India seeks to become the world’s back-office

Rosemary Arackaparambil in Bombay

The chattering youngsters, many dressed in Western-style casual clothes, alighting at a train station in a northern Bombay suburb appear headed for a college campus.

But it is late at night, and they are making their way to a nearby plush office complex.

There, in a huge brightly painted “shopfloor” whose walls and pillars are adorned with colorful posters, they settle down behind computers, pull on headphones and spend several hours speaking English with an American accent.

These 18 to 26-year-olds working for eFunds Corp unit E-Funds International (India) handle direct tele-marketing calls from customers halfway around the globe for US-based call center operator West TeleServices.

They are part of an emerging workforce for India’s latest export offering—IT-enabled services.

These include tele-marketing, helpdesk support, medical transcription, back-office accounting, payroll management, maintaining legal databases, insurance claim and credit card processing, animation, and higher-end engineering design—all of which can be delivered by phones, computers and the Internet. India is aiming to become “the world’s back-office.”

A McKinsey study has estimated e-enabled services could be worth over half a trillion US dollars globally by 2008.

“I think there is no better or more promising area for India. It plays to India’s sweet spot,” Pramod Bhasin, president of GE Capital Services India, which runs the country’s largest such enterprise, said at a recent venture capital seminar in Bombay.

GE Capital’s 10,000 strong manpower offers accounting, claims processing and credit evaluation services to 80 branches of General Electric Co around the world.

Countries like Australia, New Zealand, Ireland, Canada and the Philippines have long provided call center services but India, with its cheaper, skilled, English-speaking and IT-savvy workforce is fast becoming attractive.

The National Association of Software and Services Companies (Nasscom) has forecast India’s revenues from IT-enabled services to rise more than 20 times to Rs 810 billion ($16.94 billion) by 2008 from Rs 40 billion last year.

Industry officials say Indian companies can offer these services 30-40 percent cheaper than their competitors.

Calling more
Some 208 IT-enabled service companies are currently registered with Nasscom, but there are many more.

“The biggest opportunity in IT-enabled services in India is call centers,” said Johnathan Everett, managing director of venture capital firm The View Group, which manages $40 million.
“India is currently barely scratching the surface.”

Call center services can extend to emotional help, as Bangalore IT-firm Phoenix Global Solutions plans to do. It has hired 50 people for a pilot project to counsel troubled American people.

Nasscom estimates that about 68,000 people are employed in the Indian IT-enabled services industry but forecasts this could rise to 1.1 million by 2008.

With starting monthly salaries of 8,000-10,000 rupees, the opportunities are good for many of India’s job-seeking graduates.
Several foreign firms like HSBC, Standard Chartered Bank, American Express and British Airways are setting up back-office processing centers in India.

Indian IT firms like Wipro, HCL Technologies, Mphasis BFL and private telecoms group Bharti Enterprises are among a few that have announced plans to expand their services offerings to the IT-enabled business.

“The main reason we decided to do this is because it is a different set of services for the same set of customers,” said Ramesh Enami, chief technology officer of Wipro Technologies.

— Reuters