British firms cash in on India's outsourcing edge

British firms cash in on India's outsourcing edge
London | December 12, 2005 9:15:05 AM IST

Roger Smith now gets his banking queries answered in distant India. But he is not complaining. Nor are a growing number of British firms outsourcing jobs to India and other countries.

It was not long ago when Smith's calls to his bank would always be answered by an official of the branch a few blocks down his residence in central London. Today, more often than not, his calls travel thousands of miles to reach India where youngsters work round the clock to answer customer queries over Internet-enabled phones.

The location of the contact centre makes no big difference, says Smith, as long as the financial details are secure and the queries are answered quickly.

The lure of saving money has resulted in more and more British financial services companies like HSBC, Lloyds TSB, Barclays and Norwich Union shifting jobs to offshore locations.

Most of these jobs are increasingly finding their way to Indian cities like Bangalore, Hyderabad and New Delhi where young English-speaking graduate are available in abundance at a sharply lower cost.

"The off-shoring of work to India meets two key criteria - firstly, its low cost," Ian Thompson, director (group operational services) of Britain's banking major Lloyds TSB, told IANS. "Secondly, the quality of work is very high and this has helped us provide the level of service that is consistent with our brand."

Lloyds has transferred some 2,000 jobs to India since commencing operations with a couple of hundreds three years ago. Its mortgage services arm at Cheltenham and Gloucester will next year shift 300 more jobs.

"The service our Indian partners provide is as good as our Britain operations. In some areas it is better. If you look at our customer satisfaction level, that is much higher," said Thompson.

Agrees Hayley Stimpson, director (external affairs) of financial services major Aviva Plc: "We monitor service on a monthly basis and customer feedback shows that our Indian operations are operating to at least the same high standards as Britain.

"This has therefore enabled us to achieve our objective of providing high levels of service while improving our efficiency."

Aviva unveiled its offshore strategy in July 2003 to improve efficiency and rein in high operational cost. The company has created 4,100 jobs in India since then.

Stimpson said Aviva would create a further 800 back office roles in India in the near future as part of its plans to have 7,800 jobs there by the end of 2007. The company will unveil an additional centre in Chennai next year.

The off-shoring boom in the West has helped India's outsourcing firms to collectively earn $5.2 billion through exports of services in the fiscal year ended March 31, 2005.

Global corporations like Siemens, HSBC, American Express, Barclays and British Airways ship jobs to one of the world's fastest growing economies to save costs.

The total annual cost of a call centre agent in Britain is 37,034 pounds. This includes expenses on infrastructure and human resources. For a similar centre in India the annual cost per agent is 10,776 pounds.

"India can claim to be a favoured destination for financial services due to the emphasis placed on it by Western banking investors," said Peter Ryan, an off-shoring analyst with London-based market research firm Datamonitor.

"Indian agents have shown an affinity for this industry, and the commitment of the government to luring contact centre work through infrastructure investment cannot be ignored either," he added.