipino call centres are lower at 20 per cent as compared to India’s – 31 per cent. Currently, there are about 100 call centres in the country.

Companies such as HSBC, Dell, AIG and UPS have all outsourced their business to the Philippines.

But our Desi BPO executive is willing to work at much lower than that of his Filipino equivalent. The hourly cost per seat in India is $3.18 as compared to Philippines' $3.82.

So, do Filipinos make better BPO agents than our Desi BPO guys? The answer that emerges from the facts and figures from the survey by ACA Research and Kelly Services is yes.

But these findings are only for the call centre domain. When it comes to high-end BPOs work such as teleradiology, engineering design or software development, India leads the way.

Long way to go way, Phillipines!

By: Call Centers India

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Indian back-office firms face a growing challenge holding on to employees, even as they hire tens of thousands every quarter.

Indian back-office firms face a growing challenge holding on to employees, even as they hire tens of thousands every quarter.

Staff tend to account for half of a back-office operation’s costs, according to research firm Evalueserve, and the battle for talent has led to a 10-15% rise in employee salaries.

Recruitment and training makes up 3% of the overall per-employee cost of about $13,000 per year, including administration and telecoms costs, according to Evalueserve.

But the really damaging cost is the lost business for companies which cannot fill key jobs quickly enough. Many face a shortage of mid-level manpower to manage their rapid growth as they lure clients with promises of 40% to 50% cost savings.

As the industry clocks up 50%-plus growth, demand for quality personnel is outstripping supply. Employees often hop to new jobs for slightly more money, and many do not view back-office work as a career.

Companies provide free transport, subsidised meals and housing to retain staff, and try to enliven the environment with musical entertainment, yoga classes and costume contests.

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Is the Indian BPO industry beginning to move into a mainstream position from being in the non core, call centre dominated fringes of global BPO?

If so, the stakes are that much higher because there is much more to lose by not paying heed to roadblocks.

We have seen the Indian BPO industry grow, mature and consolidate. While it certainly deserves all the attention it is getting, has the industry moved beyond simple call centre or tech support work that it started out with? Is it ready to take on large chunks of back office operations that will make a dramatic impact on client organisations?

Emerging trends – leading indicators?
I believe that the last 6 months have seen some very important shifts in the BPO landscape. Some of these changes are subtle but nonetheless, directionally significant.

More than non-core processes
I recently saw a half page advertisement in the Times of India from a leading Indian BPO, for MBAs, economists, financial analysts, accountants, PhDs, mathematicians etc. for quantitative research and analysis.

Even without knowing further details, this highlights some important facts – firstly, this is truly high end work; secondly, this is a big win for the company (justifying the cost of such a large advertisement); thirdly, this represents core processes – activities like financial research are the heart of any trading business.

The inescapable conclusion is that something has certainly changed from the supply side. And if the client is willing to move this type of work into India, then something has also changed from the demand side. Cynics might point to a number of boutique research companies who have been around for the last two years.

However, all these companies are tiny, niche operators who get by on small pilot contracts. This is the first public evidence of scale that I have seen in mainstream high end work like financial research.

Captives – no longer the obvious solution
The recent sale of GECIS, following earlier deals done by Swissair and BA (i.e. sale of captive units) are causing clients to seriously question the captive model for large outsourcing deals.

In part, this is due to the emergence of credible third party BPOs who have moved beyond call centres and demonstrated their ability to handle complex, end to end processes. It is also partly due to the realisation that cost centre mindset in a captive will never achieve the operational efficiency of a focussed, well managed, profit driven third party supplier.

India – integral to a global organisation

By: Call Centers India

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Despite challenges from China, the Philippines and Eastern Europe, India still has an overwhelming advantage in IT offshoring, according to Wipro chairman Azim Premji. "Areas such as China, Eastern Europe and the Philippines are becoming major players in IT offshoring but India still has an overwhelming advantage because of the support of the government and the country's huge talent pool," Premji said in an interview published in The Independent on Sunday. Wipro benefits from being able to recruit from the top 50,000 engineering graduates turned out from Indian universities and colleges each year, he said. "In a land of so much poverty, IT jobs are very sought after. Software has so much credibility and visibility that the first choice of a village parent is for their child to be an engineer. We get the choice of the best of the best." With clients as diverse as Prudential, Friends Provident, National Grid Transco, Nokia, Microsoft and the Scottish Parliament, Wipro is in the business of installing, running and sorting out organisations' IT systems. Referring to increasingly tough stance being taken by the US Department of Homeland Security on visas for IT workers, Premji said "It is unfortunate, because you can't have one-way traffic in liberalisation.

