Ken, Indians are taking over customer service...for real.
computerworld.com
By JULEKHA DASH
(March 19, 2001) Faced with a shortage of talent and real estate in Silicon Valley, Mike Lambreth, customer service manager at Shutterfly Inc., recently outsourced some customer support functions.
But the representatives who answer questions via e-mail about digital photography from Shutterfly customers aren't just a state away. They sit in a 65,000-square-foot facility in Bangalore, India, halfway around the world from the firm's headquarters in Redwood City, Calif.
The thought of overseas customer support may have seemed far-fetched just a short time ago because of logistical problems such as high telecommunications costs and language and cultural barriers. But Shutterfly is among a growing number of firms that are not only turning to third parties to manage customer support but are also relying on workers from foreign shores.
"Finding qualified people [for core business operations] is difficult enough in this area without having to run a huge e-mail operation," said Lambreth. He added that Shutterfly receives as many as 600 customer e-mails per day. Los Gatos, Calif.-based 24/7 Customer.com manages Shutterfly's service center in Bangalore.
Yet Shutterfly is far from unique. General Electric Co., American Express Co., British Airways PLC, FedEx Corp. and Citibank, a unit of Citigroup Inc., all have overseas customer support operations.
Driving Factors
Two of the factors driving the growing interest in offshore call centers are declining telecommunications costs and maturing Internet technologies. Bandwidth costs, for instance, are dropping at a rate of about 60% per year, said Jay Patel, an analyst at The Yankee Group in Boston.
In addition, he said, many clients are even beginning to outsource their call center operations and their Web-based support overseas.
FedEx has operated overseas call centers for more than a decade, and now the company is thinking about outsourcing some of those operations, according to Sheila Harrell, vice president of strategic analysis and planning at the Memphis-based package transport firm. Improvements in telecommunications and customer relationship management software have made outsourcing an option in this arena, she said.
And although FedEx's 40 overseas call centers mostly handle queries from the U.S., Harrell said, the company is planning to network its call centers so support staffers have the customer information they need to handle worldwide calls.
"Our goal is to [operate] 24/7 around the world" and offer customers traveling abroad consistency in how their data is handled, she said.
But setting up offshore call centers isn't without its challenges. Even if outsourcers select countries with well-educated, English-speaking populations, many find that they need to provide training to familiarize the foreign staff with American culture.
Another obstacle is the high price of calling overseas. To help combat the problem, 24/7 Customer.com uses voice over IP phone systems, which send voice over data networks, instead of relying on costly traditional phone lines.
According to the Telecom Applications Research Alliance in Halifax, Nova Scotia, voice over IP can yield a potential savings of as much as 35% vs. traditional Centrex service or private branch exchange systems.
A number of Fortune 500 companies, mostly in the financial services and telecommunications industries, have already outsourced some of their call center operations but are reluctant to disclose that information, according to analysts and vendors.
"A lot of companies don't want to let you know that some other business has their [customer] data," said Brian Bingham, a senior analyst at IDC in Framingham, Mass. The problem, Bingham explained, is that some clients believe that turning over business to a company that's "outside your domain" will cause firms to lose touch with their customers.
But Elizabeth Herrell, a research director at Cambridge, Mass.-based Giga Information Group Inc., estimates that about one in five call centers are outsourced, either in the U.S. or overseas, and she expects that figure to double by 2005.
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Indian team strikes deals at call center meet
rediff.com
Shanthi Shankarkumar
A 40-member delegation from India was in Chicago this week to attend the 12th Annual ICCM Call Center Management Conference and Exposition. The delegation, sponsored by the Electronics and Computer Software Export Promotion Council of India, consisted of representatives of companies that have either set up call centers in India or are considering the option.
During the visit, at least three companies have entered into strategic alliances with companies in India.
In lay terms, a call center is a facility that handles large volume of inbound and outbound telephone calls. They are manned by "agents", individuals who act as ambassadors of an organization.
The nature of calls can vary from customer service, sales, marketing and technical support. Call centers liase between companies and customers. Besides providing basic information and answering different queries, they are effective tools for real-time marketing and market intelligence gathering, which means, you can call anytime. Most call centers work round the clock and one can be certain of getting across to a person without a long wait.
The call center has evolved into a powerful and crucial part of every successful service business. As technologies converge, call center applicants require richer, more complex multimedia. The future demands that call centers support web commerce, video calls and whatever media the customer prefers.
"Two companies have tied up on a joint venture basis and one company has tied up with a call center university to provide training services to Indian call centers agents, says D K Sareen, executive director, Electronics and Computer Software Export Promotion Council." He refused to divulge names though.
The delegation visited Lucent Technologies and Motorola in Chicago. It also visited CINCOM's headquarters in Cincinnati and will visit a call center in Los Angeles.
India is now being viewed as an exciting country for offshore call center services to developed countries. Services can be provided much cheaper in India. Call center costs can work out to approximately $ 10,000 per agent per annum in India as against $ 100,000 in the US.
"People will make the difference in call centers and India has a lot of them," says Sareen. Agents in India are now being trained to speak with American, British or Australian accents.
Depending on the company size and nature of business, call centers may be manned by as few as 10 agents to as many as 5,000.
The call center industry worldwide is already dialing a turnover of $ 800 billion. In the US alone there are estimated to be over five million agents and the number is growing at 20 per cent per annum. The industry is growing at 15-20 per cent in the US, which has a lion's share of the worldwide call center market, especially in terms of supply of technology and user market. In India, call centers are still at an experimental stage.
"Lot of work is being done in India for airline ticketing. Once we go through this initial stage there is scope for export of services like answering voice calls, responding to e-mail etc," says Sareen.
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