Asia-Pacific

India

BPO: Chronicling an Indian Revolution

Indian employees of a call center work during their night shift. Bangalore is best known to people outside of India as the place where customer calls from around the world are routed. (Photo: STR / AFP-Getty Images)

"If you are looking for a career which is challenging and gives you the opportunity to sharpen your business skills and work directly with clients in the U.S. and U.K. then Brickwork is the place for you …"

"Here is your Remote Executive Assistant, an intelligent graduate operating from our India Knowledge Center. Instructions given to them at the end of your working day will be processed when you are asleep. When you wake up, you will find the completed work in your mailbox. Your assistant can handle all your back office work, spreadsheet analysis, Power Point presentations, and more. He/she can help you keep pace with what you want to read …"

The two quotes above, posted on the Web site of a leading Bangalore-based Knowledge Process Outsourcing (KPO) firm, Brickwork, carry far different meanings in India and the U.S.

While in the former country they could represent a golden opportunity for a student in Bangalore to fund his engineering degree, in the latter it could be the means for an American CEO to make time for his nagging wife.

Business Process Outsourcing (BPO), which essentially connotes the leveraging of technology or vital processes of a company, may have cut costs and jobs in the U.S. but in India it has fashioned contemporary lifestyles and economic growth in a manner sharply distinct from any previous phenomena.

"With the global outsourcing market growing at a breakneck speed, India offers some benefits," states Vivek Kulkarni, former I.T. secretary of Karnataka and founder of Brickwork on his company Web site, B2kcorp.com.

"India 's intellectual capital" tops Kulkarni's list of reasons for India being a sought-after BPO destination, and also forms the bedrock of his own company.

MBAs from the Indian Institutes of management, engineers and technicians from premier schools like the Indian Institutes of Technology, and even PhDs with Indian names and faces can be seen and researched on the company's Web site just like on an interactive marriage portal. The nuptials here are between Indian talent and enterprise and U.S. companies hoping to cut costs by finding a partner offshore.

This trend, which has translated itself into more jobs and easy money in India and lesser jobs and cost-cutting in the U.S., is a little over 20 years old.

Thomas Friedman in his book "The World is Flat" traces the demand for Indian talent in the U.S. to the "dot-com bubble" of the early 1990s. After the bubble burst, venture capitalists in the U.S. scouted globally for innovative companies with the most cost effective and high quality investments to do their vital back-office work. This led many firms to think, "I better start outsourcing as many functions as I can from the beginning, as I have to make money for my investors as fast as possible," Friedman wrote.

While this scrambling went on in the U.S., India stood to gain — its position on the global outsourcing map became clearer as it could now use the vast network of unused fiber optic cables laid down during the dot-com era to link with its clients in the U.S. Friedman calls these the "digital rail roads" established by the U.S. which India rode on for free.

According to his book, in 1985 Texas Instruments was the first American multinational firm to establish a circuit design and development center in India. Vivek Paul, the president of software company Wipro has been quoted as calling GE one of the first companies to come to India to source software.

Medical transcription, deemed a forerunner of the BPO revolution in India, made inroads in 1994 after then-finance minister Manmohan Singh decided to open the Indian economy to foreign investment.

The "Y2K bug" that surfaced at the turn of the twentieth century also helped to speed up the process.

"Y2K should be a national holiday in India," said Friedman, to emphasize the role it played in making India America's favorite outsourcing haunt. "The faith that the crisis instilled in the U.S. companies for Indian technical talent led to this mad rush for Indian brainpower to get the programming work done. … The Indian companies were good and cheap but price wasn't on the customers' minds; getting the work done was … and India is one of the few places where you can find a surplus of English-speaking engineers at any price." Thus BPO relations went up another notch.

The industry has grown ever since. A 2005 PricewaterhouseCoopers survey put the size of the Indian BPO industry at $5.7 billion, employing over 245,100 people and predicted another 94,500 jobs for the financial year 2005-2006.

So who is affected by this "BPO revolution?" Twenty-two year old V. Shreeram certainly is. A software engineer who found himself "bored to death" after his degree, he spent three months at Brickwork as the remote executive research assistant to an academician in the U.S.

"It was a fun job," he said. "I simply had to do easy tasks like Google-searching material for his thesis and mail it to him, for which I was given adequate notice. The rest of the time was spent chatting up friends online."

But Shreeram had soon had enough: "I was fed up and so were most of my engineer colleagues who had taken the job while preparing for MBA entrance examinations to earn side money and kill time."

However, Brickwork employees that Friedman met were in it for a different reason. "They gave all or parts of their salary to their parents, and most of them have starting salaries that are higher than their parents' retiring salaries," he noted.

Pukhraj Chowdhry, another former call center employee now pursuing a journalism diploma at the Asian college of Journalism, Chennai, questions Friedman's sample set.

"I know so many people from my call center who do it only to live a grand life. Most of them are heavily into drugs, even hard ones like cocaine," he said.

These conflicting viewpoints on the trends among young BPO employees are hardly a concern for outsourcing companies, who are busily focusing their energies on combating the high attrition rates among employees.

While many like Shreeram may quit to pursue further studies, Pukhraj's friends might just go to a competitor for better money. Their call center stints may be over for now but their lives play out before our eyes on the television, with soap operas and commercials set up in call centers. This is gradually turning the "call-center boom" into a part of our collective sociological psyche that constantly changes with the trends in the industry.

"Call center? That is so 2004" read a headline in Business Today, dated July 28.

The article reported that Indian call center employees were fed up with talking to "rude American clients" and as India's top companies get more sophisticated at taking over outsourced work from U.S. and European multinationals, they're finding that the lowest end of the business — call centers — just don't pay anymore.

The Indian BPO companies complain in the article that their U.S. clients continue to "ratchet down prices" that inevitably brings their quality of service down. This has led to outsourcing powerhouses in India to shun such work, according to the article, quoting National Association of Software and Services Companies (NASSCOM) figures which show that call centers declined from 85 percent of the total back-office business in 2000 to 35 percent today.

The reason for the shift is to attain greater profits. Genpact chief executive Pramod Bhasin was quoted as saying, "We tell our clients, 'Don't start with call centers — if you do, do it together with something else.' "

The industry may have its ups and downs, but one thing is certain — Indians sitting in Bangalore will continue to run back-offices for companies in Oregon between buffet meals of rice and sambhar, at least for the forseeable future.

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