SOME accents simply do not lie. Even the gremlins on the line could not conceal that the person at the other end was Indian. It was a cold call and he was trying to flog the latest phone from T-Mobile.

Speaking to an Indian call centre agent is a daily occurrence in most UK homes. Whether you need information about your bank balance or travel booking, the chances are that your enquiry will be answered by a call centre in India. Even if you don?t need anything, it is more than probable that you will receive a call from an Indian telemarketing agent ? the 21st century version of the door-to-door salesman.

This state of affairs is hardly surprising in the world of Business Process Outsourcing (BPO) where firms turn over many back-office functions to outside vendors. Activities are expanding far beyond call centres and software solutions to payroll processing, bank loan assessments, financial advice and, it is planned, biotech research, engineering design and more.

Over the past two years, British firms have outsourced around 50,000 jobs to India. Another 200,000 are expected to go by 2008. The reason is that India has a large, well-educated, English-speaking workforce whose wages are a fraction of those in Britain. Its attitude towards the industry is also different. Earning five times more than an average civil servant, the Indian agent sees a career in the call centre business. British operators usually consider the job as a stopgap, which explains the 70% staff turnover.

?We have transformed a low paid, low prestige job into a highly paid, high prestige one by taking it abroad. We live in a global society and it?s normal for businesses to hunt down the best price as long as quality is good,? explains Richard Coppell, chairman of Oceans Connect, a British call centre company, which has relocated to India.

The way the world is today

This logic is unpopular as it means more job losses. The call centre industry in the UK is substantial, employing 867 000 people (3.1 per cent of the workforce) in about 4,300 centres. Unions are calling for state intervention to limit offshoring. The government has replied by launching a sector study into the global challenges facing the industry but the writing is on the wall. Tony Blair has already warned that outsourcing abroad merely reflects ?the way the world is today?.

Outsourcing to India may be the flavour of the moment but it is not to everyone?s taste. Some big companies have decided not to run the risk of putting their customers on the line in Bangalore or Jaipur.

?Safe handling of our customers data is vital. Offshoring would add a risk, which we would not be prepared to take. And our customers prefer British-based call-centres, so we see no reason in going offshore,? says Richard Pym, chief executive of financial giant Alliance & Leicester.

These companies are partly motivated by the experiences of some multinationals in India. Capital One, the credit card group, scrapped a contract with Wipro Spectramind, one of India?s largest call centre operators, after some agents had been offering unauthorised credit to customers. Investment bank Lehman Brothers and computer manufacturer Dell also ended contracts to offshore helpdesk operations. There have also been reports that criminal gangs are trying to bribe lower-paid employees in call centres in India to help them commit fraud against customers.

Despite the unions? outcry about job losses and the executives singing the praises of outsourcing, the British call centre industry is still thriving. The Call Centre Association expects an annual growth of 5 per cent over the foreseeable future. A report from Cushman & Wakefield Healey & Baker, a leading firm of property consultants, said there was ?no need to panic? over employment prospects. It said jobs were being created in outbound call centres to balance out those lost at inbound ones, and that the advantages of relocating to India were being eroded.

Need for a change in strategy

Even the jobs lost may be a good thing. Research by consultants McKinsey claims that the country losing the jobs wins most of the economic benefits and that the job drain is a ?win-win? for the global economy.

?We can?t argue liberalisation abroad and practice protectionism at home. The long-term benefits are greater for consumers and jobs. Our exports to India exceed £ 2.5 billion. As India grows, so will this trade,? says Patricia Hewitt, state secretary for Trade and Industry.

The optimism has been hit by HSBC?s 2004 Regional Focus Report. It warns that the industry?s expansionary phase is coming to an end unless it changes its strategy: ?The challenge for UK call centres will be to move upmarket by offering more sophisticated contact services. The service sector will need to learn the hard lesson taken on board by manufacturers ? if you can?t do it cheaper then do it smarter.?

BPO pursues its worldwide growth. Forrester Research believes the market will inflate to $146 billion in 2008. Executives cited human resources, customer service procurement and accounting as the most likely processes for outsourcing. Spending on services such as call centres and on-line computer helpdesks is expected to rise to more than $40 billion this year. And it should more than double in the next four years.

According to research by Gartner Inc, one in four high technology jobs in developed countries may be outsourced to emerging markets by 2010. India remains ?the undisputed offshore leader? with China and Russia emerging as strong contenders and other countries eyeing the potential offshore IT services.

Despite being an outsourcing giant, India boasts of barely 800,000 jobs in the IT sector and the aggregate turnover is less than two per cent of the global number. Mauritius can therefore keep its cyberisland dreams alive. With the right marketing, the desperately empty offices of the Ebene Cybertower could be filled. This would surely spare the blushes of cabinet ministers who, two years ago, were boasting that the cybertower was already full. They were guilty of poor quality spin but could still be rescued by the magic of BPO.

by Ryan Coopamah

Outlook correspondent in London

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