BPO BOOM: Beyond the English Empire

The Indian BPO industry is making its foray into non English speaking
markets. Is it the beginning of a paradigm shift in this young Indian BPO
industry? Perhaps it is some time before we can actually start writing more on
it, depending on how much is the ‘other’ language trend able to attract the
service providers. However, experts suggest that the market is certainly worth
targeting (see box).

It isn’t surprising therefore that Indian BPO companies are beginning to
look towards the continent. At the moment, the numbers are small 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.

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 an 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 Ananda Mukerji, CEO of ICICI OneSource, "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, has a Spanish BPO center in Mexico. R Mohan, president and CEO of Hinduja TMT says, "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."

Similarly, iGate offers multi-lingual BPO services out of Germany, Italy,
France and China. Says 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."

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 and HTMT 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.

Says 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," says 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."

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.

Sathya Mithra Ashok in Bangalore
CyberMedia News Service