The growing pains of India’s Call Centre Industry.

By Editor Niels Kjellerup March 12, 2004


Every week I get dozens of Emails challenging the views I put forward in my article ‘Myth & Reality of Contact Centres in India’ from February 2001.

The growth and ‘success’ of the Indian Call Centre Industry in the past 3 years deserves to be examined and discussed.

The strength of the offering from India comes down to two main points –

  1. Cost savings on call centre payroll &
  2. A highly educated labour pool.

In the past 3 years India has overcome its infrastructural problems and has successfully ensured that the weak electricity & telephone grids have been supplanted by highly reliable local solutions to offset the inherent infrastructure problems in India.

The weaknesses are primarily:

  1. Near total lack of Customer Service culture in India. My view today, as in 2001, is that until India has Call Centres servicing it’s own growing affluent middleclass in the home market, it will be a struggle and a growing cost to actually train people to understand the service culture of the US, Europe or Australia.
  2. Lack of Call Centre Managers with experience & a vision of how a good Call Centre should be operating.
  3. The language barrier of speaking English or American with a clearly distinguishable Indian accent.


The current situation:

Applauded by Wall Street ( as a symbol of the ‘any cost cutting is good’ crowd) large corporations hurried to embrace the idea of outsourcing the customer contact to cheaper locations of which India is dominant. This meant that the really bad management practices in operating Call Centres in the US or the UK, which I have labelled the ‘The Galley Slave Call Factory’, was exported to India and adopted as World Class Call Centre Practise – so what we see mostly in India is bad Customer Service delivered cheaply. Large Call Factories run as sweatshops with intelligent people being treated like cattle and with NO input into how to improve. Call Centre Managers with little or no previous experience, adopting the Idiotic Vendor Measures of ‘how many calls’ and ‘how short’ resulting in implementing the worst of both worlds.

The backlash is reverberating all over the world – average staff turnover 60% p.a, even higher numbers for experienced managers. This makes training and educating staff very expensive indeed, if you loose them within 6 months of the investment.

Bad Call Centre Management practises are characteristic by ignoring the customer side of the equation, i.e. ‘What was the outcome of the call’& ‘was the customer satisfied with the outcome’, and since Indian outsourcers are not paid for such niceties it goes unnoticed. However back home the corporation is now facing an ever increasing number of customer complaints and dissatisfaction is growing.

Some corporations like GE Capital, Dell, American Express and Citibank have already repatriated the most sensitive of their customer service activities in the sudden realisation that customer service is not about phone calls, but about creating future revenue streams and retaining customers. Suddenly their own Idiotic Vendor Measures used to judge their customer service centres are highlighting the idiocy of using Call Centres to keep customers at arms length as cheaply as possible. Maybe the radical, old fashioned idea, that customer service is an integral part of future revenue creation, is coming back in fashion?


The future Call Centre Industry in India:

The outsourcer must realise that the Call Factory concept has a very limited lifespan and the clients who were so eager to outsource to India, did so because they were operating poor to bad service centres at home and adopting their management practices for Call Centres in India might not have been a good idea. In fact successful outsourcers in the West are successful because they find ways to Add Value to the calls by documenting how a satisfied customer increases future revenue and profit.

Soon machines can handle calls as good or better and cheaper than human robots. It’s the intelligence and willingness of service representatives to actually understand the customer and exceed the customer’s expectation, which makes the call valuable to the company.

Outsourcing customer interaction has the inherent weakness that it wrongly assumes customers are either in 1.complaint mode. 2. help- me mode or 3. I-want-to buy mode; in fact customers shift between these modes depending on the reception they get and in most outsourced Call Centres buying signals are lost along with the revenue stream.



Those corporations running the worst Call Centres at home were the first to shift operations to India and insist that the Indian outsourcer adopt their bad management practices, so called Idiotic Vendor Measures.

The high staff and management turnover now being experienced in the India Call Centre Industry is significantly minimizing the projected cost savings and the customer backlash is forcing corporations to reconsider and in growing numbers repatriate customer service.

The Indian Call Centre Industry will continue to grow provided it realises that its clients need help in understanding how the customer service is an essential part of the revenue creating process and by adopting the quality management principles currently being implemented by successful contact centres.


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