As an outsourcing industry veteran of 20 plus years, my business is recommending call center service providers and geographic destinations to our clients. India at one point, dominated the call center marketplace but things have changed. Recently, I asked a number of colleagues to comment on the state of call center services in India. I asked that everyone provide a “real world” outlook based on experience. The responses that I received were quite interesting. While some feel that certain types of voice call center services will continue to thrive in India, most agree that voice contact center outsourcing is definitely declining in what was once the largest and most prolific of all BPO outsourcing markets.
The Philippines now has the largest number of call center workers in the world, recently surpassing India . In order to clearly understand how India lost ground in voice-based outsourcing contracts, let’s go back a few years. Over a decade ago, India established itself as the world’s go-to destination for contact center services for several reasons. The large English speaking population, low costs, educated agents with technical expertise and many other factors. The talent pool of well educated English speakers enabled other English speaking countries like the USA, UK, and Australia to tap into India’s most important resource—it’s people. The onslaught of outsourcing contracts led to the dramatic expansion of the call center industry throughout India. Tens of thousands of call center seats sprouted, construction companies were busy building business parks, expatriates poured into the country, bandwidth had to be increased, infrastructure needed to be improved, mega-corporations and conglomerates jumped on the band-wagon, VC money poured in and the salespeople were let loose to get the message out:
Attention call center outsourcing decision makers! Enter India! We offer cost effective call center outsourcing services implemented by highly educated English speaking agents.
It was a mantra heard over and over in umpteen sales pitches in every outsourcing media outlet and from every sales and marketing person that represented Indian call center firms including yours truly. I spent time in India in the heyday and I placed a lot of business there. In the beginning, the value proposition was realized. The “mavericks” that were among the first to move business to India, for the most part were benefiting from the initial wave of success. We established a foothold and created a success model.
This period of boom went on for several years. And suddenly, the tide turned. We started to see signs that the Indian call center industry is facing challenges including quality issues, complaints, high turnover, privacy and security breakdowns, and the mad dash of “me-too” start ups with very aggressive sales tactics that saturated the market in India. Top shelf BPO’s in India, many of which set benchmarks and industry standards began to face dramatic competition from a plethora of mid-tier and smaller contact centers that seemed to pop up everywhere. This second phase of India’s BPO life cycle diluted the marketplace and commoditized price levels. To some extent, this wave of not so impressive call centers played a very big role in the declining voice quality. The top-shelf BPO’s do not get a pass here. They’re not immune to voice quality issues either. To this day we receive sales calls from ominous call center companies throughout India, many of which are start-ups, requesting a “process” to fill empty seats.
Through my informal research I did hear from several Indian outsourcers that disagreed with me on declining voice quality. While I respect everyone’s point of view, it’s hard to refute what is now an industry wide fact, that India has lost ground to the Philippines for clear reasons centered on voice quality. I’m not suggesting that the industry will languish in India. India was primarily responsible for fueling the dramatic growth of the call center and BPO outsourcing industry. In fact, our team at CustomerServ® would still consider voice in India for specialized queues if our clients and their customers are guaranteed zero degradation in customer experience.
In many of our recent client engagements and RFPs, it’s clearly spelled out which global destinations our clients want to stay away from. Our vendors were instructed not to bid if the recommended destination was India. So why is this happening? Let’s focus on the reasons behind the issues facing voice based call center delivery in India. Let’s delineate the specific reasons why India has lost ground to other geographic destinations:
- The growth of alternative, cost effective geographic outsourcing destinations with limited barrier of entry.
- The availability of English speaking agents with minimal accent neutralization issues and improved English comprehension and conversational skills in other countries.
- The growing need for multilingual services not readily available in India.
- The over-building of call center seats in India has led to meteoric attrition levels and a severe decline in performance and quality.
- Public awareness of “outsourcing to India” and associated backlash.
