Is TINA Important?

BPO is an industry segment that I have been following from its
infancy1998-99 to be precise. In the initial years, till 2003 or so, most of
the discussion was centered around how to market India. In Phase II of the
growthif I may label the 2003-2007 period as thatthe Indian BPO industry grew
very rapidly. That was also the time when the big question about India as a
location got changed to if there is an alternative to India. It, of course, came
from the rise in confidence level that had come from the rapid growth in
headcount in India. But it also came from the hype around India, the
disproportionate mind share that India got in the US, thanks to some of the
large Indian companies being listed there.

That, for some time, made many in India believe that actually there is no
alternative to the country when it comes to offshore BPO work. So, Indias TINA
factor became the favorite talking point. The only time there was some
alternative voicetalking about the rising threat from other locationswas
when the industry was demanding some more sops from the government! Media and
analysts never took that seriously.

FY 09 was a year when, for the first time, we saw a definite trend towards
some other location being preferred over India when it came to delivering a
particular kind of service offeringcustomer interaction services, where no
technical expertise is required. The Republic of Philippines has clearly emerged
as an equal, possibly better, alternative to India when it comes to delivering
non-tech support voice services.

So does that mean the big TINA factor of India is being challenged? If yes,
should we worry about it? And what does that mean for India in general and the
Indian industry in particular?

The second question is easier to answer and it is answered in this issue
quite convincingly. As many as eleven of the eighteen Indian companies (whose
full revenues have been considered) in our list have delivery centers in the
Philippines. So, should it matter to them?

But more importantly, should it matter to India as a country? There are two
ways of looking at it. One is the fact that this, of course, reflects the trend
of India moving up the value chain. While the lower value work gets out of the
country, the resources are deployed in higher value work. Strictly in this
context, tech support work or non-voice high value back office work.

We will increasingly see work going to other locations, some times because of
skill reasons, but surely because of de-risking reasons.

But India is emerging as an operational hub for BPO and in some cases even
the power center. From the countrys point of view, that is good news.

The other way of looking at it is the fact that call centers generated a lot
of employment in Indiathe high value-low value debate notwithstanding. Should
that get affected and hit the employees in the short run, as it has done in the
US?

There too, I think the situations in the US and India are not exactly
similar. Unlike in the US, most call center employees in India are young and
have been in the job for not more than four to five years. That is a time when
it is far easier to switch to different (and better) jobs than doing it when one
is at the late 40s or 50s.

A young India can be on top of the change, not be hit by it.

Shyamanuja Das

The author is Editor of Dataquest.
shyamanujad@cybermedia.co.in