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90 CHAPTER - III INDIAN BPO INDUSTRY: A PROFILE 3.1 INDIAN BPO SECTOR It is true that the Indian BPO sector is witnessing an unprecedented boom but the flip side of the industry cannot be ignored. For some time, the Indian BPO industry has been battling certain complex problems such as labour attrition, poor infrastructure and lack of data protection laws. The IT industry has, during the last decade, been probably the most attractive sector to work in. It has, therefore, been able to get the best talent. The challenge now is to safeguard and build on this prime position. Attractive compensation, challenging assignments, good working conditions and growth opportunities are amongst the main determinants of where talent gravitates, along with the indefinable "glamour value" of an industry or a specific company. Taking care of these parameters is a necessary task for the IT industry. Retaining talent is a major challenge for companies, especially in a growth boom, when a lot of "seduction" of employees between one company and another is common place. However, the attrition rate for the industry as whole, (i.e., people moving out of IT into other industry sectors) has been low. Even so, this will continue to be a challenge at both levels: for the individual company and the industry. The IT industry has provided an excellent physical work-environment. It needs to continue to be a leader in providing these facilities, including food, fitness and sports facilities. While these "add-ons" are not inconsequential, work satisfaction through challenging, cutting-edge assignments, and substantial growth prospects are definitely major determinants for retention. Providing these is critical, and is of particular importance in the ITES/BPO sector, where attrition rates tend to be high for just these reasons. Compensation is probably the single most important parameter in most cases. The challenge here is to provide on attractive package in the context of rising expectations, and yet minimize overall cost escalation. In this situation, "poaching" people from other companies by offering higher pay packages is self-defeating for the industry as a whole. An important corrective lies in ensuring an ever-growing and sufficiently large supply pipeline of fresh entrants.

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Page 1: CHAPTER - III INDIAN BPO INDUSTRY: A PROFILEshodhganga.inflibnet.ac.in/bitstream/10603/34958/10/10_chapter_03.pdfCHAPTER - III INDIAN BPO INDUSTRY: A PROFILE ... the attrition rate

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CHAPTER - III

INDIAN BPO INDUSTRY: A PROFILE

3.1 INDIAN BPO SECTOR

It is true that the Indian BPO sector is witnessing an unprecedented boom but

the flip side of the industry cannot be ignored. For some time, the Indian BPO

industry has been battling certain complex problems such as labour attrition, poor

infrastructure and lack of data protection laws. The IT industry has, during the last

decade, been probably the most attractive sector to work in. It has, therefore, been

able to get the best talent. The challenge now is to safeguard and build on this prime

position. Attractive compensation, challenging assignments, good working conditions

and growth opportunities are amongst the main determinants of where talent

gravitates, along with the indefinable "glamour value" of an industry or a specific

company. Taking care of these parameters is a necessary task for the IT industry.

Retaining talent is a major challenge for companies, especially in a growth

boom, when a lot of "seduction" of employees between one company and another is

common place. However, the attrition rate for the industry as whole, (i.e., people

moving out of IT into other industry sectors) has been low. Even so, this will continue

to be a challenge at both levels: for the individual company and the industry. The IT

industry has provided an excellent physical work-environment. It needs to continue to

be a leader in providing these facilities, including food, fitness and sports facilities.

While these "add-ons" are not inconsequential, work satisfaction through challenging,

cutting-edge assignments, and substantial growth prospects are definitely major

determinants for retention. Providing these is critical, and is of particular importance

in the ITES/BPO sector, where attrition rates tend to be high for just these reasons.

Compensation is probably the single most important parameter in most cases.

The challenge here is to provide on attractive package in the context of rising

expectations, and yet minimize overall cost escalation. In this situation, "poaching"

people from other companies by offering higher pay packages is self-defeating for the

industry as a whole. An important corrective lies in ensuring an ever-growing and

sufficiently large supply pipeline of fresh entrants.

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The recent past has seen an increase in the MNCs setting up BPO operations in

tier II & III cities

In today’s competitive world skilled workforce is an asset which has to be

leveraged for enhancing organization performance. There are numerous opportunity

for human asset who hamper the performance of organization by quitting for better

opportunity elsewhere not only organization has to make extra efforts to identify the

right replacement but also has to give sufficient period for the individual to perform.

The organization has to make proactive efforts to retain people .Retention is a crucial

issue pertaining to BPO firm. The study attempts to explore employee attrition and

retention strategies of BPO organization and also a comparative analysis of same.

