NEWS

BPO NEWS :



New Delhi (IANS) The growth in India’s money-spinning business process outsourcing (BPO) industry may get adversely affected by the growing backlash in the West over shipping back-office jobs overseas, according to a study.

The growth in the Indian BPO sector will also depend on government policies and incentives for the companies, said a study done by ICRA Information and Grading Service, an arm of credit rating firm ICRA India Ltd.

"The Indian BPO industry is poised for growth over the medium term. We expect the size of the domestic market to touch $12 billion by 2006," said the study report made available to IANS.

"However, on the downside, US backlash may act as an inhibiting factor for the growth of the Indian BPO industry."

The study said as the global BPO industry grows rapidly, the developed nations, which are the largest outsourcers, would have to suffer "some amount of local job loss the extent of which is uncertain as of now".

Quoting another report, it said two million jobs from the top 100 global financial institutions would be moved to India by 2008, of which 851,000 jobs would be from the US.

"It is to be seen how political and economic considerations interact in influencing the growth of the BPO industry in the near future."

India’s vast pool of English-speaking work force, coupled with its educational system and training programmes, have helped transform the country into a global outsourcing superpower.

The rapidly growing IT industry has virtually turned India into an electronic housekeeper to the world, taking care of a host of routine activities for multinational giants. India’s IT market has grown from $1.73 billion in 1994-95 to $16.5 billion in 2002-03, accounting for three percent of gross domestic product last year.

But as global recession tightens its grip and job losses in many economies become a norm, India’s cost-effective software army is increasingly becoming the envy of foreign lands.

In a major blow to India’s booming outsourcing industry, the US Senate last month passed a bill banning American companies from shipping government contracts overseas.

The ICRA report said moving up the value chain was also critical for BPO service providers as attrition rates in the industry were on an average higher in low value-added segments such as call centres as compared to high end jobs. "Already some off-shoring corporations are now outsourcing entire technology operations or business processes, including logistics, customer relationship management and finance to Indian BPO services providers," it said.

According to ICRA, the Indian BPO industry is witnessing a new phase of evaluation with several Indian companies acquiring businesses abroad.

"In the current phase of evolution of the BPO industry in India , there is an increasing trend towards Indian companies acquiring small-to-medium size businesses in overseas locations," he said.

"These foreign acquisitions mark a contrast to the practice of foreign multi-national companies setting up BPO units in India to take advantage of the lower costs here.

Call center News :

Calls should be answered in 10 seconds. Customers are kept waiting up to 25% longer to have their calls answered by call centres than four years ago, a new survey has suggested. Callers have to wait an average 29 seconds longer to have their calls answered compared to 24 seconds in 1999.

Call centres across the globe are failing to meet their own customer service targets. The number of calls answered within 10 seconds - the industry recognised standard of best practice - has fallen since 1999. Fewer than six out of 10 call centres managed to answer the phone within 10 seconds. In 1999 the survey found that more than 70% of call centres managed to meet the 10 second standard. Customers based in the US fare the worst with only 43% of calls being answered within 10 seconds compared to 70% in Europe, 59% in Africa and 58% in the Asia-Pacific.

Patricia Hewitt predicted the sector would grow in the UK despite fears thousands of jobs would be lost as firms move their operations to India. She said there was enough room in the sector for everyone. But unions argue that "offshoring" is a big problem and may call for an independent commission. But Ms Hewitt is confident the number of jobs in UK call centres will grow from its current level of 400,000. She also warned it would be wrong to jeopardize trade with India, where the UK currently exports goods worth £2.5bn. The meeting was intended to help shape the future of the call centre industry in the UK to try and make it more competitive. The Abbey bank, insurance giant Norwich Union and the rail inquiry service have relocated call centres to India. Last month TUC president Roger Lyons said the case for moving call centres abroad had not been made. He said several UK firms had looked into "offshoring" before opting to stay.

Company, which moved 250 call centre jobs to India, is bringing the work back to the UK.

Shop Direct opened the call centre in Bangalore in March 2002, to deal with orders and customer inquiries. The company says the jobs will be moved back to six centers in Burnley, Bolton, Worcester, Widnes, Preston and Newtown, mid Wales. The move is a reversal of the current trend of shifting jobs abroad to cut costs - known as "offshoring." A spokesperson for Shop Direct, formerly known as GUS home shopping, said the call centre in India had been a trial, but the level of service was not as high as the company wanted. Unions have been campaigning against offshoring for months.

The shop workers' union, Usdaw, has 10,000 members working for the group. A spokesman welcomed the decision, saying: "This decision is proof that you can cut costs, but not necessarily cater properly for your customers. "We will be using this news to tell companies they should be keeping their jobs over here.” Earlier this month, an independent report said the level of service in Indian call centers was not as high as in the UK. News that the call centre was being closed followed an announcement by Trade and Industry Secretary Patricia Hewitt giving clearance for the acquisition of Shop Direct and home delivery arm Reality by March.