India seeks to become world’s back-office

By : |December 30, 2001 0



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.

                                 

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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.

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