Indian BPO industry has largely been concentrated in and around the

metropolitan areas such as NCR, Mumbai, and Bangalore etc.

Figure 1: The MNCs setting up BPO operations in tier II & III cities

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Table No. 3.1 City

Sr. No.

1

2

3

4

5

6

7

8

Source: “NASSCOM

Graph No. 3.1 Graphical Representation of City wise Distribution of

20%

24%

City wise Graphical representation of BPO componies

Table No. 3.1 City-wise Distribution of ITES – BPO Companies

City Frequency Percentage

NCR 149 19.25%

Bangalore 85 10.98%

Mumbai 72 9.30%

Hyderabad 62 8.01%

Chennai 48 6.20%

Kolkata 16 2.07%

Pune 156 20.16%

Others 186 24.03%

Total 774 100.00%

NASSCOM KPMG Study 2009”, Zinnov Research

Graph No. 3.1 Graphical Representation of City wise Distribution of

ITES – BPO Companies

19%

11%

10%

8%6%

2%

24%

City wise Graphical representation of BPO componies

NCR

Bangalore

Mumbai

Hyderabad

Chennai

Kolkata

Pune

Others

92

BPO Companies

Percentage

19.25%

10.98%

9.30%

8.01%

6.20%

2.07%

20.16%

24.03%

100.00%

Research

Graph No. 3.1 Graphical Representation of City wise Distribution of

NCR

Bangalore

Mumbai

Hyderabad

Chennai

Kolkata

Pune

Others

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Customer Source-wise Breakup of Indian BPO Industry

24%

76% International BPO

Domestic BPO

Table No. 3.2 Customer Source-wise Break of Indian BPO Industry

Source Frequency

International BPO 76%

Domestic BPO 24%

Source: “NASSCOM KPMG Study 2009”, Zinnov Research

Graph No. 3.2 Graphical Representation of Customer

Source-wise Break of Indian BPO Industry

Indian BPO Industry – A Geographical Perspective

• Indian BPO industry is mostly centered on the metropolis.

• The metropolises together house about 75 percent of the total BPO companies

of India.

– NCR – this refers to the New Delhi, Noida, Gurgaon region, which has

25 percent of the total BPO companies in India.

• However, tier II & III together has around 25

The Indian Business Process Outsourcing (BPO) sector has emerged rapidly,

and its exports have grown from $565 million in 2000 to about $7.3 billion in 2005.

These exports are projected to increase to $20 billion by 2007 and employment in the

sector is expected to rise from its current level of 300,000 to over 1.1 million by 2008

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(Chanda, 2005; NASSCOM, 2005a). There is also a clear upward trend regarding the

Knowledge Process Outsourcing (KPO) of “high-end” or “up-the-value chain” jobs.

Typical users of KPO to India are market research agencies, consulting firms,

investment banks, legal firms, pharmaceuticals, automotive companies, and corporate

planning departments. Globally, the KPO pie will reach about $25 billion by 2010,

and India should command 60 percent of its market share (Singh, 2005a). Many

analysts are questioning the sustainability of such a rapid growth of the Indian BPO

sector and fear it might burst like the dot.com bubble. A number of constraints are

already emerging. For example, by 2008 the sector will experience a shortage of

around 262,000 employees. Moreover, the BPO industry has a high turnover rate, and

employers find it difficult to retain talented employees. A number of weak players in

the business have gone bust (Business Line, 2005). Activities, such as mergers and

acquisitions, which will lead to industry consolidation, are emerging. All such

developments and trends have serious implications for the Human Resource

Management (HRM) function given that the BPO industry is primarily people-driven.

These are unique and major developments in India’s economy and, therefore, policy

makers realize that addressing labor needs and emerging human resource issues is

critical. The existing literature, however, contains few empirical studies conducted in

India that highlight the nature of human resource management (HRM) systems

relevant to the BPO sector. Herein, we provide an historical overview of the growth of

the Indian BPO sector and the need to examine the HRM systems of these companies.

A discussion of the literature in HRM on outsourcing centers, and specifically HRM

practices in India, follows. We then describe the qualitative and quantitative methods

adopted to carry out the empirical investigation in 51 Indian BPO units. Finally, we

present our results and discuss their implications for the HRM practices in the Indian

BPO industry.

