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They Came, They Saw...

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DQI Bureau
New Update

Patrick F O’Neal is president and chief executive officer of Sento

Corporation, an Utah based US customer interaction services company that is a

pioneer in service portals and handles millions of emails for supporting the

queries of technology companies such as McAfee, Network Associates, and Intuit.

He recently forged a strategic alliance with E Serve Technologies, an HCL

Technologies company, to divert part of his technical support work to India.

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"I have no doubt that India is best suited for executing this type of

work. In some respects, it is better than the US itself," says Patrick O’Neal.

He is but one of the several chief executives who expresses deep conviction in

the capabilities of India. O’Neal is in august company. Convergys, Sitel,

West, Teleperformance–the big names of the call center industry in the US are

here in India.

"Setting up operations in India is much easier than one thinks it

is," says Pramod Bhasin, head of GE Capital International Services, which

pioneered off-shoring in India. "There are challenges, but they can be

overcome," says Bhasin, emphasizing that if something is to be done

remotely, it can be done in India. This seems feasible today, but the road was

far from smooth a while ago. In as late as December 1999, few companies were

interested in talking about their India plans. At least three companies with

"no immediate plans" then, are operating in India.

Global

Outsourcing Companies Operating in India
COMPANY SIZE* INDIA

PRESENCE
LOCATION
Convergys,

US
#1 in

in-bound

#6 in out-bound
Direct and Indirect Gurgaon

and outsourced to an Indian company in

Bangalore
West

Corp, US
#1 in out-bound

#4 in in-bound
Direct, through JV Mumbai,

as a JV eFunds West Teleservices
Precision

Response, US
#2 in in-bound Outsourced Outsourced

to Motif, an Ahmedabad based

company
TeleperformanceUSA

Stream, US
#4 in out-bound

#7 in in-bound
Direct

Direct, through a JV
Gurgaon

Mumbai, as a JV Stream Tracmail
Sitel

Corp, US
#8 in in-bound

#9 in out-bound
Direct, through JV Mumbai,

as a JV Sitel India, with Tata

International
ClientLogic,

US
#9

in in-bound

(interactive)
Outsourced Outsourced

to Vcustomer, an Indian company

having facilities in Mumbai and Delhi
Sento

Corp, US
A

pioneer in self-help and

service portals
Outsourced Outsourced

to HCL E Serve Technologies, Noida
7C,

UK
Direct Has

opened a facility in Gurgaon
*The

rankings are based on Customer Interaction Solutions magazine (17th annual

ranking ) of in-bound and out-bound

teleservices agencies,

published in the March 2002 and April 2002 issues

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What has changed?

As usual, the biggest inhibition was the lack of confidence in the new

model. Today, India has been declared a success having been tried and tested by

a string of players. Here are some of the major reasons for the change of

attitude towards India...

Positive image: Thousands of Indian executives, and intermediaries

have been working full time in the US. They have managed to sell India as a

destination that spells reliability. Most importantly, there is a much better

knowledge about India today in the US than it was a few years ago.

Tried and tested: In the last few months, many US based call center

companies have tried subcontracting to India in a small way. Convergys for

example, subcontracted a few seats to Bangalore-based 24/7 Customer before

deciding to start its own center in Gurgaon. Stream International outsourced

some work to Tracmail, before its joint venture with the company. Client Logic

also outsourced some work to Vcustomer. The buzz in the market is that it is

also looking for a full-fledged center of its own. Precision Response has

outsourced work to Ahmedabad-based Motif and there are talks that this

partnership is likely to be strengthened.

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Top

Overseas Outsourcing Firms Yet to Come to India
COMPANY SIZE* WEBSITE
DialAmerica

Marketing
#2 in out-bound www.dialamerica.com 
TeleTech

Holdings
#3 in out-bound www.teletech.com 
APAC

Customer Services
#3 in out-bound www.apaccustomerservices.com 
GC

Services
#5 in in-bound www.gcserv.com 
Millennium

Teleservices
#7 in out-bound www.mmtel.com 
TeleSpectrum #5 in out-bound www.telespectrum.com 
ICT

Group
#8 in out-bound www.ictgroup.com 
Aegis

Communications
#10 in in-bound www.aegiscomgroup.com 
RMH

Teleservices
#10 in in-bound www.rmht.com 
*The

rankings are based on Customer Interaction Solutions magazine (17th annual

ranking ) of in-bound and out-bound teleservices agencies,

published in the March 2002 and April 2002 issues.

The slowdown: The biggest catalyst for outsourcing service providers

making a beeline for India has been the slowdown. The downturn in the US economy

meant that cost suddenly became critical for many of the US-based clients of

these call center companies. In fact, many call center companies were

pressurized by their clients to look at India as an outsourcing destination.

Convergys for example, admits that it is the clients who wanted it to come to

India. As the rates dropped, thanks to off-shoring to India, competitors were

forced to look at India too. Also, Indian companies like Spectramind, Daksh, and

24/7 Customer proved that India could deliver services better, not just at a

lower cost. Soon, Indian companies were viewed as challenges.

Who’s who

Several of the top US-based companies are already in India. As the table

shows, Convergys, Sitel, Teleperformnce USA, West, and Stream have a direct

presence in India. Precision Response, ClientLogic, and Sento are working with

Indian companies. The major companies who are missing from the list are

DialAmerica Marketing, TeleTech Holdings, GC Services, APAC Customer Services,

ICT Group, Millennium Teleservices, Aegis, and Telespectrum. TeleTech did survey

India and decided to defer a decision in as early as 2000. APAC Customer

Services’ executives too reportedly visited India in late 2001 and were

considering working with two Indian companies–in Noida and Bangalore. The ICT

Group too is apparently poised to step into India.

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Will the road remain smooth?

If one looks at just the outsourcing market dynamics, the answer is a yes.

India is not only cost-effective, but is better in terms of capabilities like

technology support. The government is now sensitized to the vitality of the

development of this segment. That means growth for this opportunity. But does

that mean that global service providers would continue to expand rapidly on

Indian shores?

Market observers believe that this is unlikely. "Large companies who

have sound infrastructure in the US would be reluctant to move in to India in a

big way," says O’Neal of Sento. Take Convergys, for example. It has more

than 35 call centers in the US and just one in India. Moving more jobs to India

would mean that the infrastructure would become redundant. Then, there is the

politically sensitive issue of jobs going out of the country. If pursued

further, this issue could soon boil over. In the UK for example, trade unions

are already upset and are forcing companies to commit that they will not move

more than a certain percentage of jobs outside.

But the biggest issue could still be one that no one is talking about now.

When work moves to India and other such low rate markets in a significant

manner, it will result in lower toplines. Though bottomline as a percentage of

topline/investment would not go down or go down a bit, the absolute bottomline

is also likely to fall. This will create pressure on listed companies. It is for

this reason that big, listed companies would be a little slow to move. The trend

however is irreversible. In the next few months, more companies would join the

bandwagon. While the trend thus far has remained restricted to US, companies

from UK and Australia would also start moving in. UK based 7C is the first

non-US company to move a part of its operation to Gurgaon.

Even if the size of these companies remains small, the entry of these players

is bound to have a positive impact on the Indian industry. It means faster

knowledge transfer, better benchmarking, and over all, a more aware work force.

Shyamanuja Das/ Voice&Data in New

Delhi

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