Global Dreams, Local Nightmares

One fine morning in Phoenix, a small town in Arizona, US,
Sarah Parker, a 25-year old associate with an architect firm was leaving for
office in an ecstatic mood, the reason being her date that evening with the firm's
debonair vice president. To celebrate the romantic occasion Parker decided to
pick up some expensive gift. "That reminds me of checking my overdraft with
the bank," Parker muttered as she zoomed out of her driveway. On the next
traffic intersection, she called up American Express from her mobile: unknown to
her, the call landed up with Sandra who is sitting in a Gurgaon call center,
where the time is two in the morning.

Now, cut to Shikha Bhatia of Defence Colony in New Delhi. The
petite 23-year old instructional designer with an e-learning company, she too
has a date in the evening with the marketing manager of her organization. Like
Parker, she too decides on buying a gift for her date. As a result: she called
up HDFC Bank to check on the funds available on her credit card. Her call too
landed up in a Gurgaon call center: this time with Radha, but at a more earthly
hour of 9 am.

Besides, reinforcing that romance has the same language
across continents, the two episodes are similar on other counts too. Apart from
the fact that the call centers where Sandra and Radha work are hardly half a
kilometer apart in Sector 14 Gurgaon, it's a co-incidence that Sandra's real
name is also Radha, but that Parker would never know.

It might be the case of two Radhas both sitting in Gurgaon,
but there would be little similarity in Parker's and Bhatia's experiences
with them in the next few minutes. And therein lies the tragedy of the fledgling
Indian domestic BPO market.

Sandra nee Radha was politeness personified with Parker and
answered all her queries with utmost concern; result: though Parker obtained a
smaller overdraft than she originally thought of, she was still in a happy mood
when she purchased her gift and finally ended up having a great evening. On the
other hand, Radha sounded disinterested and curt with Bhatia. "We can't
do anything now. Our systems are down and you have to call later," she kept
on saying. Finally, when an exasperated Bhatia was about to cut off she rattled
off a long line of thank-you like a robot. Result: Bhatia started the day
irritably and ended up completely spoiling her evening.

The Horror Tales

Except the names, that have been changed to protect identities, there is
nothing imaginary about the above episodes. It is in fact this contrasting
picture that is the reason why the domestic BPO industry still does not invoke
the respect it should have otherwise deserved, though at Rs 2,640 crore in
2004-05, it makes up 11% of the entire Indian BPO industry. In comparison to the
immensely sexed up BPO export market; the domestic counterpart is not only a
poor cousin, but more like an untouchable pariah: pathetic quality of customer
service, unskilled agents lacking in basic knowledge and courtesy, uncouth
behavior, low wages; the woes of the domestic BPO industry seem endless.

With call centers now becoming pervasive even in the domestic
scenario, almost every Indian citizen surely has a litany of such woes to
narrate. Compiling all horror tales would almost make this report an anthology:
couple of experiences with this correspondent in the last one month would
probably suffice, since every one of you must have a similar tale. And mind you,
these experiences are not with any Tom or Dick company, but they involve ICICI
Bank, India's number two bank and SpiceJet, the new economy airlines that
claims to revolutionalize the Indian skies.

This correspondent was flying from Delhi to Mumbai on a 10:40
pm SpiceJet flight when an SMS arrived at 4 am informing that the flight has
been delayed to midnight. This was followed by a phone call at 9 pm informing
that the flight has been delayed to 2 am. However, on arrival at the airport at
1 am, I found that the flight had taken off at the scheduled time. There was a
whole group of irate passengers stranded at the Delhi airport, all of whom had
received the same message.

 

Only when the SpiceJet ground staff were threatened with
civil actions for willful harassment, it was found that the Ahmedabad call
center had made the call to all passengers without checking their port of origin-the
flight was scheduled to land there at 2 am. Though SpiceJet accommodated us at
the first morning flight, this sort of call center gaffe with any airline in the
Western world would have definitely merited a horde of lawsuits.