3.2 MAIN FACTORS IN THE EXPLOSIVE GROWTH OF THE INDIAN BPO

INDUSTRY

The Indian BPO industry’s initial focus was on creating a strong and reliable

platform, using technology as a selling point, thus building on the success of the

Indian software industry of the late 1990s. Then it moved to the level of infrastructure

development where technology is increasingly used as a differentiator and for

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bettering the quality of service delivery. This evolution in offering quality of service

has been possible for two main reasons. First, India has what is known as “people

attractiveness.” India produces over two million English-speaking graduates every

year who are ready to work for salaries that are as much as 80 percent lower than

those paid to their Western counterparts. This availability of technical and computer-

literate human resources who can offer lower response time with efficient and

effective service makes India a magnet for multinational corporations (MNCs).

Second, India presently enjoys the advantage of “location attractiveness.” Enormous

savings are possible for foreign firms by outsourcing their processes to India because

of the availability of a relatively inexpensive but strong and established infrastructure

that offers telecom services, improved international bandwidth, technology parks, a

well-developed software industry, and an existing base of blue-chip companies

already operating there.

In addition, many Indian BPOs have successfully adopted several global

industry standards such as SEI-CMM, ISO, TQM, Six Sigma Quality, and COPC.

Furthermore, with an emphasis on a secured environment, Indian BPOs are adopting

standards such as ISO 17799, BS7799, COBIT, and ITSM. The government now

provides a more conducive regulatory environment for global corporations with

incentives like the ten-year tax holiday and rebates in custom duties. Of course, the

round-the-clock advantage for western companies due to the huge time difference

between India and United States/United Kingdom offers them a competitive

advantage over their rivals. At present,the United States and United Kingdom together

account for nearly 80 percent of the existing IT and BPO offshoring in India.

3.3 A Historical Overview of Developments in the Indian BPO Sector

The changes in the Indian economy over the last 15 years or so have been responsible

for the growth of the information technology sector and, after that, the BPO industry.

From its independence in 1947 to 1991, India adopted a “mixed economy” approach

(emphasizing both private and public enterprise) which effectively reduced

entrepreneurship and global competitiveness—both necessary for national growth.

Despite the formalities of much centralized planning for decades, the Indian economy

failed to reach its potential and, in fact, hit bottom in 1991. India experienced a

double-digit rate of inflation, decelerated industrial production, a very high ratio of

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borrowing to the GNP, and a dismally low level of foreign exchange reserves. Foreign

reserves became so low that they were barely able to meet the cost of three weeks’

imports. The Indian government pledged gold to the Bank of England to meet the

country’s foreign exchange requirements. The World Bank and the IMF agreed to bail

out India on the condition that it changed from a regulated regime to a “free market

economy.” To meet these challenges, the government announced a series of economic

policies beginning with the devaluation of the rupee, followed by new industrial,

fiscal, and trade policies.

A number of reforms were made in the public sector, and controls over the

banking sector and foreign investments were liberalized. Since these reforms, the

economy has become dynamic and vibrant, and foreign investments have accelerated

significantly. The World Bank forecasts that by 2020 India could become the world’s

fourth largest economy (Budhwar, 2001; Kapur and Ramamurti, 2001). The liberal

reforms implemented by the government set the stage for India to emerge as a

superpower in the BPO industry in the early twenty-first century. The growth of the

BPO sector was made possible by the already established information technology

sector and the availability of a large number of technically literate English speaking

Figure 2: Growth of Indian BPO Industry (2001-2006) & Customer Source-wise Breakup of Indian

BPO Industry-2006

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people in India. An analysis of the available information from secondary sources

indicates that BPO is now the fastest growing industry in India, and India is

considered the “electronic housekeeper” of the world. BPO services are typically

provided by Information Technology enabled Services (ITES). According to

NASSCOM (National Association of Software and Service Companies), there are

more than 450 Indian ITES-BPO companies (Bhatnagar, 2005). The main activities or

areas covered by the BPOs include customer care, such as remote maintenance, help

desk, and sales support; finance and administration, examples of which are data

analysis, medical transcription, insurance claims, and inventory management; and HR

and payment services including payroll, credit-card services, check processing, and

employee leasing. In addition, the BPO industry has expanded into engineering and

design, animation, market research, network consultancy and management, remote

education, and content development (i.e., digital content, LAN networks, and

application maintenance). BPO activities wherever knowledge processing is required

are all on the increase. Examples of KPO include intellectual property research, legal

and medical research, R&D, analytical services like equity research, information

security services such as risk assessment and management, bioinformatics (for

example, genome sequencing, protein modeling, and toxicology studies), and

procurement and global trade (Ramachandran and Voleti, 2004; Singh, 2005a;

Ravichandran, 2005; Christopher, 2005).

