BPO's next hot-spot: The IRM Information Technology's call centre at Jalandhar has virtually no attrition

THE TIER II PROS AND CONS

UPSIDE » Lower operating costs » Abundance of workforce » Low rates of attrition

DOWNSIDE » Poor telecom infrastructure » Ralatively poor workforce talent » Potential client discomfort with location

At first glance, Supportscape's building in the heart of the pink city does not seem like a call centre. There is no chain of Qualis' lining the entrance screaming 'call-centre here.' The building itself is a humble three-storey stack of brick and mortar, without attitude, as are the 150-odd people working here, in an ambience which is typical of a non-metro-easy and relaxed. A bunch of youngsters on the first floor of the building is providing e-mail based support services to a large ISP in Europe, while the phone lines are busy in the basement where a team of 30-odd people is working on debt collection on behalf of New-York based Tritium Card Services. The client, I am told, is more than happy with the collections, which are being managed at an operational cost that is at least a third lower than that of BPO cities like Gurgaon, Bangalore and Noida. "We knew we were betting on the right city. Now, with GE here, our stand is vindicated," says a beaming Manuj Goyal, the co-founder and managing director of Supportscape.

A gemologist by training and vocation, Goyal may have been led to Jaipur by affinity for his birthplace, but that cannot be said for GE Capital International Services or GECIS (pronounced jekis), the arm which provides outsourcing services for GE. GECOS zeroed in on the city earlier this year after going through a shortlist of 20 cities across the country. The first reason that the company cites for choosing Jaipur is manpower (Rajasthan produces over 50,000 graduates annually), the most crucial resource for any outsourcing job, and accounting for the largest opex. Additionally, the city is easily accessible from Delhi (about 270 kilometres), has good infrastructure and a supportive government-all of which contribute to providing a cost advantage.

The 200-strong team in Jaipur makes up just about 2 per cent of the gecis workforce, which is concentrated in Gurgaon (6,000 people) and Hyderabad (4,000 people), though there are about 800 people in Bangalore too. "We plan to ramp up our workforce in Jaipur to 1,500 in the next two-to-three years," says Ashok Tyagi, Business Leader at GECIS. "We are looking at Cochin and Kolkata as additional cities, but are also considering locations outside India."

"We knew we were betting on the right city. Now, with GE here, our stand is vindicated." Manuj Goyal, Co-founder & MD, Supportscape India, Jaipur

Although the lower operating costs in these cities is alluring enough, there is a neat bundle to be saved in the capex too. Says the Executive Director of telemarketing firm Manipal Informatics, Gautam Pai: "If we were to replicate our Manipal facilities in Bangalore, the cost would be twice as much if not more." With housing facilities on offer for its agents, the company has willy-nilly created the country's first call-centre campus.

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The call centre training agencies are also making a beeline for these Tier II cities where the next crop of BPO agents, less demanding and more flexible, are coming up. Courtesy the trainers, companies like the Jalandhar-based IRM Information Technology, which runs an outbound call centre marketing credit cards to US, do not need to invest in the basic training of agents, who are more than willing to spend their own time and money to be eligible for what is considered an elite and well-paying job. With limited white-collared job options (read air-conditioned offices without field work) in these cities, it is the crème-de-la crème of the graduates that choose call centre as a profession. "The agents that we get here are better than those we get in Delhi. And there is no attrition since we are the only call-centre here," says IRM's managing director Rajendra Garg. Its clients, which include AT&T, Mastercard, Time Resorts and Cingular Wireless, are location neutral, as long as you can deliver, he adds.

Rakhra Tech's 50-seat centre provides a whole gamut of back-office processing Harinder Pal Singh (L) and Rajvinder Singh, Managers (Operation), Rakhra Technologies, Patiala

Many of these one-city BPO companies are in the process of expanding into four-digit strong teams and are struggling to deal with the avalanche of resumes coming down on them, as also the "requests" to accommodate the sons, daughters, nephews, and nieces of the powers that be. The starting salaries-Rs 5,000 to 7,000-which are lapped up here would be scoffed at in the larger cities.

Even in the US, there have been instances of call centres moving to locations that are less expensive to set up and maintain and where the quality of life of the agents is better. In outbound calling, the one sure-shot formula for survival is cost-cutting, which, on the scale that it is required, can only be served up by virgin cities. While a US regulation prohibiting telemarketing calls to those who have signed up for the "do not call" list is expected to hit this business, there are grey areas in the regulation that the telemarketers hope will see them through. No one is pushing the panic button just yet, besides which demand is still coming in from Europe and Australia.

There is, however, a dark lining to what is largely a silver cloud. The one crucial resource which these Tier II cities offer-low cost, non-attrition prone, English speaking manpower-is partly vitiated by the lack of another crucial resource-telecom infrastructure. Jalandhar's IRM, for example, which employed over 100 agents working in two shifts some months ago, has had to cut back due to technical problems with telecom links, which are also more expensive in the distant cities. "We have recently shifted to internet telephony and feel that it will be a viable unit soon," says Garg.

Manipal Informatics: The company set up this call centre in Manipal at half the price it cost in Bangalore

At Patiala, where Rakhra Technologies is running a 50-seat centre providing the whole gamut of back-office processing to the promoter's chain of gas stations and convenience stores in US under Bulk Petroleum Corporation, the telecom infrastructure costs twice as much as neighbouring Chandigarh. Nevertheless, the company is investing in real estate to set up a 1,000-seat centre since the professed objective of the exercise is to provide employment to the educated elite of the city. "Whether anyone believes me or not, generating employment was my primary reason for choosing Patiala. I can't deny though that outsourcing does cut my costs," says the US-based promoter and founder Darshan Dhaliwal.

These problems notwithstanding, the smaller cities are set to capture a larger slice of the $1 billion (Rs 4,600 crore) BPO pie. With clients becoming increasingly location-neutral and captive outsourcing units growing in popularity, expect to see more and more non-conventional cities coming into the fold of those who roll their R's and twist their T's.

additional reporting by Venkatesha Babu