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Offshoring Myths? Say It Ain't So

Zelos found Indian call center agents possess the same quality as American call center agents. A new report by Zelos Group attempts to debunk what it says are "myths"about offshoring call centers. The report Business Process Outsourcing: Focus on India that compares cost between onshore and offshore outsourcing, says, contrary to belief that outsourcing is only for large firms, that a global sourcing strategy can be effective for companies with sales of less than $200 million. Answering concerns about agent quality Zelos found Indian call center agents possess the same (if not higher) quality as American call center agents. Indian call center employees all possess quality, college-level educations and were highly motivated to excel at their jobs. Also top level bureaus offer effective accent-neutralization classes. In many cases, an accent is not detectable.

 

The Zelos paper asserts that call centers and other outsourcing operations moving to India will help the country become more stable. Both the Indian and Pakistani governments have taken steps recently to literally defuse tensions between both nuclear-armed countries, such as permitting international train service. There is also growing interest in attracting US call center business by Pakistani-based firms, benefiting from the India boom. "Large US companies like General Electric have moved important business processes to India of such magnitude that any friction between the U.S. and India may affect such companies' day-to-day ability to operate," observes Bryan Mekechuk, who reviewed 18 contact centers, in five Indian cities for the report. "The result of this movement to India is an increase in geopolitical stability, as these corporations will put pressure on this and subsequent US administrations to avoid tension with India." Even so, outsourcing to India is not without its challenges. The biggest constraint is a poor road network and inadequate public transportation system. In response call centers have to transport employees to and from their homes or nearest transit hubs, which adds to traffic. Despite that limitation Zelos Group is confident such outsourcing will continue to grow, mainly from US-based bureaus locating there. According to a companion Zelos Group report, the Teleservices Datebook, offshore revenues accruing to US-based providers from international operations will reach $5.6 billion by 2008, or 25% of all revenues, from $3.4 billion in 2002. . And with that trend the cost benchmark for call center operations are moving to India from the US. The value propositions put forth by most technology vendors use the cost of labor and overall cost structure of call centers that are located in the U.S. But with more companies implementing global sourcing strategies, the relevant cost benchmarks are now those relating to lndia-based call centers.

 

To maintain their credibility, technology vendors will be changing their value propositions to reflect this. Such benchmarks may make it easier for senior management to assess the cost-effectiveness of offshoring. The paper says firms often struggle to quantify an accurate cost/benefit analysis. As corporations and public policy mandate higher levels of executive accountability, the accuracy of this type of information has never been more important. "A global sourcing strategy demonstrates to Wall Street that a company is managing costs, as opposed to merely cutting costs in a particular area," advises Mekechuk. "CEOs should be able to describe their global sourcing strategy to the Board of Directors succinctly and do so proactively. For most companies, the initial benefits of a global sourcing strategy can be realized by starting with outsourcing existing call center operations."

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