Broadly speaking the Indian BPO industry can be divided into six categories.

1. Captive Units set up by global companies that outsource their back-office

operations from India.

2. Indian Third-Party Vendors that execute transactions and processes for

international clients.

3. Joint Ventures between international BPO companies and Indian partners.

4. Indian IT Software Companies that have added BPO to their service portfolio.

5. Global BPO Players who set up call centers in India (for example, Convergys).

6. Global Consultancies (such as Accenture) who have been advising their clients

on outsourcing and are now leveraging this experience into providing actual

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BPO service (Economist Intelligence Unit, 2002). The most prevalent form of

BPOs operating in India is that of either Captive Units or the Third-Party

Vendors.

3.4 What is a Call Centre?

A Call Centre or Call Center (see spelling differences) is a centralized office

used for the purpose of receiving and transmitting a large volume of requests by

telephone.

Business Process Outsourcing (BPO) is the leveraging of technology or

specialist process vendors to provide and manage an organization’s critical and/or

non-critical enterprise processes and applications. The most common examples of

BPO are Call Centers, human resources, accounting and payroll outsourcing. Business

process outsourcing may involve the use of offshore resources.

Use of a BPO as opposed to an application service provider (ASP) usually also

means that a certain amount of risk is transferred to the company that is running the

process elements on behalf of the outsourcer, BPO includes the software, the process

management, and the people to operate the service, while a typical ASP model

includes only the provision of access to functionalities and features provided or

‘served up’ through the use of software usually via web browser to the customer.

It can be one or all of these:

1. A huge telemarketing Centre

2. A tele servicing Centre

3. A help desk, both internal and external

4. An outsourcer (also known as a service bureau) that uses its large capacity to

serve lots of companies

5. A reservation centre for airlines or hotels

6. A catalog retailer An e-tailing centre

7. An e-commerce transaction centre that doesn’t handle calls so much as

automated customer interactions

8. A fund-raising and collection organization

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9. A Call Centre is traditionally defined as a physical location where calls are

placed, or received, in high volume for the purpose of:

• Sales

• Marketing

• Telemarketing

• Customer service

• Technical support

• Specialized business activity

A Call Centre is operated by a company to administer incoming product

support or information inquiries from consumers. Outgoing calls for telemarketing,

clientele, and debt collection are also made. In addition to a Call Centre, collective

bundling of letters, faxes, and e-mails at one location is known as a contact centre.

3.5 Call Centre: A Good Option

A Call Centre is often operated through an extensive open workspace, with

work stations that include a computer, a telephone set/headset connected to a telecom

switch, and one or more supervisor stations. It can be independently operated or

networked with additional centers, often linked to a corporate computer network,

including mainframes, microcomputers and LANs. Increasingly, the voice and data

pathways into the Centre are linked through a set of new technologies called computer

telephony integration (CTI).

Most major businesses use Call Centers to interact with their customers.

Examples include utility companies, mail order catalogue firms, and customer support

for computer hardware and software. Some businesses even service internal functions

through Call Centers. Examples of the include help desks and sales support.

A Call Centre is a service centre with adequate telecom facilities, access to

internet and wide database, which provide voice-based or abroad through trained

personnel. Call Centers exist in all sectors of business including banking, utilities,

manufacturing, security market research, pharmaceuticals, catalogue sales, order desk,

customer service, technical queries (help desk), emergency dispatch, credit

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collections, food service, airline/hotel reservations, etc. The wide area of services

provided by the Call Centers makes it a lucrative career with a range of opportunities.

Traditionally, Call Centers meant only voice-based customer support. But now

most Call Centers are more of contract centers, offering e-CRM services, which

include voice-based customer support as well as e-mail response, web-based test-chat

services and other customer interaction channels. The Call Centre services can be

‘inbound’ where in calls are received from customers enquiring about a service or

product that an organization provides. The Call Centre services can be ‘outbound’

where in calls are made to customers to sell products or collect information/money.

Etc. Call Centre services can also be ‘specialized’, say in business processing where

in calls are made from one company to another company.

