Till four months back, 29-year-old Ethel Graff worked as a travel manager with an international law firm in Paris drawing about $3,000 a month. A travel professional for the last nine years, Graff knew the job better than the back of her hand. Spare time and weekends were spent travelling, doing inland skating and exercising at the gym. What she does today is no different. Except that three months back, much to the shock and surprise of her friends, she packed her bags and flew down to Delhi - her first visit to India.
Stian Johansen (Norway), Kati koivukangas (Finland) and Ethel Graff (Germany) are part of Tecnovate eSolutions' 30-member European team in Delhi. They work on travel processes for customers in 11 Europeon countries. Tecnovate plans to increase the size of its Europeon team to 100 be December 2003
Graff is not here on a travel break - she is on a one-year work visa to slog at the Okhla, Delhi-based BPO firm Tecnovate eSolutions for under 25% of her European salary. The salary does not bother her. She says: "The cost of living is lower in India. I responded to an online ad and and here I am.'' Tecnovate is a subsidiary of the London-headquartered online travel agency ebookers Plc.
The arrival of Graff and 29 other Europeans (French, German, Finnish, Norwegian, Swedish, Dutch, Swiss and Irish nationals) at Tecnovate's BPO centre has given a new dimension to the evolution of the Indian BPO industry. So far, US and European companies outsourced only English language BPO work to India. In the last 12-24 months, when Indian BPO firms got non-English business, they set up centres in that geography and hired natives to cater to the business. For instance, MsourcE, has set up a centre in Mexico to deliver Spanish work, Progeon will soon be going live in the Czech Republic and HCL Technologies BPO Services already has centres in Ireland and Malaysia from where it services nine languages. While Tecnovate with its European and Indian team offers work in French, German, Swedish, Finnish, Nowegian, Swiss besides English.
In rare instances, BPO firms even hired Indians proficient in a foreign language to cater to the work from India. For instance, Daksh eServices has 80 German-speaking Indians who do non-English work. But the Tecnovate experiment - hiring foreigners to work in India on Indian wages - has been the most distinct. If this trend intensifies, India could well be looking to bite into the $65-billion European BPO market by 2005.
But what brings the Europeans to India? While Graff, who knows English, French, German and Dutch, insists she's here for the challenge of working in the unfamiliar emerging market, others come because now work experience in India matters. Kati Koivukangas, a telesales consultant, says: "I was working as a hotel receptionist in Helsinki. The experience here will add to my CV." That has attracted other Europeans as well. As BPO professionals, they serve their own people from India and also get to travel in the country. They expect the experience to pay off as India is emerging as a global BPO hub. That they are interested is evident from the fact that ebookers received 100 applications for five positions when it advertised for jobs in India in Scandinavian papers.
Ask Stian Johansen, 27, team leader, who landed from Oslo a fortnight back. He still can't get used to the number of people he sees on the roads (he studied at Lillehammer in Norway which has just 20,000 people!). Johansen is, perhaps, the first Norwegian to get a work permit to India. For, when he applied for one, the Indian mission didn't have any forms as no one from Norway had made a request for a work visa.
As Johansen settles down for his stint here, others are already planning to request for extension of their work permits. Johansen and Graff's more experienced colleague (India experience, that is) Koivunkangas, 26, joined Tecnovate in January and is already thinking of extending the work visa by a year.
If more like her do so, Tecnovate's experiment will succeed. Tecnovate's parent ebookers operates in 11 European countries. At least 75% of its $800 million revenues come from the English market. It even has a BPO facility in Ireland where it can easily offer multi-lingual skills. So why did it fly people to India to offer services to European clients?
For one, Ireland is three times more expensive than India. The Irish centre employs 60 people. In comparison, the Okhla office has 650 people, including the 30 Europeans. Tecnovate evaluated this business model late last year before inviting Europeans to work here.
That the model has worked well can be gauged from the fact that Tecnovate plans to take its European strength up to 100 by December 2003. The foreign staff in India costs Tecnovate under 25% of the European wages. It says that compensation is at par with other Indian workers and there is no such thing as a hardship allowance. To top it all, Tecnovate's attrition rate is just 15% compared to the industry average of 35%. The model is important on three counts.
To begin with, Prashant Sahni, CEO, Tecnovate, says you can train French- or German-speaking professionals in India to do the work, but they just don't match up on skills that can get additional bookings. He says: "When a person is aware of the subtle difference between a Hyatt and an Orient Mandarin, he is able to deliver better. The Europeans know this as they have grown up that way.'' To top it all, Europeans have a significant rub-off on Indians working with them as it helps the Indians hone their skills in the foreign language.
