India seeks to become world's back-office

Rosemary Arackaparambil

MUMBAI: The chattering youngsters, many dressed in Western-style casual

clothes, alighting at a train station in a northern Mumbai suburb appear headed

for a college campus.

But it is late at night, and they are making their way to a nearby plush

office complex. There, in a huge brightly painted "shopfloor" whose

walls and pillars are adorned with colourful posters, they settle down behind

computers, pull on headphones and spend several hours speaking English with an

American accent.

These 18 to 26-year-olds working for eFunds Corp unit E-Funds International

(India) handle direct tele-marketing calls from customers halfway around the

globe for US-based call center operator West TeleServices. They are part of an

emerging workforce for India's latest export offering -- IT-enabled services.

These include tele-marketing, helpdesk support, medical transcription,

back-office accounting, payroll management, maintaining legal databases,

insurance claim and credit card processing, animation, and higher-end

engineering design -- all of which can be delivered by phones, computers and the

Internet.

India is aiming to become "the world's back-office". A McKinsey

study has estimated e-enabled services could be worth over half a trillion US

dollars globally by 2008.

"I think there is no better or more promising area for India. It plays

to India's sweet spot," Pramod Bhasin, president of GE Capital Services

India, which runs the country's largest such enterprise, said at a recent

venture capital seminar in Mumbai.

GE Capital's 10,000 strong manpower offers accounting, claims processing and

credit evaluation services to 80 branches of General Electric Co around the

world. Countries like Australia, New Zealand, Ireland, Canada and the

Philippines have long provided call center services but India, with its cheaper,

skilled, English-speaking and IT-savvy workforce is fast becoming attractive.

The National Association of Software and Services Companies (Nasscom) has

forecast India's revenues from IT-enabled services to rise more than 20 times to

Rs 810 billion ($16.94 billion) by 2008 from Rs 40 billion last year. Industry

officials say Indian companies can offer these services 30-40 per cent cheaper

than their competitors.

Calling more



Some 208 IT-enabled service companies are currently registered with Nasscom, but
there are many more.

"The biggest opportunity in IT-enabled services in India is call

centers," said Johnathan Everett, managing director of venture capital firm

The VIEW Group, which manages $40 million.

"India is currently barely scratching the surface." Call center

services can extend to emotional help, as Bangalore IT-firm Phoenix Global

Solutions plans to do. It has hired 50 people for a pilot project to counsel

troubled American people.

Nasscom estimates that about 68,000 people are employed in the Indian

IT-enabled services industry but forecasts this could rise to 1.1 million by

2008. With starting monthly salaries of Rs 8,000-10,000, the opportunities are

good for many of India's job-seeking graduates.

Several foreign firms like HSBC, Standard Chartered Bank, American Express

and British Airways are setting up back-office processing centers in India.

Indian IT firms like Wipro, HCL Technologies, Mphasis BFL and private telecoms

group Bharti Enterprises are among a few that have announced plans to expand

their services offerings to the IT-enabled business.

"The main reason we decided to do this is because it is a different set

of services for the same set of customers," said Ramesh Enami, chief

technology officer of Wipro Technologies.

Investment in staff



But Indian companies need to build marketing skills, strong infrastructure, and
tackle cultural issues to grab more business. Call centers usually hire Indians

with neutral accents. Most are located near big cities such as New Delhi, Mumbai

and Bangalore.

The firms focusing on US customers train their operators in American culture

and linguistics. Some give the impression that they are located in the United

States and agents adopt American names to make callers feel comfortable.

But despite the relative novelty of the business, Indian firms face attrition

rates of 20-25 per cent, partly because most agents are young and keen to move

on. Besides investments in telecoms, computers and power back-up, call centers

need to invest in agent interest and training.

Telecoms and software firm GTL Ltd's 1,000-seat center near Mumbai houses a

gymnasium, prayer room, baby-sitters and recreation room to pamper and retain

agents. Experts say that while retaining staff was important, companies also

need to join hands with foreign partners to lower the cost of customer

acquisition and expand business.

(C) Reuters Limited.