Some Call Centers stick to only domestic businesses dealing with customers

within the country called domestic Call Centers while others such as an International

Call Centre mainly deal with clients from abroad, say from US, Europe, etc. There is

a great scope for Call Centers in India, with a large population of educated English-

speaking people. The wide range of opportunities, comparatively well paid jobs for

the minimum qualification it requires and the facilities the companies provide like to

and fro transport, subsidized meals and medical facilities make call Centers good

option.

3.6 Call Centre Outsourcing Cost Benefits

Lower Labor Costs in Offshore Call Centre Outsourcing. In many Call Centers

in either North America or in Europe, labour costs are the largest share of operating

expenses. In India, labor costs are much lower, about 10-20 per cent of what it is in

the US. Because of this operating expenses are more evenly distributed across labor,

systems and telecom, and real estate and utilities. The savings, for some of these

companies, have been truly phenomenal going up to as much as $250 million

annually. Labour costs in India are quite low compared to the US. Someone

answering complicated financial questions on the phone in the US may expect

$40,000 a year, but in India, labour costs are a fraction of what they are overseas.

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3.7 A skilled and Abundant Work Force

Many Call Centers in America or in Europe hire high school graduates. These

employees often appear to lack commitment and motivation, as can be observed by

the high attrition rates, about 40 per cent or higher.

In India however, Call Centers hire university graduates from the enormous

pools of skilled labor (India alone produces 2 million English-speaking college

graduates and 300,000 post graduates annually). Although just some 5% of Indians

are proficient in English, in a country of more than one billion people, this still

represents a labor pool of more than 50 million people. For these employees, a Call

Centre profession is not just a temporary job, but a career they are committed to.

The types of services being offered by offshore Call Centers are increasing. At

first there was just simple transaction oriented work like back office processing. Now

however, multi nationals have observed the potential of service providers in India as

they have observed astounding success. This confidence has resulted in a larger

number of services being offered. Today, knowledge process outsourcing services,

which require high levels of expertise are also being outsourced to India.

3.8 Call Center Outsourcing-The Operational Approach

The three options are:

1. Captive Facilities

2. Third-party

3. Outsourcing joint ventures

The captive facility option provides the greatest savings and control. However,

it is often the most difficult and takes the longest. In India, GE and American Express

have led in setting up captive facilities – in part because they already had significant

presences in this country.

The third-party outsourcing option reduces the risk and time of setting up

operations-but it also reduces cost savings. Joint venture is the third option. A recent

innovative Joint Venture arrangement is Build, Operate and Transfer (BOT). Under

this model, an Indian company helps set up the Indian operations that the Joint

Venture partner has the option to eventually take over. This benefits both parties. It

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enables the foreign company to get its operations up and running quickly, while

guaranteeing a takeover option. And it gives the Indian company the references and

credibility to become an established player. BOT usage is expected to increase over

time.

The right approach for a company depends on how quickly the offshore

operation needs to be up and running, the degree of control required, the company’s

knowledge and experience in the offshore location, the financial implications and the

availability of management resources.

3.9 Call Center Outsourcing – Increasing Cost Advantages

The Call Center industry is booming in India. Leased line prices have fallen

dramatically. High bandwidth telecom links are available. Toll-free long distance

services are allowed. Foreign companies have realized that it is much cheaper

outsourcing Call Centre business to India, leveraging on its cheaper labor and IT

skills. Besides, exposure to competition is pushing more and more services and

industries to put customer service in the forefront. Manpower cost savings of

approximately 70-80 per cent. Reduced employee attrition, from 70 per cent to

approximately 25 per cent. Process re-engineering benefits. Availability of mature

vendors with the ability to ramp up on demand.

3.10 Availability of skilled manpower.

Fears have been voiced that increasing offshore facilities will affect the

sustainability of the cost advantage. In relatively saturated offshore locations like

Ireland and the Netherlands. It has taken nearly 10 years for wages to increase from

50-75 per cent of those in the US. However, such an increase will take 25-30 years in

locations such as India because of lower initial wages and large educated work force

that is constantly growing-increasing competition among the job-seekers.

3.11 Lower costs but high quality of skills

There is no correlation between lower costs and the skills of the work force,

for in India costs may be lower, but employees are highly educated and qualified.

How well can Indian agents handle the different business situations? As long as the

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commitment and investment in people are maintained, Indian offshore agents can

handle the same situations better than their counterparts in other countries. They are

skilled, motivated, and highly qualified, and the success of different multinationals

over the last few years is proof of this.

3.12 Which are the Industries Using Call Centre ?

The scope is wide. Any business which has to interact with customers and

manage large volumes of data effectively can use a Call Centre to improve

productivity, sales, delivery and customer satisfaction.