Destination knowledge is another area where foreign professionals score naturally. What is the difference between Madrid and Barcelona? While going to either place, what should the tourist look for? Nothing like having a homegrown person handling the work. Also, car hire is big business in Europe and fumbling with differences between a coupe and a sports car could well mean loss of a client.
Finally, let's come to the advantage of entry cost. BPO companies spend a few months and Rs 25,000-35,000 on training each employee on countries, time zones, people, habits and culture. Here again, a European would be more at home with Octoberfest or a carnival. Is it held in Bonn or in Cologne? Actually, the latter. But an agent messing up on such basics could lose customers. "That can be critical in an industry where conversion rates (percentage of deals closed) are very, very low. Ours is 25% up from 17% a year back,'' says Sahni.
So what the company saves in training, it spends in giving the only extra - a company-provided accommodation. Tecnovate rents out apartments in the upmarket New Friends Colony for their stay. Another expense is the cost of the flight bill to Delhi. The company would not reveal how much it spends on this but says that since it is in the travel trade, getting discounts is no problem.
Tecnovate gains in another way. Foreign professionals are able to leverage their knowledge of their countries to do more bookings than their Indian counterparts, directly affecting revenues. The company expects to save over $2 million in the next quarter for the parent from this. For travel work, knowledge of native culture helps. But would it make sense to have locals fly in to do banking, insurance and healthcare BPO work?
The company emphasises that while people can be trained on processes, there are always things that natives know better or are more familiar with. For instance, while an investment professional has to know the numbers well, the volume of trades that happen in a European or US business might be appreciated better by a native rather than someone who has exposure to only Indian markets. That's one reason why a lot of high-end work in banking, financial services and insurance and other domains is yet to come to India. Pawan Sharma, vice-president (international sales), HCL Technologies BPO Services, believes: "Such a trend will increase as India matures into a services backoffice country.'' Sahni adds: "It is an endorsement of what India as a country is. Food is not a problem, caretakers speak English, bottled water is available and infrastructure is improving. Who could think of Europeans working at entry- to mid-level positions in India?''
So Sahni is losing no time in expanding the non-English work in India. Graff, a project manager, has four people from India in her team who speak French. Another will be joining from France next month. Graff will also oversee the company's Dutch business, for which the company will recruit Dutch professionals in November. Her team checks the booking status, does quality control, checks validity of fares, travel insurance, invoicing and validates tickets issued in France. Similarly, Koivunkangas has six people in her team, all from Finland. They do online bookings, email inquiries, take phone calls and MIS work. By December, she will have five more Finnish agents.
Where the model could pay for companies is in niche businesses (small centres) and also where foreign language professionals are a must. For the latter, the company could hire Indians who speak the language and fly down a couple of natives - say, from Spain, Germany or France - to help polish skills and provide cultural insights.
But ICICI OneSource's managing director and CEO Ananda Mukerji cautions: "You can take it to 100 people. But beyond that, creating scale will be tough. Companies will have to look at, say, Mauritius for French work. Also, from a client perspective, it makes more sense to spread out in different places rather than concentrate everything at one place.'' That could be the Achilles heel - is it possible to have a 400-seat centre catering to European languages with natives working out of India?
Sahni has no ready answers, since the model has worked well so far. Word of mouth has helped Tecnovate tap European talent for the Delhi office. Its target of hiring 100 Europeans is really no problem. But to derisk, Tecnovate might well have to look elsewhere, particularly since it is eyeing third-party work. Nonetheless, it remains to be seen whether the trend of foreigners working at entry- to mid-level jobs catches on.
No language barriers
Last winter, online bookstore Amazon asked Daksh eServices if it could offer German language work for its European customers. Daksh took a while before it hired its first German-speaking professional. Last month, the company increased the strength of German language experts to 80. French is next. By end-2003, it expects to have 150-200 non-English professionals.
BPO outfits have so far preferred to hire Indians who have learned European languages. "They come at a 25% wage premium to their English-speaking counterparts,'' says Aniruddha Limaye, vice-president (corporate HR and training), Daksh eServices. On the other hand, the Bangalore-based MsourcE has set up a $1-million facility in Mexico with 50 Spanish-speaking professionals. Now it wants to offer Mandarin, Cantonese and European languages. At home firms are cautious because finding and retaining talent is difficult. The Chennai-based OfficeTiger took two months to recruit a 10-person German-speaking team. They execute finance- and document-related functions for European clients. Progeon has 15 Indians doing French and German work.
Pawan Sharma, vice-president (international sales), HCL Technologies BPO Services, says that about 60,000 Indians learn German and French every year. This pool can be tapped to deliver language skills. But Milind Godbole, vice-president, MsourcE, insists that spoken fluency required in voice work is difficult to attain and requires nurturing each employee. It's early to zero in on the right model. As Indian BPO firms mature, clients will soon be calling for non-English skills. So will it be smooth sailing?
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