"The Western world is looking for the developing world to liberalise all the time, to stop restrictive practices, and then it wants to put its own restrictions on business coming out of the developing world. If the West wants emerging markets to open up they have to be open," he said. In mid-2003, Premji said he wanted to transform Wipro into a global leader in IT services, breaking out of being simply an Indian business selling to the West. Since then, it has made a series of acquisitions, but mostly small ones. Premji said the group is not yet ready for any big leaps. "At this point, we are looking at a string-of-pearls acquisition strategy, not an Accenture or IBM." Wipro's evolution has also led to the development of what is called "near-shoring" - setting up relatively small local centres for clients that are not ready to hand all their IT business to a company thousands of kilometres away in Bangalore. In the UK, Wipro has opened one such centre in Reading. It also has five offices in the US, with others in Kiel and Munich in Germany and Tampere in Finland, as well as in Stockholm and Yokohama. "They are basically a bridge park, where the customer is conservative and is not willing to take the leap to the global delivery model," said Premji. "Typically they will work with the near-shore centre, where we can work closely with them."

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There is little doubt that Anup Kamath will return to Goa. The Mudgaon-based mechanical engineer has been lured to join one of the country’s largest third-party offshore BPO operations . Attraction for him is a four-fold jump in this net salary from the current level of Rs 4,500. His only regret is being late in joining his peer group at the BPO centre. The case of Sarika Arora of Andheri is just opposite. The young school teacher had joined the same BPO company a year ago. She gave up teaching for an attractive salary. Recently, while returning home from the call centre she fainted in the vehicle provided by the company. Now she is being treated in a hospital for ailments ranging from hypertension, asthma to spondylitis. Head hunters find a co-relation between the two events. “Availability of manpower in metros is becoming a major problem because those who have worked for about a year, find the job boring and taxing, inspite of lucrative remuneration. “Emerging job opportunities in other fields with better salaries is dissuading young generation from joining call centres or BPO companies. Textiles and retail sector has become both remunerative and attractive in post-MFA regime,” Ms Shefali Tripathi, director of Career Genii. “Finding it difficult to lure lads in metros, head hunters are recruiting students from smaller cities. Smaller, cities like Mundgaon and Panjim are the fertile ground for recruitment for BPOs based in Mumbai, a Goa-based job consultant said.

The shortage of manpower for BPO operations in metros is becoming a major problem. According to National Association of Software and Services Companies (Nasscom), BPO sector is experiencing job attrition at 50%. About half of the staff employed by an offshore BPO company leave within one year. This is happening despite a 10-20% salary hike in the sector in last one year. Alarm bell is ringing for BPO operators. They need to find a solution. They can neither afford the knowledge loss (due to high training cost), nor can they continue to increase salary (as basic premise of offshoring is low-cost operations). “In this scenario, de-urbanisation is the only solution. BPO operations are shifting from metros to smaller cities like Jaipur, Coimbatore, Nasik and Mangalore,” says Mr K Sudarshan, managing director of EMA Partners International. According to him, BPO operations will shift to those towns which will have better educational infrastructure to ensure supply of workforce. “This is the reason why, Coimbatore and Jaipur have been able to attract companies like Wipro, Infosys and GE,” he adds. According to Mr Sudarshan, de-urbanisation is the only effective means to manage attrition problem and it will have far reaching impact.

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NEW DELHI: Bharti Televentures, the No 1 private telecom service provider in India, and the poster boy of Indian domestic outsourcing market, is about to go for yet another outsourcing deal. And this time it is a business process-customer service.
The company has decided to outsource most of its front-end customer service call centers and has invited RFPs from potential vendors. The company plans to finalize the deal in the next couple of months, according to sources. Post-deal, only the high value customers will be served directly by Bharti's call centers. The company today has close to 2,000 people in its call centers.
It is learnt that many offshoring service providers will be competing for the deal. Unlike the typical offshore contact center outsourcing deals, Bharti plans to work out a price based on per minutes and not based on a fixed per FTE. Also, the company is looking at a small number of outsourcing service providers for the entire piece of work, which will make the deals quite sizeable.
When finalized, this will be a benchmark deal in more ways than one. For the offshoring service providers, it will be a benchmark in terms of pricing, cost, and the entire business economics. The fact that Bharti is looking at a per minute pricing and not a typical per FTE per hour pricing, will also be a challenge for many, not so familiar with this pricing model.
On the user side, it will be the first such big deal in call center outsourcing. Though Bharti has been a pioneer in outsourcing, both its other deals-network outsourcing to Ericsson and billing application outsourcing to IBM-are telecom specific and has no major learning f or companies in other verticals. On the contrary, the call center deal, if successful could be a benchmark for all companies in general, and all consumer service companies in particular.

