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A Brief History of Call Center Pull-backs from India

British energy major Powergen has decided to move back its call center operations from an outsourced facility located at Gurgaon, India, back to the U.K. This comes close on the heels of American computer manufacturer, Apple Computer’s decision to shut down its three-month old support operations in India.

Both the developments in such a short span is a shot in the arm for the anti-offshoring groups who maintain that the quality of customer service is poor in offshore centers like India. Powergen has explicitly attributed the shift back home to the poor quality of customer service. “Although the cost of overseas outsourcing can be low, we’re simply not prepared to achieve savings at the risk or expense of customer satisfaction,” said Nick Horler, MD, Powergen.

Apple’s reason was, of course, different. In any case, it had started just three months back. That is too short a time to assess the quality of work. According to media reports, the real reason behind Apple’s pullback was that it realized India has become an expensive proposition. A source close to the decision, while agreeing with that reasoning, offered further explanation. According to him, Apple wanted to work on support and development on Apple computer products. But, India is by and large, a “Windows” country and finding people who are already familiar with Mac is difficult and costlier. So is training them from scratch. This made the Apple propositions especially expensive.

There are two other fairly large pull-backs from India that have not received much media attention. Both are, incidentally, in the retail segment. One is the termination of call center contract by the U.K.-based retailer, ShopDirect, with Indian BPO service provider, ICICI Onesource, announced in January 2004. The Indian vendor was providing services to ShopDirect’s customers from its Bangalore center since March 2002. The other was the decision by the U.S retailer of toys and baby products, Toys ‘R’ Us to stop offshoring its call center being operated by Convergys from its Gurgaon, India-based facility.

Both these processes had to move back because of internal re-structuring by the companies.

In late 2005, there were media reports about British bank Abbey planning to pull-back its call center jobs from India, however, the company denied the move.

While there has been media splash about Dell, Axa, and Lehman Brothers moving jobs back to the U.S., all of them have turned out to be minor adjustments. Dell has since then more than doubled its India support staff, while AXA has also ramped up significantly. Both the companies, however, had moved a few jobs back. Lehman, which pulled back some helpdesk jobs from Indian provider, Wipro BPO, since then, has opened a captive center in Mumbai, India.

Most other contract terminations, which have often been reported as pull-back from India, have, in reality, been changes in outsourcing relationships within India. Delta Airlines, which was using U.S-based Sykes as one of the service providers in India reversed the deal with the latter, but the jobs got consolidated with two other vendors, IBM Daksh and a Wipro BPO. The media reports, though, had termed these as pull-backs from India.

AOL, which has a captive operation in India, was also working with Wipro BPO and Sitel India in India. When it decided to consolidate its center at Wipro, it was projected as a “back-from-India” story. In reality, it was a change in outsourcing vendor. And interestingly, in a rare instance of such change, about 100 people were moved from Sitel India to Wipro BPO.

Similarly, HP’s change in offshore vendors has often been projected as a case of scaling down offshore centers, which in reality, is just the opposite.

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