Call Center India: Global Challengers

Twenty years ago, it would have seemed laughable to suggest that anywhere could challenge the global dominance of India in offshore outsourcing. The nation was one of the first to have an outsourcing industry of any real scale and had many years' head-start on its competition. Indeed, many would consider India as the place where the modern outsourcing industry was created. The first offshore call centers were almost all captive operations. “Run by major multinational brands such as GE, business processes were offshored, but not outsourced, with staff employed directly in contact centers that were owned or controlled by the parent company,” says Ralf Ellspermann, CEO of PITON-Global, an award-winning call center outsourcing provider.  As local staff gained more experience, they soon recognized they could create a market for smaller businesses that wanted to outsource to third-party providers but did not have the resources to manage their own call centers in India.

More than twenty years since the first third-party providers started, outsourcing has become a major global business worth an estimated US$250 billion a year. Call centers in India have been able to capitalize on this, becoming major players and, in some places, synonymous with ‘outsourcing’ itself. The sector in India now forms a major part of the economy and attracts the support of a government keen to ensure its continued success: in a country of 1.4 billion people, outsourcing makes a significant contribution to the national wealth and, collectively, it is one of the world's largest employers. The sector, however, has seen changes from the early days of providing fairly generalized call center services, and providers now offer an exceptional degree of specialization. India has become particularly associated with IT and software development outsourcing, possibly a result of the high standards of technical education in the country.

“A consequence of this specialization is that India's outsourcing dominance is facing some challenges from other nearshore and offshore destinations. It remains to be the world's largest IT and BPO destination. The sheer scale of the country helps with that. And its head-start meant that there was an advantage, both of incumbency and experience, that anywhere else would take some time to match,” says Ellspermann. But there are signs that the industry's growth may have limits within the country. One such limit is the nation's infrastructure. While urban centers are well-connected, much of the country still has poor connectivity, and many call centers in India are struggling to expand because the necessary infrastructure is simply not in place. A similar problem is finding qualified staff; despite the vast population, call center agents tend to come from the urban-dwelling and educated classes, who form a small portion of the largely rural population. This, along with the continued growth of the global BPO market, has provided an opportunity for other countries to assert their positions.

Many of these come from nations that have traditionally low labor costs, enabling them to match the savings that made India an early leader. “One example is the Philippines. The Philippine outsourcing sector has grown rapidly, largely following a similar model to India, with government support encouraging a mix of third-party contact center outsourcing providers and captive operators to set up office in the country. Even India's largest and leading BPO providers now have operations in the Philippines and employ well over 100,000 Filipinos,” explains Ellspermann.  The country has a distinct language advantage because of its historical links with the US. Call center agents frequently have neutral accents. And while the Philippines' overall BPO sector may still be behind India, it has been the world leader for call center outsourcing for more than a decade. Call centers in India may still be the first thought of many when it comes to offshore outsourcing, but places like the Philippines are starting to change that.

-Brand Desk Content