JULY 6, 2004

Technology Takeaway

It has improved the bottom line for multinationals and has fueled a boom in one of the world’s fastest-growing economies. Yet the outsourcing of call centre jobs to India is set to become an Australian election issue

ERIC ELLIS, Gurgaon

Dolly doesn't like Mondays.

But it isn’t that universal worker’s ailment of “Monday-itis” which afflicts the Indian telephonist as she struggles through the dreaded first work day of the week at the job that’s funding her through law school in New Delhi.

Dolly’s distress could more accurately be described as “Sunday-itis” for, even though her office is in a sleek tower plonked on a baking plain 30km south of the Indian capital, where it’s Monday, she’s working in a time zone nine to 12 hours behind her, where it’s still Sunday night in Middle American Everytowns such as Peoria, Illinois.

In the early morning India-time shift she’s working, Dolly, 24, has found that Americans vent about weekend credit card transactions that go wrong just as she settles into her booth and headset at the Convergys call centre in Gurgaon, the town that’s making excellent claims to be the tele-service capital of the world. And when those grumpy American card-holders make their free phone calls, it’s messengers such as Dolly in India who incur their wrath. “Sometimes I ask myself why do I put myself through this,” she says. “I feel like a Mexican.”

The reason why Dolly and thousands like her in Gurgaon, Bangalore and other bustling towns across India do this job is, of course, money. Dolly’s $US300 ($435) monthly salary is six to seven times India’s average, a multiple that’s turning one of the world’s poorest and most populous nations into a technological and consumer powerhouse.

For multinationals such as Microsoft, Cisco Systems, Visa, American Express and, increasingly, Australian companies such as Telstra, those same salaries enable them to cut back-office costs by 50% to 80%.But there’s another factor at play at Convergys and its competitors that delights those same multinationals, while spooking governments in Washington, London and Canberra anxious to keep unemployment at bay, keep their economies ticking over and their re-election chances buoyant.

Convergys opened its Gurgaon call centre in October, 2001. Today 4000 people – average age 24 – work across its six floors, and the firm adds 200 to 300 a month as it gathers more clients. “We have a policy of only hiring university graduates,” says Convergys’ Gurgaon head, Jaswinder Ghumman, 32. “Finding qualified staff isn’t a problem in India.”

Put another way, that’s 200 to 300 jobs that need to be replaced in places such as Omaha, Nebraska, the midwest city once known as the freephone capital of the US. Or in the medium-sized cities of Wales and Scotland, where British companies have sited call centres. Or in politically sensitive cities such as Albury-Wodonga or Bathurst, as Australian companies ponder the cost-effective trend. Hence, the alarm bells on both sides of politics as the federal election looms.

Convergys and its competitors are known as “non-captive business process outsourcing centres”. The grandaddy of Gurgaon’s BPOs is General Electric’s original facility. Where non-captive Convergys is a mercenary seeking as many clients as it can, GE Capital’s centre is a “captive” facility: it services its own customers. It opened in the mid-1990s when the net, telecom discounting, deregulation and a consumer boom combined to shift back offices offshore.

With its English-language heritage, tech-obsessed India was an obvious destination and a stampede followed GE.Convergys workers operate in clusters and get conditioned in cultural and corporate specifics. Beyond accents, they are trained to recognise and respond to the nuances that might be typical of, say, an African-American from Alabama, a New Yorker, perhaps even a Queenslander. Technology helps to pinpoint a caller’s provenance. “Training is a big part of a business and we can get very local if required,” says Ghumman. The trainers can be nationals of a particular country or, if need be, a region, or an Indian who has lived abroad.”

Ghumman says his clients are split between American and British but, with training, his personnel could easily turn to Spanish or even Swedish. Australian customers, with their cricket obsession and shared Anglo experience, seem a doddle for most educated Indians.

Another difference to a western workforce is that, for many young Indians, firms such as Convergys are deemed to be cool, aspirational places to work, and not just because they are a modern, air-conditioned escape from Gurgaon’s 40°C heat. It’s partly money, partly the cachet of technology, partly the international contact. A national culture has sprung up around “Gurgaon Man”, with newspaper articles lovingly describing this “New Indian” phenomenon. Basically, these articles describe a yuppy.

Ritnik Chakraborty, 22, moved from West Bengal to land a job in Gurgaon. It’s his second day and he’s disappointed to learn I’m Australian and thus can’t test his American-ness. Ritnik honed his accent – pure Californian – at a call centre in Calcutta, where his job was to coldcall Americans over Sprint phones. For college graduate Ritnik, Gurgaon is a step up in money – the lure of $US400 per month after six months if it goes well – and cachet.

It’s not just call centres that are booming around Gurgaon. Ashish Gupta, 34, runs Evalueserve, a company that’s part market research facility, part investment bank and part legal firm. Via broadband internet and cheap phone lines, a typical Evalueserve job would be to gather market information for a foreign client eager to evaluate the prospects for a new product in, say, the Czech Republic, or to buy a company in New Zealand.

Evalueserve’s researchers – and Gupta says they have worked in 200 countries and can access 65 languages – gather, sort, edit and package material. “We charge a 10th of the price of a patent lawyer in San Francisco or Sydney,” says the ex-McKinsey staffer.

India’s emergence as the poster child of globalisation is all the more remarkable considering it has evolved, until recently, during the six-year administration of the nationalist populism of the Bharatiya Janata Party, which was voted into office in 1998 on a platform stressing Hindutva, or “Hinduness”.

Gurgaon has become one of India’s richest places. New apartment towers with names such as Belgravia touting “It Doesn’t Get Better Than This” stud its dusty plains, next to the futuristic office towers adjoining shanty dwellings. The outsourcing has brought with it a property boom. The average price of an apartment is $250,000 to $300,000.

At times, Gurgaon seems like globalisation on amphetamines. At street level, it’s chaotic India, all heat, dust, traffic jams and cows ambling down the road. But the cars vying for space on the Delhi-Jaipur road are late-model German and Japanese marques, pulling into huge shopping malls that seem as if they’ve been transported from Singapore.

In those teeming malls, in pizza parlours and in Starbucks knock-offs where India’s mallrats gather, wielding the latest mobile and clad not in dhotis or saris but Tommy Hilfiger and Calvin Klein, there’s the accents: American and trained into a flat mid-western drawl by employers such as Convergys. Yet the closest most of them, like Dolly, have been to the US is the Nike store in Gurgaon’s hip Metropolitan mall. The future, says Ghumman, seems limitless.

Clearly there are jobs that cannot be transferred to places such as India but Convergys is doing well operating in what the industry describes as Tier 1, basic call centre inquiries. Ghumman does some complex Tier 2 work, which requires extra specialisation (and costs more) but doesn’t see any major obstacles to expanding his roster to highly specialised Tier 3 and above.

So-called “IT-enabled” services have been a huge earner for India and one reason why India’s foreign exchange reserves have leapt from $11bn in 1994 to $110bn. That economic muscle – and its development of an atomic bomb – has India knocking on the door for permanent UN Security Council status.

The industry today employs 700,000 Indians; it will reach 4 million in four years. If that seems like a lot, consider that India has a labour pool of 500 million.

John Howard and Mark Latham need to be concerned.