In another instance, this correspondent in Mumbai called up
ICICI Bank at least hundred times in two weeks asking for a credit card bill
statement-despite repeated promises that it would be sent both by snail mail
as well as e-mail, till date nothing has arrived. Problem is every time you
call, it is directed to a different agent to whom you have to narrate the entire
history again-a sound strategy to fend off customers, since after some time
anybody would get irritated.

Though these are not any sort of personal indictments against
SpiceJet and ICICI Bank, it is certain that if Indian call centers servicing the
Western world had behaved similarly, not only would they have invited lawsuits,
they would have definitely lost these clients. The disparity in the quality of
services that a domestic customer gets vis-à-vis an American is stark. It is
ironical that a country that prides itself as the back office to the world has
such poor customer services to offer its own people. The culture of taking
customers for granted somehow continues even today, though India has opened up
its markets to unlimited competition in almost every sector.

Despite Chaff, it Still Grows

The moral of the story is that customer care in our country begins-and
ends-with providing a toll-free number. Notwithstanding this the fact that the
Rs 2,640 crore industry has grown by 85% in 2004-05, and is poised for more than
80% growth in 2005-06, is a strong testimony of the strong growth in service
economy in our country. No wonder the key drivers of the growth in domestic
demand for BPO include the high degree of competition in the domestic telecom,
and BFSI verticals with companies laying increased emphasis on customer
fulfillment and other CRM activities.

Today all major telecom service providers like Bharti,
Reliance, BSNL, Tatas, and Hutch provide

24-hour customer tele-support and also engage in a high degree of telemarketing.
The scenario in the BFSI segment is similar to most large banks such as ICICI,
HDFC, SBI, the MNCs, credit card companies, and insurance firms making heavy use
of telemarketing and customer support.

Telecom and BFSI might have led the way, but there are other
pockets of latent demand too for BPO in the domestic market. With a host of new
airlines coming up, transportation has become a lucrative sector for BPO
industry-while Jet was already running one of the biggest domestic call center
operations; Air Deccan, Kingfisher Airlines, and SpiceJet too have now joined
the fray. Not only airlines, even that giant public behemoth Indian Railways is
going the ITeS way after launching call centers in Bangalore and Patna.
Passengers can now get all railway-related information from the call center
including fare, concession, cancellation rules, break journey, circular journey,
lost ticket rules, and even facility for planning one's journey.

Logistics firms such as DHL and Blue Dart are running large
call center operations, as large retailers such as Pantaloons and Shoppers Stop.
While franchised retail food chains such as Dominos and Pizza Hut have also
bitten the call center bug. These food chains have switched from separate
numbers for each outlet to a common hunting number, thereby enabling the company
to consolidate all incoming orders. In 2004-05, Reliance, ICICI, and HDFC were
the key players in the domestic BPO market, while Tatas too came up with E2E
Serviz Solutions that initially primarily catered to Tata Teleservices
customers. The domestic market also looked beyond voice with Datamatics offering
share registry and mutual fund-related activities, while Accenture offered
non-voice BPO as part of its total IT outsourcing portfolio.

That even such a potentially vibrant industry faces such a
problem in quality of service is a severe indictment of the policies followed by
third-party BPO players. While most of them run after dollars, the Indian
businesses remain neglected owing to lower margins. In fact, other than a
handful of players, very few even contemplate looking at the domestic scenario.
Obviously, this leads to lower salaries and consequently the quality on manpower
suffers. In addition, compared to the amount of soft skills training imparted at
export-oriented BPO units, the domestic field looks barren.

Light at the End of the Tunnel

However, desperate the scenario might be there is a gradual feeling that the
situation is changing, albeit slowly. Customers are becoming more demanding
these days and how companies treat them after selling a product/service is a key
differentiator. As corporate India wakes up to provide better quality customer
care, a whole new business opportunity is rising for the country's booming
domestic BPO sector. Inbound customer services, telemarketing, and collections
are emerging as clear favorites for outsourcing in the domestic market.

