Why Santander & New Call Telecom came back to Blighty
The cheapest option will never be a route to success
Published 11:55, 18 July 11
As India teeters on the brink of double-digit inflation, Santander and New Call Telecom announce that they are bringing operations back to the UK. While this job creation is excellent news for the people of Burnley, Liverpool, Leicester and Glasgow, Indian outsourcing suppliers are facing some major issues.
With a population of over 1.2 billion people, and poor supply chain infrastructure, there will always be strains on supply of food and fuel. There is constant excess demand putting pressure on prices.
Indian has suffered with chronically high inflation before. In previous periods of double digit inflation - and there have been 9 of them in the last 50-odd years - drought has been to blame.
This time, sky-rocketing international commodity prices are the culprit, a situation that the Indian Minister of Finance can do nothing about, so it would seem that, whatever tweaks are made to India’s monetary policy, high inflation will be around for a while yet. Of those nine recent instances of double-digit inflation, five of them lasted over 12 months. one of them lasted two and a half years!
Indian salaries are expected to rise 13% over the next year, meaning India can no longer position itself as a low-cost provider of BPO. New Call Telecom’s decision to backshore to Burnley - which isn’t actually an outsourcing issue, because that call centre was owned and run by New Call themselves - is based, in part, on the fact that wages in depressed areas of the UK are already on a par with those for equivalent roles in India.
But New Call's return to the UK is not just a matter of rising costs, but falling quality. This has been the key motivator for Santander, which had been quite content to outsource its contact centres to India since 2003. Now though, in the face of 165,000 complaints about its banking services in the latter half of 2010, it has decided that backshoring is the answer.
So why the sudden drop in Indian call-handling proficiency? Good call centre operatives open calls sympathetically, drill down to the heart of the problem, then find solutions.
Complex problems require the operative to have a solid understanding of the caller’s culture. Santander’s return to the UK proves this- their customers’ feedback stated that they “prefer to deal with call centres in the UK, where staff could understand them better as individuals and know where they are coming from."
It’s not about accents or language barriers; cultural affinity is a must for successful offshoring. We at the NOA have been saying that for years! Taking the cheapest option will never be a route to success, if the quality is not up to the mark.
India’s current economic traumas are a conspicuous contributor to the quality drop: because of the price pressures - particularly on food - people move jobs very quickly, for just a few rupees more elsewhere. India’s staff attrition rates are astronomical right now - in voice-based call centres, currently around 25%-35%. This means there is no time for adequate cultural awareness training - a huge problem for those buying outsourced business services.
As the costs of doing business in India fall into line with more developed nations, I suggest that companies considering outsourcing call centres to India ensure that their suppliers invest (and continue to invest) in intensive programmes of cultural awareness training. That way, Indian providers can retain business by competing on quality, not just on cost.