Hello, India? I need help with my math


Posted: Thursday, Nov 08, 2007 at 0000 hrs IST
Updated: Thursday, Nov 08, 2007 at 0216 hrs IST


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: Adrianne Yamaki, a management consultant in New York, travels constantly and logs 80-hour workweeks. So to eke out more time for herself, she routinely farms out the administrative chores—making travel arrangements, restaurant reservations and buying theatre tickets—to a personal assistant service, in India.

Kenneth Tham, a high school sophomore in Arcadia, California, strives to improve his grades and scores on standardised tests. Most afternoons, he is tutored remotely by an instructor speaking to him on a headset while he sits at his personal computer going over lessons on the screen. The tutor is in India. The Bangalore butler is the latest development in offshore outsourcing.

The first wave of slicing up services work and sending it abroad has been all about business operations. Computer programming, call centres, product design and back-office jobs like accounting and billing have to some degree migrated abroad, mainly to India. The Internet, of course, makes it possible, while lower wages in developing nations make outsourcing attractive to corporate America.

The second wave, according to some entrepreneurs, venture capitalists and offshoring veterans, will be the globalisation of consumer services. People like Yamaki and Tham, they predict, are the early customers in a market that will one day include millions of households in the US and other nations.

They foresee an array of potential services beyond tutoring and personal assistance like health and nutrition coaching, personal tax and legal advice, help with hobbies and cooking, learning new languages and skills and more. Such services, they say, will be offered for affordable monthly fee or piecework rates.

“Consumer services delivered globally should be a huge market,” observed KP Balaraj, MD of the Indian arm of Sequoia Capital, a venture capital firm in Silicon Valley.

But globalisation of consumer services faces daunting challenges, both economic and cultural. Offshore outsourcing for big business thrived partly because the jobs were often multimillion-dollar contracts and the work was repetitive. In economic terms, there were economies of scale so that the most efficient Indian offshore specialists could become multibillion-dollar companies like Infosys, TCS and Wipro.

It is not all clear that similar economies of scale can be achieved in the consumer market, where the customers are individual households and services must be priced in tens or hundreds of dollars.

Then there are the matters of language, accent and cultural nuance that promise to hamper the communication and understanding needed to deliver personal services. Already, some American consumers voice frustrations in dealing with customer-service call centres in India. At the least, the spread of remotely delivered personal services will be a real test of globalisation at the grassroots level.

Even optimists acknowledge the obstacles. In a report this year, Evalueserve, a research firm, predicted that “person-to-person offshoring,” both consumer services and services for small businesses, would grow rapidly, to more than $2 billion by 2015. Yet consumer services, in particular, are in a “nascent phase,” said Alok Aggarwal, chairman of Evalueserve.

Veterans of the business offshoring boom predict an emerging market, but most are not investing. Nandan M Nilekani, co-chairman of Infosys, said that there is “definitely an opportunity in the globalisation of consumer services,” and he listed several possibilities, even psychological counselling and religious confessionals. But, he added in an e-mail message, “This is just ‘blue sky’ thinking! We have no business interest at this point in this direction.”

What the offshore consumer services industry needs, it seems, is a solid success story.

A leading candidate to watch, according to analysts, is TutorVista, a tutoring service founded two years ago by Krishnan Ganesh, a 45-year-old Indian entrepreneur and a pioneer of offshore call centres.

TutorVista also stands out for its well-known venture backers, its scale and its ambition. The two-year-old company has raised more than $15 million from investors including Sequoia, Lightspeed Venture Partners and Silicon Valley Bank. “Our vision is to be part of the monthly budget of 1 million families,” Ganesh said.

It is a long-term goal. To date, TutorVista has signed up 10,000 subscribers in the US, and its British service, rolled out in September, has 1,000.

Last year, Ernest Tham, a truck driver, noticed a reference to TutorVista on a web site and suggested his son give it a try. “Kenneth was apprehensive at first, and I wasn't sure how it would work,” Tham said. “But, shocking to say, it's gone very well.”

Kenneth said he initially found it “very unusual, not seeing another person. You get used to it, though. It's not a problem.” He schedules one or two sessions nearly every day, mainly for English and Chemistry. With a digital pen and palette, he writes sentences and grammar exercises, for example, and his work appears on his computer screen and on the screen of his tutor. They discuss the lessons using Internet-telephone headsets.

“You can also get help with homework problems,” Kenneth said, “but they're not supposed to do all your home- work.” In a year with the service, Kenneth has improved his grades, his father said.

NY Times / Steve Lohr

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