The economics of Call center business in India - The way forward on Cloud

India, has seen tremendous progress in the last decade and continues the same trend even in these turbulent times of global economy. This has impacted a lot of domestic industries including the Domestic BPO market. Though, the domestic BPO market has been growing at a healthy pace in the past few years ( As shown in the graph - Courtesy NASSCOM ),it has seen turbulent times due to various market factors. Some worth highlighting are:

 

• Cost of Agents - which sky rocketed with the international call center outsourcing peaking in the last few years. Domestic BPO's had to pay on par to retain talented employees.With the rupee going down like a rolling stone, International outsourcing centers are laughing their way to good margins and also giving good hikes to their employees. 
• Real Estate costs - with the economic boom in the first decade of the millennium, Rents / Property costs in Metros & Tier-1 cities have gone up like crazy.
• Agent Transportation costs - Travel arrangements have hit the margins of BPO's and also the transportation costs. Traffic Jams, roads, long distances to travel - every aspect of a city adds its cost.
• Attrition - High rates of attrition due to too much competition and high living costs forcing agents to change for higher salary jobs.

Domestic BPO's have to fight their way out of these problems or the local outsourcing market will go flat sooner than later. It has now turned into a phase where - " You Adapt or Die "

The immediate option which every one thinks of is to move to the less costlier cities to run the Voice market. Lets take a look at the key challenges you will face if you move in this direction:

1. Infrastructure - It could be leased lines for your office, power supply or basic real estate. Finding the right infra & a sustainable one in these tier-2 cities might be a challenge.
2. Skilled talent -  You will find local talent for hire, who can speak local languages but if you are looking for English speaking population like in the metro, it might be a challenge.
3. Resource Pool - Unlike a metro, where you will find a large set of resources ( people) with the relevant qualifications, Smaller cities means that you have limited pool of resources. So for expansion plans, you will have to open more centers.

Way Forward:

Imagine you running 20 centers across India and have to get 20 separate reports to track these centers.We at Cloud Agent, have understood these problems a long time back and that is why we have built a multi-tenant , multi location call center product. Now, you can get the reports, tracking etc in a centralized admin. Also, the other centers will act as a backup for the existing center and also increase agent utilization & productivity.

Moving to smaller Tier-3 cities, will help businesses which need - local language support for its customers, regional knowledge of places like a travel company or website, reduce cost of call to customers by giving local numbers or an SBN(Single Board Number) number.

The major advantages of adapting this strategy as observed from the trends in last 1 year : 

1) Get an agent at as low as Rs.4000 per month where as in urban areas you end up paying Rs.10000 to Rs.12000 at the minimum

2) Real Estate cost sky dives to almost 20% of cost in a metro

3) Even if you do not find the resource pool in 1 city, it does not matter. Cloud Agent can route calls to agents in any town/center within the same language group or skill group.

4) Very Low attrition - Employees are happy in their home town and doing a white collar job. With very little competition head hunting in the same location , your risk of attrition is very low.

Using the Cloud, BPO's can leverage the advantages of a multi tenant solution and cater to a larger segment of customers, at a lower cost and at the same quality. Thus, bringing a larger change to the social structure of our country and economy.