Businesses include:

1. Catalog retailing

2. Financial services

3. Hospitality

4. Cable television

5. Utilities

6. Manufacturing

7. Consumer products

3.13 Customer Service Representatives (CSRs)

Customer Service Representatives (CSRs) are people employed by companies

to serve as a direct point of contact for customers. In the 24X7 world today companies

need to ensure their customers receive an adequate level of service or help with their

questions and concerns. Such customers may be individual consumers or other

companies, each with different needs. Many companies provide customer service via

the telephone through call centers. The CSRs interact with customers to provide

information in response to inquiries about products or services. Hey also handle and

resolve complaints and communicate with customers through a variety of means.

Telephone is the most popular, but increasingly, customer service is supplied by e-

mail. Faxes and regular mail correspondence and even a direct meeting can also

heused by the CSR. Some customer service representatives handle general questions

and complaints, whereas others specialize in a particular area. Freshers have to

undergo intense training to make them suited for the job.

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3.14 Job Prospects and Career Options.

There is a great scope for Call Centers in India. The large population of

educated English speaking people and the comparative low cost are encouraging more

and more companies from abroad / inland to base or outsource their Call Centers to

India. Remuneration: As a fresher, one could start his / her career in an International

Call Centre as a Call Center Executive and earn highly attractive pay packages.

Eligibility: There are no specific educational qualifications required to become a CSO

(Customer Service Officer/Operator sensitive) in a Call Centre. It is a good option for

plus two or fresh college graduates as well as even housewives and retired people.

Personal Skills and Attributes: The skills required vary depending on the project and

the type of business that is being handled. A very good command over English

language is the main skill required. Computer literacy, typing speed, knowledge of

consumer behavior, marketing skills (a certificate or Diploma in Marketing in case of

‘outbound’ telemarketing is preferable), the ability to enter and retrieve information

quickly from databases and an ability to analyze problems are other useful skills that

come in handy.

Good communication and listening skills are important. Customer Service

Officer (CSO) should have the patience to listen to and comprehend the need, be

unfailingly polite, good natured, and reasonably intelligent to choose between options

and remedy problems effectively to the satisfaction of the customer. Persuasion skills

are needed in an ‘outbound’ contact centre where you either collect money from

defaulting customers or try to promote sales and encourage customers to use your

client’s products. They may be required to work at odd hours especially in

International Call Centers where the customers may be calling from places where the

timing may be several hours behind IST.

Training: Fresher’s have to undergo intense training to make them suited for

the job. The training includes accent training, listening skills, ‘slang’ training, accent

neutralization, telephone etiquette, telesales etiquette and cyber grammar, interaction

skills, customer relationship, management skills and Call Centre the product of the

company, even how it could malfunction, and breakdown and fails its objective, to

deal with complaints from customers. Continuous training at regular intervals

including updating on the latest references and slang the callers are likely to use,

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updating on the new products, developing faster ways of accessing information is a

must for growth in this field.

There is no standardized training period. It can be between two weeks to

twelve weeks depending on the project. There will be an initiation programme, which

includes familiarizing the companies work culture and the international environment

in which they deal with their clients to have an awareness of the culture abroad. Then

the actual training begins which includes both theoretical and on the job training.

In India, the training is usually done by the company itself. There are many

institutes that give training in this field abroad; recently the trend is picking up in

India also. International certifications from STI knowledge, a leading provider of Call

Centre training in the US, have recently been introduced in India. STI offers

international certifications following a Web-based exam after completion of the

course. The certifications are Help Desk 2000, Call Centre 2000 and Knowledge 2000

for all the three tiers, i.e., the operators, managers and director.

3.15 Call Centre Supervisors and Managers

After working as an operator for three or four years, you will be promoted to a

supervisory level based on your ability and performance. As vacancies occur it will be

published in house, an interview will be conducted and promotions made. As a

supervisor, you will be in charge of the various operators working under you. Then

you can be promoted to the managerial level depending on your experience, ability

and skills acquired. Performance is measured based on targets achieved in the

particular business. In outbound centers, like telemarketing your performance is

calculated on sales per hour, or in collection department of a bank, performance is

measured on contacts made and money collected. In inbound Call Centers,

performance is measured on the basis of average talk time, that is, the time you take to

satisfy the customer, analysis and understanding of the problem and the courtesy

extended to the customers.

