Offshore outsourcing: Delhi calling

Consumers may have lost trust in offshore outsourcing, but more companies see the advantages beyond the stereotypes. Virginia Matthews reports from India.

Customer complaints about Powergen have dropped by 78% over the past 12 months, according to latest figures from the independent watchdog Energywatch, propelling the company from the very bottom of the satisfaction league for energy providers to second from the top.

While clearer bills for the company’s six million customers are one part of the equation, the firm has no doubt that the most significant change has been the repatriation of all back-office operations – including call centres – from India to the UK.

Whether you choose to believe that widespread dissatisfaction with offshoring comes down to underlying racism – which is what BT, a fierce advocate of Indian business process outsourcing (BPO), claims – or to protectionism over jobs, the fact is that many consumers balk at being put through to Bangalore or Delhi when they want to talk to service providers in the UK.

Over the past 18 months, a significant clutch of high-profile UK companies have pulled out of India – among them, Lloyds TSB, Abbey, NatWest, Aviva and Powergen.

Customer pressure

Most have cited consumer pressure around language difficulties or fear of identity theft, but there are growing reports too that the quality of service experienced by customers and clients is, at times, far more patchy than the Indian BPO industry – which now faces growing competition from China, the Philippines, Mexico and Brazil – would have us believe.

While the firms that have withdrawn from India have won praise for responding to consumer pressure, Mark Kobayashi-Hillary, offshore director of the National Outsourcing Association, believes there is a worrying amount of misinformation involved.

“Some big-name financial institutions have been very adept at manipulating the negative headlines over services in India by implying they have withdrawn altogether when what they have actually done is just repatriate their call centres,” he says.

“While I would agree there are distinct problems with offshoring a company’s voice-based customer-contact operations, or indeed cold sales calls, it is a different matter when it comes to IT support.

“In the experience of many big telecoms firms, when it comes to helping fix a problem with a computer, the customer is far more interested in what the call centre agent knows – which in the case of India is an awful lot – than about their accent or where in the world they live,” he says.

“The truth is that many so-called ‘repatriators’ are strengthening their back-office operations in India, even if pulling out of call centres earns them good publicity.”

Clear conscience

Norwich Union, part of the Aviva Global Services Group, has a clear conscience when it comes to its own extensive outsourcing operation in India.

Its HR director, Russell Martin, stresses that, far from being simply a matter of reducing costs, Indian BPO firms now lead the world in terms of their quality of service to clients and customers.

He believes that while there is growing competition from other markets, such as China, India will remain the number one offshore destination for UK firms.

Despite the clear commitment to BPO though, Martin is acutely aware of the negative headlines and says the firm monitors customer attitudes to the issue on a “daily basis.”

“Customers dislike interactive voice response (IVR) systems – where callers are given menu options to choose from – so we use the time difference between India and the UK to ensure that more calls are directly answered by agents,” he says.

“Although a tiny number of customers do complain about overseas call handling, we have had fantastic feedback on the whole, and have found that perceptions about offshoring have shifted as a direct result of the excellent service they have received.”

“If there were to be any decision taken to offshore elsewhere or to repatriate back to the UK, the HR department would take an absolutely central role.”

If Norwich Union’s customers are happy though, the same cannot always be said of its workforce. “Staff are always very sensitive about the issue of offshoring, but it is very easy for them to hold polarised and ill-informed views,” says Martin.

BT, which claims to have made savings of between 40% and 60% on everything that it has outsourced, has argued that at least some of the consumer resistance to offshoring is thinly veiled racism. It is a point that has been reinforced by Indian call centre staff themselves, who say the abuse they routinely receive from customers is now unacceptable.

Racist abuse

“Young women graduates once saw call centre work as being a great career choice,” says Shailaja Sharma, who at 29 quit her call centre job in Jaipur after “two years of almost daily racist and sexist abuse”.

Sandip Mehra is spokesman for the Delhi-based organisation Vcare Call Centres India, which offers outsourcing advice and services to around 15 European and US-based organisations, including Phillips. He says that while it is true that consumers can be sceptical about Indian telemarketing operations, the BPO revolution in India is a “success story that will only grow and develop”.

And although staff abuse makes for good headlines, India’s expertise in in-bound customer service and transactional work should be the focus.

To Kobayashi-Hillary, who agrees that recruitment and retention of call centre staff is becoming more difficult, racism is less significant than fears over ID theft.

“There’s a general fear in the UK about discussing your personal banking details with someone 5,000 miles away in a developing country, where the staff may be motivated to sell details to the black market.”

He adds: “Ironically though, chances are you’re more vulnerable to having your personal details chucked in a refuse bin at a call centre in Glasgow than you are to encounter identity theft in Delhi or Bangalore.”

Case study: Norwich Union

Norwich Union, part of Aviva Global Services, continues to buck the trend for call centre repatriation with an offshoring operation – primarily in India – that takes in a range of administrative processes, financial and legal services and IT applications and development, as well as call centres.

The company has 7,000 people in Bangalore at present, 1,600 of whom made the transition from third-party partner staff to direct Aviva employees in January. The company says it will repeat the process with a further 1,600 staff during the coming year.

Day-to-day management is via a dedicated HR operation in Bangalore, which has strong connections to the UK HR team. Training of call centre agents, says Norwich Union’s HR director Russell Martin, is “intensive” and includes “cultural awareness, sensitivity to UK customers, and empathy with the product”.

Recruitment is based on what he calls “an insurance proposition”, rather than simply back office or call centre work, and Indian staff are encouraged to work towards internationally recognised industry accreditation.

The company has already introduced secondment to the UK for ambitious staff.

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