...neutralise strong mother tongue influences.
Even after training agents, companies have also had to deal with high levels of attrition as employees jumped to more lucrative jobs in India's thriving economy.
Infrastructure and tax advantages
At the level of incentives from government, business outsourcers in India can see the tax advantages and infrastructure for night-based call centre work in the Philippines, and contrast those advantages with the transfer-tax battles and the gradual winding down of tax benefits in India. "Companies have had to take one of two directions: set up overseas or move away from voice work," says PV Kannan, co-founder and CEO of contact centre company 24/7Customer.
For companies such as 24/7 Customer, the choice has been clear. It set up its first call centre in India in 2000. Today, it has 4,500 employees in the Philippines compared with 3,000 in India.
More than half the company's revenues are derived from the Philippines. "Our strategy was to diversify geographically and have an alternate presence in a place that is seen as a more natural fit, spoken-English-wise and culturally, with our US customers," Kannan says.
But to put this issue in perspective, call centres are only one part of India's back-office industry. Hordes of Indian medical transcriptionists, legal assistants, tax accountants, web designers and technical support executives are delivering 24/7 non-voice services to foreign companies. These services are more lucrative and, overall, India still rules the business process outsourcing (BPO) industry.
India's move to higher-margin work
Some see India's transition from voice-based work to the higher-margin, back-office work as a natural progression. "India has grown and evolved as a preferred destination to handle more high-end and complex BPO processes," says Rohit Kapoor, CEO of New York-based outsourcer EXL Service.
EXL set up its first centre in India in 2000 and it has now more than 11,000 employees in India. Its Philippines centre became operational in 2008 and now has 800 employees.
Over the past three to four years, Indian outsourcers have engaged in deeper customer relationships, sought larger investments, and engaged in end-to-end offerings rather than handling individual processes, says Nasscom's Bhatnagar. He describes the trend as the reengineering and transformation of Indian BPOs.
EXL's Kapoor adds India's strength in other areas of BPO is unlikely to wane, despite the decline in voice-based call centres: "India remains a key BPO destination with the focus now on adding more intelligent and analytical work to client servicing."
Nasscom's Bhatnagar meanwhile sees the outsourcing opportunity as only limited by clients' imagination: "It is not a finite cake and certainly not doomsday for Indian BPOs."
Saritha Rai is an India-based journalist and commentator who covers technology, business and society from her ringside seat in Bangalore.