A Call Centre experience is regarded as worthwhile experience for customer

relations, sales jobs or insurance sector. One has a better chance of moving on to other

industries with experience in Call Centers. For examples, you can move to insurance

sector if you have had experience dealing with insurance clients in your process.

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3.16 The Importance of Good Customer Service

The key to customer retention is good customer service, Regardless of

whichever industry one is a part of, customer care is of utmost importance. An

increasing number of organizations are realizing that with growing competition, new

technological innovations and constantly improving services and products, consumers

are being pulled in different directions. It is vital to ensure that customer loyalty

programs are an integral part of an organization. Acquiring new customers is

important, but holding on to existing customers is crucial. After all if existing clients

are satisfied they will help in acquiring new ones by spreading the news of your

outstanding customer services. Take a look at these statistics:

• Repeat customers spend 33% more than new customers.

• Referrals among repeat customers are 107% greater than new customers.

• It costs 6% more to sell something to a prospect than to sell that same thing to

a customer.

So you can see the need for a consistent and committed customer support

service that will nurture and strengthen this bond. Some of the main problems

customers have are of unresolved complaints, pricing issues, competitors having

better offers, or they just feel you do not care enough. One has to be constantly tuned

in to a customer’s needs. Determining what they want is an important factor in

organizational success. Since the market is in constant flux, one needs a consistent

and committed approach in order to gauge and be in touch with the changing whims

of a consumer.

But what if customer care is not one of your core activities? You may lack the

expertise, resources, and finances to ensure good customer services. Outsourcing to

competent and dedicated customer care professionals is a great option and the path

that many global companies are taking.

3.17 The Need to Outsource Customer Services

The fact that there needs to be an intense focus on customer care is

indisputable. Acquiring new customers as well as keeping existing clients satisfied by

anticipating their needs can only be done through good customer service.

Outsourcing, after all, offers a convincing case for ROI (Return On Investment),

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minus a lot of the risk inherent in setting up a complex operation that is not a core

competency. India is becoming an increasingly popular location for outsourcing and

one can be assured that there will be professional and highly qualified people

handling your clients and providing good customer care service.

3.18 Fears of Outsourcing Customer Services

Outsourcing can invoke certain fears, doubts, and anxieties pertaining to

different things. Culture, Skills, Competency Working with people from a different

country who are not familiar with the particulars of your culture can seem to be a

problem, In India there is a large pool of people who are fluent in English and even

though there may be some initial problems with accent or different terminology, these

supposed obstacles are overcome during the intensive training that customer care

professionals have to go through in order to be a part of customer contact centers.

People employed in the contact centers are well educated, a minimal educational

qualification being a college graduate. India has state-of-the-art contact centers, high

availability of infrastructure resources, and liberal government policies on Call

Centers.

3.19 Is it actually cost effective?

Yes! Outsourcing your customer service needs to India will not only ensure

you of quality customer care but also your cost savings could be as high as fifty per

cent! Outsourcing creates a layer between company and customer. Conventional

wisdom traditionally has held that any activity important enough to have an impact on

productivity – be it customer care, distribution, transportation, or manufacturing and

assembly – is best performed, or at least managed, in-house. But in the last ten years,

this belief has proved to be incorrect. Most companies now outsource their logistics,

distribution and transportation operations. And, increasingly, many companies have

chosen to outsource their manufacturing operations, especially if they do business on

a global scale. Now, the same phenomenon is catching on in the customer care

industry.

Technology has become so advanced today that one does not have to be

physically close to actually have access to data or build relations with one’s

customers. Whatever information and knowledge your offshore customer contact

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center has is immediately accessible by you. There is no impeded access to any sort of

data.

Besides, if one does not have the resources or finances to undertake customer

care at one’s own company, it is a wiser option to outsource to a company that can

completely focus on just this aspect of your business. This focus will make sure that

the quality of your customer services improves. We do not simply act in the capacity

of a facilitator or manager, but will be part of your team, always staying in the process

and this interaction makes sure that there is a seamless relationship between you, your

vendor, and your customers.

3.20 Customer Care Services

There are various ways of improving your relationship with customers and

they can all be successfully outsourced. Depending on your needs you can choose

what sort of customer support service you need.