- The UK and US media and late night TV have satirized the Indian call center experience, creating extreme negative and at times comedic perceptions. This coupled with real world negative customer experiences with Indian call centers makes for dangerous combination of public views on dealing with Indian agents.
- The cultural disconnect between the Indian agent and the average consumer in English speaking countries particularly the US.
- The cost associated with training and development of agents and managers to the outsourcer and client alike, with very high attrition rates in India.
- The real cost of outsourcing to India is much higher than the contracted rate. The travel expenses from frequent trips for ongoing training and troubleshooting combined with lost productivity, learning curve issues, the cost of declining service levels and performance, etc.
- The increasingly young and inexperienced agents and front-line managers.
- The lack of scalability without degradation in performance.
- First call resolution is a challenge given all of the above. This is driving decision makers to seek out alternative destinations.
I want to reiterate that I’m not suggesting India’s call center industry will capitulate. Far from it. I’m simply shedding light on an industry trend and all signs point to a continuing decline for the demand of voice services in India.
Many Indian outsourcing companies have been expanding call center operations outside of India to the Philippines, Eastern Europe, and North America and beyond. This is a sign, that Indian BPOs recognize growing limitations and the declining attractiveness of the once formidable voice destination. Indian companies are looking outside of India to mitigate risk. Many Indian BPOs have been successful at diversifying geographically and their delivery centers produce very good outsourcing services by and large.
On the flip side, India’s non-voice back office services are experiencing growth and will continue to do so. We’re utilizing Indian outsourcers for live chat sales and chat customer support with great success. Indian outsourcing continues to experience growth in non-voice BPO business (back office, chat, Web development, social media applications, medical transcription, etc.). It also appears that collections and receivables management along with certain types of help desk and technical support will continue at a steady rate.
All of us are customers of major brands. Most of us use the telephone for customer care, transactions, reservations and much more. Each of us has a story to tell about our customer experience over the telephone with an agent sitting thousands of miles away, working away at his/her desk trying to resolve our issues. I’ve had good experiences in India with companies like Sage (contact management software). Every time I’ve called for assistance, the response from Sage has been top notch and the resolution expertise has been world class. However, for every positive customer service call, I’ve had 2 negative ones and most of the time, the agent just didn’t “get it.” The agent wasn’t rude, abrupt or unresponsive and I could tell that he/she genuinely wanted to help me but the knowledge base and the cultural disconnect were obstacles that the agent simply couldn’t overcome. I’m not sure if training is an issue or simply put, perhaps the Indian agent doesn’t stick with 1 call center job long enough to develop the necessary product knowledge and customer interaction skills necessary to deliver a positive customer experience.
I’ve had some bad experiences with call centers in the Philippines too and most recently in Mauritius. I’ve had bad experiences with US, Canadian and Caribbean based call centers too. I’m not throwing a blanket of negativity on the Indian call center market. I’m sharing real world experiences from actual decision makers and people very close to the action.
India is still the second largest call center market in the world. Like Avis is to Hertz, maybe India “will try harder.” Maybe we will see a seismic shift in the industry putting India back on top. We don’t know. But we do know that large, scalable English speaking countries with agent populations like India and the Philippines are not in abundance. We support emerging destinations and diversifying to mitigate risk. We have extensive experience across many global geographic markets with rising call center outsourcing markets for English and multilingual services.
The moral of the story is to take the time to evaluate all of your options because there are good geographic destinations specializing in different call center and BPO verticals. India is still very much a powerful force in outsourcing and it will continue to be a leader. Depending on your unique business needs, we can recommend the right global marketplace and the best vendors with matching subject matter expertise to your sourcing requirements. Don’t fall into the trap of defaulting to certain countries and vendors because market saturation is a real problem. Attrition rates are a major concern in traditional and emerging geographies. Make sure that you select a location that will meet the tangible and intangible needs of your outsourcing initiatives. Geographic diversification can contribute to a positive customer experience and this could lead to the success of your call center outsourcing campaigns.