YEARS Indian developers have had a reputation as the offshore programming
outsourcers of choice for Western corporations because of their
high-quality, low-cost coding help. Now the continued availability
of skilled manpower at costs far lower than in the West, cultural
factors, economic conditions, and an improving telecommunications
infrastructure in India and worldwide is leading U.S. and European
companies to tap the skills of Indian outsourcers in other areas.
Indian companies are providing sophisticated, IT-enabled back-office
services for customer interaction and data processing.
Palo Alto, Calif.-based AltaVista decided to outsource customer
support for the services and products it offers on its portal, it
zeroed in on 24/7 Customer.com, a startup that runs a support center
in Bangalore, India. "We did look at many different locations --
the Philippines, Costa Rica, India, and so on," says Jeffrey Ferro,
customer care manager at AltaVista. "We decided on India and 24/7
Customer.com due to the low cost vs. the high return in quality
Customer.com now handles approximately 85 percent of AltaVista's
e-mail-based customer support. "We have a small two-person team
that handles a few foreign languages and a two-person team, one
of which is me, that handles all escalated issues," Ferro adds.
AltaVista recently terminated another provider to give all of its
e-mail customer support to 24/7 Customer.com.
Bigstep.com, which helps small companies move their businesses online,
is also outsourcing most of its customer support services to Daksh
eServices, a customer care services provider in Gurgaon, India,
near Delhi. Bigstep.com, which supports its customers via e-mail,
has 19 customer support representatives in India compared to seven
familiar with several customer support outsourcing alternatives,
and Daksh has been an excellent choice," says Monica Keenan Laurence,
the vice president of Bigstep.com overseeing customer support. "They
set high standards for their employees and the level of service
they provide customers. We receive daily updates and monthly reports
that include statistics on quality of response and productivity
of individuals, which is critical to managing a world-class customer
has emerged as a preferred location for U.S. and European organizations
planning to outsource a variety of services ranging from call centers
and other customer interaction services, insurance claims processing,
payroll processing, and medical transcription to back-office operations
such as accounting, data processing, and data mining.
Delhi-based National Association of Software and Service Companies
(NASSCOM), which includes these remotely and electronically delivered
services under the names "IT-enabled services" or "remote processing,"
estimates that India's revenue from IT-enabled services will grow
by 54 percent to about $1.4 billion in the year ending March 31,
2002. Revenue from outsourced customer interaction services grew
the fastest at 112 percent in the year to March 31, 2001.
Cashing in on this demand are approximately 204
Indian companies, according to NASSCOM. Startups and established
software companies are also getting into the business. MphasiS BFL,
a software services company in Bangalore, has set up a subsidiary,
MphasiS BPO, based in Santa Monica, Calif., that delivers remote
help desk and call-center services out of India. "Customer support
is one area where India is expected to be the biggest market in
the Asia-Pacific region by the end of 2004," says Kapil Dev Singh,
program manager for software and services research at Delhi-based
market research firm IDC India.
than outsource, a number of U.S. multinational companies have also
set up their own affiliates in India. Stamford, Conn.-based GE Capital,
a subsidiary of General Electric, operates two centers in India,
which in addition to running call centers also perform a variety
of back-office processing tasks for other GE companies worldwide.
Rock, Texas-based Dell Computer opened a 200-seat technical support
center -- which is likely have as many as 400 seats within the next
six months -- in Bangalore in June. The center offers both voice
and e-mail support to Dell's home and small-business customers in
the United States. By having its own center in Bangalore, Dell is
ensuring that it puts its own quality processes and systems in place
so that its customers enjoy the same quality of technical support
worldwide, according to Richard Chase, vice president of technical
support for Dell's home and small-business group.
was a factor for Bigstep.com to outsource to Daksh. "We can hire
three people there to one person here," says Janice Broucaret, manger
of customer support at Bigstep.com. "In addition, working with Daksh
gives us access to highly trained and educated individuals who are
not readily available in the U.S. market for customer support positions,"
Bigstep.com's Laurence adds. "We also gain flexibility to increase
and decrease staff as our business needs change."
zone difference between India and the United States also works to
the advantage of Indian outsourcing companies. "One of the main
benefits is that we are virtually working around-the-clock," says
Mike Landreth, customer service manager at Shutterfly, a Redwood
City, Calif.-based provider of photo services that outsources customer
support to 24/7 Customer.com.
we are separated by approximately 12 hours, the team in India is
on when the U.S. team is off, and vice versa. This has helped reduce
our response times considerably," Landreth adds. The difference
in time zones also enables Seattle-based online retailer Amazon.com
to provide around-the-clock support with the help of Daksh. "Daksh
is one more way for us to provide fast and efficient customer service,
as not all of our U.S. centers are open 24 hours a day, and it is
important that we have representatives available to help meet customers'
needs," says Carrie Peters, a spokeswoman for Amazon.com, which
has a minority investment in Daksh.
some of the accolades, Indian services companies have a lot of homework
and investment to do in terms of implementing quality systems, standards,
and security and confidentiality controls that customers need. "Because
of the sensitive nature of the customer information involved, clients
require vendors to ensure data security, privacy, data encryption
... and physical site access control," says Sanjeev Aggarwal, CEO
staff is just as important. 24/7 Customer.com, which offers both
voice and e-mail customer support, spends approximately $2,300 on
training a service representative. The training goes beyond the
products supported and technologies used to training staff to understand
U.S. customers and their colloquialisms, and making sure staffers
are understood by customers. "Our training program covers in detail
aspects of American culture. Then the domain-specific training covers
culture issues related to the specific program," says Prakash Gurbaxani,
CEO and founder of 24/7 Customer.com.
some U.S. companies attempt to conceal or do not explicitly convey
to their customers that they are outsourcing to a customer support
company in India -- at times even instructing the staff of the Indian
company to use English names -- other U.S. companies have found
that customers are not concerned about service providers being in
have had no adverse reaction from customers having to interact with
representatives from India with Indian names," Shutterfly's Landreth
says. "We considered assigning American names to the 24/7 Customer.com
representatives, but never felt comfortable with this tactic. Silicon
Valley is very culturally diverse, so many customers probably don't
U.S. economic slowdown is likely to be a boon to India's IT-enabled
services providers. "The slowdown will impact us positively because
companies need to take advantage of the leveraged costs of outsourcing
to be in a position to consistently shore up their bottom lines
quarter to quarter," says Meena Ganesh, director and co-founder
of CustomerAsset in Bangalore.
as the market grows for Indian providers of IT-enabled services,
some providers worry that other countries in Asia with large English-speaking
populations -- such as the Philippines -- may catch up. "I think
any location with a pool of applicants with English language proficiency
could emerge as alternatives," Bigstep's Broucaret says.
a number of Indian services companies are moving up the value chain.
"We are positioned as an integrated platform for customer management
services that help enterprises retain and enhance the value of their
customer franchise," Ganesh says. "Corporations prefer a comprehensive
option [over] a piecemeal operation, and having to coordinate multiple
agencies such as telesales, call centers, data management, loyalty
from IT-enabled services is likely to continue to grow in India
despite -- or because of -- the U.S. slowdown, but it is likely
to be a low-profile activity, because most customers are wary of
being named. "It doesn't make for good public relations in the U.S.
market to be seen to be moving jobs outside the United States, even
if it makes great economic sense," says a representative for a U.S.
company that outsources customer support to India.