Is it finally time to hang-up on Indian call centres?

Is it finally time to hang-up on Indian call centres?

Whichever way you look at it, it's been a difficult few weeks for the Indian off-shoring industry. Two weeks ago the utility company Powergen said it was closing its Indian call centre, blaming the decision on the fact that it had had a negative effect on customer service.

Earlier this week, a worker at HSBC's Bangalore call centre was arrested after he was caught allegedly supplying personal details to fraudsters who went on to steal £230,000 from 16 UK customers.

Over the last five years a large number of high-profile organisations - particularly in the finance and telecoms sectors - have opted to move call centres, and other parts of the operation, abroad. They are rewarded with savings of between 37% and 55% in operating costs but, in many cases, customers have complained about poor service. A number of media reports concerning theft of data have only further fuelled uncertainty in the public consciousness.

With absenteeism and staff turnover in India now approaching levels in the UK, many companies are starting to ask whether the savings are worth it. Particularly when they see rivals promoting the fact they remain in the UK - and picking up customers on the back of it.

So will other firms be following Powergen's lead? Some certainly will, according to Mike Harvard, managing director of CM-Insight, an independent consultancy which advises companies on call centre management. "Lots of companies that have, until now, been waxing.....continued below

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lyrical about the cost savings, are starting to ask about the impact of moving operations to India.

"Last year, Kwik-Fit Insurance very publicly said it was pulling out, preferring to keep call-handling in the UK and I can see others following suit.

"Questions are being asked in boardrooms across the country about whether the savings are worth the potential loss of consumer confidence." He says the success, or otherwise, of the operation depends entirely on how it is managed. "Too many companies have shunted poorly-performing [call centre] operations to the subcontinent on the basis that because it costs less, it might turn a profit. In such instances, it's no surprise when it fails abroad.

"However, other operations that have invested heavily in training and designing up-to-date working practices have performed extremely well."

His message is simple - companies running poorly performing call centres in the UK will run the same abroad. Unfortunately, he declined to name names.

Despite the rash of negative headlines and lots of noise from the union Amicus - which has bitterly opposed offshoring from the start - call centre-based fraud has historically been much lower in India than at other centres around the world, including Britain.

Consumer complaints

HSBC confirmed that this week but failed to mention that frauds committed at home are rarely reported in the same way - not least because the UK banks are much better at hushing them up.

Away from the financial sector, National Rail Enquiries ran into a huge storm three years ago when it awarded its contracts to firms operating in India. At the time, the media seized on complaints from consumers who had been given the wrong information by staff unable to find places such as Alnwick.