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English no more BPO’s lingua franca

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CIOL Bureau
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BANGALORE: The Indian BPO industry is making its foray into non-English speaking markets. ICICI OneSource, iGate Global Solutions, Progeon, Daksh eServices and Tecnovate now offer some services in French and German. While iGate offers services in Japanese, Mandarin, Italian and some South East Asian languages, Tecnovate has offerings in six additional languages. While MsourcE offer services in Spanish, HTMT plans to offer the same soon.



Is it the beginning of a paradigm shift in this young BPO industry of India? Perhaps it is some time before we can actually start writing more on it, depending on how much, the 'other' language trend is able to attract the service providers. However, experts suggest that the market is certainly worth targeting.



According to Gartner, while the overall BPO market is expected to grow to $173 billion by 2007, a bulk of this growth will come from Western Europe rather than North America. The European BPO market alone is expected to grown from $27 billion in 2003 to $65 billion by 2005. Interestingly, according to TPI, an independent sourcing advisory firm, Europe is the only place where deal sizes and deal values have actually increased recently, compared to a 26 percent drop in the rest of the world.



It isn't surprising therefore that Indian BPO companies are beginning to look towards the continent. At the moment, the numbers are small - seven companies mentioned above put together have a little over 500 people addressing non-English speaking customers. All of them intend to expand both the number of seats and their range of non-English services in the near future. In addition, a number of other companies including one's like 24/7 Customer have plans in the offing.



However, given that India's key advantage in BPO-in addition to pricing and quality-really comes from its English speaking population, does it even make a great deal of sense to attempt to compete in other languages? While the question may not have easy answers there are certainly some downsides that companies are keenly aware of.



The two key problem areas that experts suggest are lack of adequate number of people, who can speak these various non-English foreign languages and exorbitant cost of procuring language specialist manpower. According to CEO of ICICI OneSource, Ananda Mukerji, "there is no ready talent pool for foreign languages in India. These languages are hardly taught in schools and the few institutions who specialize in these languages are small and produce few graduates."



The option then has been to locate multi-lingual services outside of India. Hinduja TMT for instance, plan to have a Spanish BPO center in Mexico. President and CEO, R Mohan, comments, "it's tough to base multi- lingual services out of India because there just aren't enough people who speak German or Spanish or French. Basic back office processing activities can still be done out of here but if one wants to scale up to high end work and voice based services, one will inevitably have to look at other locations."



Similarly, iGate offers multi-lingual BPO services out of Germany, Italy, France and China. Said Head of Contact Centers and IMS at iGate Global Solutions Karan Puri, "we offer services out of various countries. But I believe that the eventual cost of operations will bring us back to India."



He suggests language training for local Indian labor, which according to him will also ensure lower attrition. Not everyone agrees. For one, unless volumes are sufficiently large, these employees will be more difficult to replace no matter how low the attrition is. For another, iGate has been working on-site in countries like France and Germany, which can be very expensive. Companies like MphasiS may have found a better way out by setting up cheaper near-shore centers.



According to MphasiS spokesperson Vivek Dayal, "there is actually not much of a cost difference if you choose your locations right, like Mexico. Moreover, we cut down on the costs we would spend on training the local workforce here. All considered going out makes the most sense."



Another rather far out idea is what Delhi based Tecnovate is doing. It's flying in young Europeans just out of college who are looking for a break outside the country. Tecnovate sponsors their fare to India and pays them Indian salaries. They work for an average of just less than a year but require no language, accent or culture training. They bear their own travel expense for the return journey. Said Tecnovate CEO Prashant Sahni, "We have 80 seats for multi-lingual services, of which 50 people are Europeans who deal with the voice side of the business." The rather unique model has worked reasonably well for the last year and a half but the company might have to look at different options when it expands.



THE EXPERIMENT GOES ON...



All told though, the industry is still in an experimentation mode. Most of the companies mentioned here have been offering multi-lingual services for less than a year while others are still in the planning stage. "This is a young market. No one was speaking of non-English BPO services even a year ago. We started our own services not more than six to eight months back," said Daksh services HR and training VP Aniruddha Limaye.



In what might be a really smart move though, most BPOs aren't going out hunting for European clients on their own right now. Instead, they are extending non-English services to their existing English-speaking clients. For instance, an American company that mostly wants English-speaking voice support might also have some requirement for Spanish support. The existing Indian BPO vendor offers to try that out with a few seats and see how it works. The customer gets the package deal at a lower cost.



For the long run though, the industry still hasn't made up its mind on how far it wants to go with multi-lingual support. Founder and COO of 24/7 Customer, Shanmugam Nagarajan believes, "Multi lingual services are fairly important but it is definitely not a show stopper. The world knows and is coming to us for our English capabilities. They know that they cannot expect more than English at a scalable level,"



Agrees president and founder of Driva Solutions and member of the Global Outsourcing Council in the USA Bill Price. "The non English segment comprises only one fourth of the English market at best. India has already proved its dominance in the English sector and I don't think India will suffer from competition here," he said.



However Puri doesn't really buy that. "Multi lingual skills are fairly important to the Indian service provider. If we can add Spanish alone we can easily provide for 95 percent of the current opportunities in the US markets. Adding French and German will expand reach to a good part of the European markets as well," he says.



This debate will not end anytime soon. There are a number of questions that need to be addressed. Is the non-English BPO pie worth addressing? If yes, where is it best located? Offshore in India, with all the pains of large-scale language training; onsite, where costs are higher; or is near-shore the most sensible option with no language training and lower costs? The year ahead should answer some of these questions.



CyberMedia News Service

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