Though the fact that very few of the BPO players are today
looking at the domestic market, has a striking parallel with the IT services
industry. The fact is that the BPO sector has certain inherent strengths, which
the software industry lacks, when it comes to servicing the local market. For
instance, a BPO firm servicing a US client can use its facilities during daytime
to serve a local customer. The government deserves kudos for this. The
Department of Telecom has now permitted the use of common infrastructure for
domestic and international call centers and this decision has come a long way in
helping BPO units to optimally use their facilities. (See Box DoT Boost to
Domestic BPO) Most BPO units now lie idle during daytime; addressing the
domestic market would ensure a new stream of revenue generated out of this slack
period.

Domestic call centers also require slightly different
skill-sets in their people compared with international call centers. For one,
they do not need to stress much on the English accent. International call
centers, on the other hand, spend substantial resources in training people in
this area. Since domestic BPO units would be predominantly functioning during
daytime, logistics would also be much easier to handle vis-à-vis international
business, where people need to be picked up and dropped home.

Also, commensurate with lower billing rates, salaries will be
lower for domestic call center and other BPO agents. Therefore, though gross
margins in the domestic BPO business might not be as high as international
business, soon net margins would get 'as good.' And one hopes a part of this
would also translate into agent salaries, thereby ensuring a better and more
motivated manpower. Having a domestic arm will provide a great deal of
flexibility to BPO companies, especially in human resources management. Many
believe that having a daytime operation would help check attrition.

In the ultimate analysis, it is certain that the volume of
domestic BPO business is bound to grow. Whether the standards also increase and
reach the international levels is a question only time can answer. Till then
many like Bhatia would have their dates spoilt: the prayer for the domestic BPO
industry, today however, is nothing other than dates should get spoilt. Or in
future everyone might end up ruing a missed opportunity.

Reading the Regulation Fine Print

Sharing of common infrastructure for both domestic as well as international
call centers is permitted only to reputed companies having an annual turnover
above Rs 500 crore or the combined turnover of the promoters above Rs 1000 crore,
subject to the following conditions:

• The Companies shall submit a bank guarantee of Rs 1 crore
  and an affidavit in the prescribed format.

• Along with the application for such permission, the
  company may submit a certificate from the vendor of software that the
  software is capable of bifurcating the EPABX/Server into two separate and
  independent environments for the domestic and international call centers,
  and will not allow flow of traffic from PSTN (at the Indian end) to IPLCs
  and vice-versa; and the system logs are tamper-proof.

• Periodic audit may be carried out by the DoT.

• In case of any violation by the company, the bank
  guarantee would be forfeited and the registration of the company would be
  cancelled.

For better resilience of the system, domestic call centers
have been permitted to use ISDN for back-up of leased lines with the following
arrangements:

• An ISDN number may be placed at the call center with
  out-dialing only facility.

• An ISDN number may be placed at the remote location with
  incoming only facility.

• The service provider will confirm that only the telephone
  numbers of ISDN telephone at specific remote location can be connected.

• In case of the failure of the leased line, the ISDN
  number at the call center will automatically dial the pre-selected ISDN
  number of the remote location via the PSTN network.

For making outgoing calls, termination of the local PSTN
lines on the PABX of the domestic call centers is permitted.

DoT has agreed to permit, on a case to case basis, subject to
the submission of a bank guarantee of Rs 10 lakhs, making outgoing calls from
the domestic call center using the local PSTN connections through the PABX of
the domestic call center. Leased lines will not be used for making out-going
calls.

(Note - The above arrangement would facilitate making out
going call by the call center agent using the separate local PSTN line, which is
permitted to be terminated on the EPABX of the domestic call center. This local
PSTN line, which will be used for making outgoing calls will not be connected in
any way to the leased lines of the call centers or the incoming only lines).

The Domestic DNC

Stand-alone domestic telemarketing centers ie those without any leased line
connectivity, have been permitted to make out-going calls without any bank
guarantee. The company would ensure that it does not infringe on the privacy and
cause annoyance to the public at large and will follow the law of the land in
this regard. Further the marketing calls may be made only during normal working
hours and in case a person does not want to be called, the company may enter
such numbers in their data-base and ensure that calls are not made to such
numbers.

Rajneesh De