Year 2001-2002 saw the industry acquire a decent level of maturity, with most players taking business seriously and firming up their business plans. They have also learnt from last year’s mistakes. According to VOICE&DATA estimates, total revenue during the FY 2001-02 was Rs 950 crore as against Rs 390 crore in 2000-01, a growth of 143.5 percent. Nearly 70 percent of the revenues of most of the big contact centers came from their top three clients.

2001-02 Highlights

The industry grew by 144 percent Connectivity became a non-issue in FY 2001-02, with setting up telecom infrastructure becoming easier than before Convergys and Teleperformance, the world leaders in contact center business, entered in India Conseco acquired eXL Services for $52.6 million. Wipro invested Rs 48 crore in Spectramind

Investors’ confidence in the contact center business increased. Wipro took 17 percent stake in Spectramind for Rs 48 crore. Most of this funding is to be used for setting up a 900-seat call center in Mumbai. Conseco, a US-based insurance processing company, acquired a Noida-based contact center, exlService, for approximately $52.6 million.

At the end of the year 2001-02, there were about 20,708 people working as customer services representatives, with the total number of live seats going up to 9,960. This is across about 35 contact centers, including the captive ones. The rate per seat per hour during the year ranged somewhere between $12-18, where the rate for voice services hovered around $12-18, while per seat per hour rates for Web/e-mail stood at $10-14.

Another good news of the year was the companies venturing into the UK market, traditionally shy of outsourcing. To ensure ease of operations, Internet and IPLC connectivity on same LAN has been permitted, provided the call center ensures that there is no diversion of voice or data traffic to third parties.

Future Outlook

The process of Indian companies entering into JV with foreign contact center companies will intensify and at least six JVs are expected  BPO is going to attract most attention next year  Training and HR development will become a major challenge and is likely to move out of the industry More international contact centers would relocate their operations owing to continued recession and September 11 More and more contact centers will go for certifications like COPC

Some More Cheers
Connectivity and poor telecom infrastructure and regulatory hurdles became non-issues in 2001-02. Telecom networks, both in terms of availability and reliability, became more robust. VSNL’s announcement of slashing bandwidth tariff also raised some hope for call center service providers, as this would mean an increased saving in terms of telecom costs, meaning that the business would become more viable.

Apprehensions due to accent-related problems and cultural gaps also started getting addressed, thanks to better availability of highly professional and systematic training. Software training majors NIIT and Aptech entered into the contact center training business.

Biggies Enter the Scene
Convergys, a US-based company which employs 44,000 people across 30 countries, commenced its operation in India, further concretizing India’s position as a favorable outsourced contact center destination. Convergys India Services
is a 100 percent wholly-owned subsidiary of Convergys. It has a capacity of 1,900 seats. Similarly, Teleperformance, a US-based company, another contact center giant, with 20,000 staff in more than 30 countries, also set up its shop in India.

Rush for Certification
There was a growing trend towards certification. This was because of two main reasons. First, it makes easier for foreign clients to take a decision. Second, it allows the call center company to leapfrog.

COPC was the most sought after certifications. Only a few have managed to get those, though many applied. Some, like CustomerAsset managed to pass the COPC baseline audit and were commended by the certifying authority for their achievements. Transworks (March 2001), Talisma (August 2001), Spectramind (October 2001), Vcustomer (January 2001), and Daksa (March 2002), are some of the players who initiated the process of getting certified from COPC.

Indian Software Giants Enter
Software majors like TCS, Satyam, and Wipro, could not resist themselves and made an entry into the contact center services business in the fiscal 2001-02. Some entered through partnership while others entered on their own. These companies, by virtue of certain advantages like their existing international clientele could become potential players in the coming year. Their existing relationships could work to their advantage. These companies can also boast of ample expertise in human resource management and team building. Progeon, a subsidiary of Infosys Technologies, also commenced its operations. The company will offer business process management (BPM) services to organizations that wish to outsource their business processes.

Future Outlook
BPO is going to attract most attention next year. The industry will see further consolidation and the entry of more international players is a big possibility. Apart from customer services processes, more diverse processes will be outsourced to India. With the efficacy of the India-based offshore model being proven, the capacity and the operational seats are also set to increase. Marketing still remains the top concern of all companies. Over capacity also remained an issue with most call centers working well under total capacity. The process of companies getting into a joint venture with the US service providers will accelerate. In the next six months, VOICE&DATA believes that at least half a dozen such JVs will come up. That could well be an intermediate step in the consolidation process of the industry. The contact center services business will grow out of the shadows of the IT industry and become an independent entity.

Sudesh Prasad