By: Call Centers India

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At a time when the Government of India is striving hard to balance its books, it may seem blasphemous to make out a case for an extended tax holiday. As it is there is a strong argument – very well reasoned and appropriate for our times – to progressively dismantle the complex web of exemptions and pave the way for a larger tax base but with moderate marginal rates of tax.

The proponents of this school of thought frown at the continued tax exemption given to the Indian software industry, though the current dispensation will run out in 2009. But surely there is still the need for a closer look at some obvious aberrations. The issue here is one of internal consistency especially since the current scheme under Section 10A provides for an exemption from income tax for a period of 10 years from the commencement of business in an approved software undertaking or 31 March, 2009 whichever is earlier. Notwithstanding such a stated position, the department seems to be taking a view that is different in certain circumstances. For example, where the new software undertakings have been set up under an earlier STP license, the tax holiday period in some cases have been held to cease at the end of the expiry of 10 years from the date of the original license, even though such software undertakings have not completed their ten-year run. Our belief is that this is not in the spirit of Section 10A and is an unintended consequence. If we set the context to what was intended by the legislature, which is undeniably giving the IT Sector the fiscal relief till 2009, a mere technical shortcoming cannot and should not cause the denial of such an intended benefit. Apart from the above technical issue which can get clarified very easily, there are other opportunities to make it easier for tax administration and facilitate efficiencies through restructuring. Once such opportunity is available in Section 72A as it stands on the statute book today.

While the tax credits for carried forward losses of companies taken over through a scheme of amalgamation has been envisaged under Section 72A, it seems odd that BPO/ITES units are excluded in the list of eligible undertaking. It is more of a drafting oversight I think. The authorities are well aware that there has been a mushrooming of several small size BPO ventures in the heady days of year 2000, which are today faced with lack of traction and have become attractive candidates for M&A opportunities. It would be in the larger interest of both the ITES industry and CBDT if Section 72A is amended to provide for the necessary tax relief becoming available with respect to an amalgamating BPO entity. Allow transfer pricing regime to stabilise There is an urgent need to facilitate the creation of an extensive database required to benchmark the arm’s length pricing across industries. Both the Assessee and the department are at a disadvantage for want of any robust database which will give rise to some vexations litigation. The present safe harbour limit of ± 5% is very marginal, keeping in mind the evolutionary stage of the Transfer Pricing legislation in India. It is strongly recommended that the said limit should be increased or aligned to international level of about ± 15%. The current provision stipulates a penalty of 2% on the value of the International Transaction which by all means is very stringent and harsh given that all the double taxation avoidance agreements contain adequate provisions to check possible abuse through related treaties. Further, such penalties are unwarranted at this nascent stage of Transfer Pricing legislation which was intended to be a tool for anti-avoidance.

While the tax credits for carried forward losses of companies taken over through a scheme of amalgamation has been envisaged under Section 72A, it seems odd that BPO/ITES units are excluded in the list of eligible undertaking. It is more of a drafting oversight I think. The authorities are well aware that there has been a mushrooming of several small size BPO ventures in the heady days of year 2000, which are today faced with lack of traction and have become attractive candidates for M&A opportunities. It would be in the larger interest of both the ITES industry and CBDT if Section 72A is amended to provide for the necessary tax relief becoming available with respect to an amalgamating BPO entity. Allow transfer pricing regime to stabilise There is an urgent need to facilitate the creation of an extensive database required to benchmark the arm’s length pricing across industries. Both the Assessee and the department are at a disadvantage for want of any robust database which will give rise to some vexations litigation. The present safe harbour limit of ± 5% is very marginal, keeping in mind the evolutionary stage of the Transfer Pricing legislation in India. It is strongly recommended that the said limit should be increased or aligned to international level of about ± 15%. The current provision stipulates a penalty of 2% on the value of the International Transaction which by all means is very stringent and harsh given that all the double taxation avoidance agreements contain adequate provisions to check possible abuse through related treaties. Further, such penalties are unwarranted at this nascent stage of Transfer Pricing legislation which was intended to be a tool for anti-avoidance.

By: Call Centers India

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