There today_ here tomorrow

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					Lost in translation: The move to hang up on the
Indian call centres
By Robert Colville

India today, Britain tomorrow. Powergen‟s plan to pull the plug on the Indian call

centre, relocating 1000 jobs back to the UK, has prompted speculation over whether

corporate cost cutting decisions in outsourcing jobs abroad has done such companies

more harm than good.

Once coined as a simple cost cutting exercise by British multi nationals, now deemed

a call centre catastrophe by the frustrated entourage of customers on the receiving end.

Does the corporate dream that cashes in on the allure of cheap overseas labour, really

have a future?

An extensive survey into consumer attitudes of outsourcing published by Amicus and

consumer analysts, Performance House, signalled that the weight of opinion has gone

against off shoring companies, heralding stark future implications for both retaining

and attracting new customers. An overwhelming 87% thought that companies, which

service primarily UK customers, should support jobs in the UK, 54% of whom

believed that the level of service has declined, while only 26% said they were happy

to use foreign call centres.

Powergen‟s u-turn tactic is hoped to counter mounting frustration felt by customers,

under the impression that the service to which they subscribed has been compromised

in the provider‟s bid to cut costs by cutting corners. The energy supplier‟s decision to

repatriate jobs back to Britons has boldly gone against the grain of the steady tide of
British and American companies eager to cash in on the Eastern promise of cheap


While the cheaper labour costs of outsourcing could successfully boost a company‟s

profitability, making it an increasingly attractive venture for current and would be

shareholders, the proliferating band of dissatisfied customers could potentially spell

long term losses in declining subscriptions if customers decide to vote with their


“Although the cost of overseas outsourcing can be low, we're simply not prepared to

achieve savings at the risk or expense of customer satisfaction," Powergen managing

director Nick Horler said.

A report outlining potential security risks in outsourcing by the Financial Standards

Authority (FSA), concluding that: “There is no evidence to suggest consumer data is

at greater risk in India than in the UK”, has been eclipsed by sceptisicm from

customers. A common sense of mistrust prevailed in the survey with an astonishing

85% of respondents expressing a strong concern of the protection of confidential data

with off shore facilities.

“This is a hammer blow for UK based companies that think they can get away with

outsourcing service jobs out of the UK and use the cost savings to pump up their

profits,” remarked Roger Lyons, Amicus Joint General Secretary.
Outsourcing abroad provides mixed benefits for the consumer and the company alike.

Subsequently, the customer can enjoy support 24 hours-a-day while the company can

reduce operating costs by between 37 to 55 per cent. Alas, customers lost in

translation often perceive the move has reaped more financial benefits to the

organisation, to the detriment to the level of service they receive. “Generally, the

process is weighted in favour of the organisation,” admitted Paul Weald, Managing

Director of RXPerience, an independent consultancy which advises on call centres,

based near Windsor.

“Customers who have had a bad experience as a result of outsourcing have suffered

because of poor company management,” said Weald. “As a general rule, companies

can outsource simple enquiries, while routing the more complicated calls to the UK

based call centres”, he said, “Companies must start the process of outsourcing by

making it as easy on their customers as possible”.

From having to spell Cornwall to an Indian call centre agent calling himself „Steve‟,

to waiting „on hold‟ for ten minutes only to be greeted with “I‟m sorry ma‟am, I

cannot help, I‟ll put you through to another department,” Lydia Twedell was

transferred twelve times before deciding to hang up. All in a single call to Talk Talk ,

her less than satisfactory experience fell short of her expectations, and left her feeling


The low cost telephone company, owned by the Carphone Warehouse has seen its

reputation slide in recent months, largely on the back of poor customer service from

India. “I don't care where or who answers my call as long as they can understand what

I say and can do something to help me which no one at that call centre could,” said

In contrast, the success of the National Rail Enquiries indicates outsourcing can work

if implemented properly. Britain‟s busiest hotline, receiving up to 150,000 enquiries

daily, has two call centres in India and two in the UK. Despite the initial backlash

over the decision to outsource call centre jobs abroad, provoked three years ago, a

spokesman insisted that the levels of complaints from both sides of the operation,

remained the same.

While offshoring can be successful, Wheald admited British companies still have a

long way to go. A number of banks are now priding themselves on the fact that their

call centres are UK based, in the hope of picking up disgruntled customers from their

competitiors. Nationwide is one such example. “Overseas call centres are not the

right option for Nationwide”, said Phillip Williamson, Chief Executive at Nationwide.

Despite the bad experiences felt by customers on the receiving end, speculation over

whether Britain‟s call centre job market is being eroded in favour of employing cheap

overseas workers can be dismissed as sensationalist hype. Britain is enjoying its

continued call centre job boom while India‟s has only just begun.

The Call Centre Association (CCA) estimated that 30,000 call centre agents currently

represent British companies in India, while 700,000 posts still remain in the UK. The

Office of National Statistics (ONS), predicts that Britain will be home to the millionth

call centre job by 2010, according to consecutive annual growth of 8.8%, over the

past four years. The call centre industry is indeed Britain‟s fastest growing sector,

expanding by nearly three times the national average of 3.2%.

The continued demand for outsourcing has fuelled India‟s exploding call centre job

market over the past 3 years, increasing by 300%. The fact that 3 million English
speakers graduate in India each year, makes it an attrative option for British and

American outsourcing companies alike, and the country‟s burgeoning band of call

centre agents is projected to increase to 300,000 by 2010.

“The vast majority of call centre jobs are UK based,” said Anne Merie – Forsyth,

CAA Chief Executive. “Most people are under a misapprehension that all call centre

work is going to India, because of the cold calls they receive from India”.

Powergen may have broken convention in its u-turn tactic to bring jobs back to the

UK, but it certainly is not alone. Kwik-Fit‟s decision to bring back jobs to the UK

after off shoring to India further reflects the sentiment that quality of customer service

is far more important than cutting costs. Alan Brown, operations director at Kwik-Fit

said, as a result of choosing the wrong kind of process to offshore, the performance of

the Indian operation did not even come close to the service offered by the UK call

centre. It was believed that the main reason for its offshore failure was choosing to

migrate a service focused heavily on outgoing calls to customers, rather than dealing

with incoming queries.

Savings from offshoring nonetheless, have been enjoyed by a spectrum of industries,

ranging from banks to telecoms, from IT services to utilities providers. Aviva is

thought to employ up to 7,000 Indian staff by 2007, HSBC,4,500 and Lloyds TSB,


Paradoxically, British jobs originally lost to India are returning, but with Indian

owned companies. ICICI OneSource, a Mumbai-based outsourcing company, has

emerged as India‟s fastest growing BPO and has plan to build a new 1,000-person call

centre in Belfast. This multinational which employs 9,000 agents, currently has its
operations in India, UK, US, Argentina & Philippines and has now turned its attention

towards Ireland for its highly skilled workforce and good geographical location.

“Indian outsourcing providers are starting to think about the UK market from a

western perspective”, said Martin Hart, chairman of the National Outsourcing

Association (NOA). “Companies are no longer in the solely onshore or offshore

mindset – they are open to using a blend of sourcing options to achieve the best


While figures suggest outsourcing abroad has had not too much of an adverse effect

on the British job market, it has been met by overwhelming scepticism by consumers

on the receiving end. But as consumer preference has, and always will, dictate in any

competitive market, company bosses will have to ask themselves whether the cost

cutting drive in outsourcing is really worth the risk.