• Customer Care Services include:

• Telemarketing/Telesales

• Customer Support

• Order Taking

• Customer Service

• Product Support

• Technical Help Desk

• Collections

• Market Research

3.21 Outsource Inbound Call Centre Services

Customer support has become integral to organizational success. It is for this

reason that Call Centers have carved out a niche for themselves. In a world of ruthless

competition, survival is the keyword-which involves not only a vibrant and dynamic

attitude while carrying out business but also ensuring a flawless customer support

service. This is why the need for an inbound Call Centre service is inevitable.

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3.22 How can an Inbound Call Centre in India enhance your Business?

Let a state-of-the-art inbound Call Centre in India handle the phones. Every

missed Call can be a missed opportunity. Whether you need to answer 100 calls in a

day, or 10,000, you will find an inbound Call Centre to be a professional and cost-

effective extension of your business. The customer support agents in an Indian

inbound Call Centre services will cater to your customer support needs and an

answering service will also allow you to be confident when you are away from your

office and not worry about your business. Knowing that your calls are being answered

properly, professionally, and courteously. Ensure the satisfaction of today’s

demanding customer, through an Indian inbound Call Centre service.

What are the Advantages of Outsourcing to an Indian Inbound Call Centre?

An Indian inbound Call Centre service can offer communication services specifically

designed to maximize the efficiency of your direct marketing efforts or to be a part of

your technical support team. They will work together with you as a partner, building a

strong, successful long-lasting relationship with your customers.

3.23 What Benefits can an Inbound Call Centre in India offer? An inbound

Call Centre in India can offer:

• Skilled, professional, customer support and technical service representatives

• Improved market coverage

• Faster ramp-up, launch, and roll-out of new campaigns

• Experience with programs similar to yours

• Rapid response to market conditions

• Account management expertise

• Enhanced reporting capabilities

• Market testing capabilities

• Remote call monitoring

3.24 Why not just have answering Machines to answer Queries?

Answering machines or voice mail can be perceived as cold and impersonal.

Live telephone answering services like inbound Call Centers give you amore

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professional image. Statistics show the percentage of hang-ups on answering

machines is significantly greater than a live answering service.

3.25 Call Center Outsourcing-Financial Implications

Call Centre outsourcing is proving to be one of the most successful ways to

increase cost effectiveness. Companies like GE, American Express, Sprint, Dell,

AOL, and Amazon illustrate this pattern. After trying Call centre outsourcing to lower

cost locations like India, these and many others Fortune 500 companies have

improved cost effectiveness by up to 50 per cent! Moreover, they have also improved

the quality of their customer support and satisfaction.

3.26 Call Centers in India

In order to meet the growing international demand for cost-effective,

customer-oriented Call Centers, many organisations worldwide are outsourcing these

services from locations like India. India has intrinsic strengths which can make A

booming IT industry, with IT strengths recognised all over the world. The largest

English-speaking populations after the USA. A vast workforce of educated English

speaking tech-savvy personnel-a boon in a high growth industry faced with a shortage

of skilled workers. One company in India proposes to harness the high-quality

technical support available here by hiring 300 PhD’s to provide very high end

consulting through video conferencing telephone. Given these advantages, India could

build a $ 17 billion industry by 2008 according to the NASSCOM McKinsey Report.

How large is the Call Centre Industry in India?

There are 25 CTI-enabled Call Centers and 300-500 non-CTI call centers in India.

British Airways’ subsidiary employees about 750 people and is expected to hire 800

more, while GE has 10000 personnel at its Gurgaon facility. There are others like Tata

Consultancy services, Wipro spectra mind, HCL technologies ltd. Sutherland, global

services and All sec technologies ltd;

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3.27 Additional Issues in Call Centers

There are many other issues that have to be planned for while managing Call

Centre. A few of these issues are listed below:

Call center noise hazards

Planning for failure of equipment

Need for flexibility in meal-times and washroom needs

Needs for job variety and training

Job exhaustion and stress

Staff turnover (high attrition rates are common in the CallCenter

Research by the UK’s Health and safety Executive showed 30 per cent of call centre

employees interviewed claimed symptoms of acoustic shock. Potentially this suggests

that 300,000 UK operators may be acoustic shock victims.

Variations on the Generic Call Centre Model

The various components in a call centre discussed in the previous sections are the

generic form of a call centre. There are many variations on the model developed

above. A few of the variations are listed below:

1. Remote Agents: An alternative to housing all agents in a central facility is to use

remote agents. These agents work from home and use a Basic Rate ISDN access

line to communicate with a central computing platform. Remote agents are more

cost-effective as they don’t have to travel to work; however, the call centre must

still cover the cost of the ISDN line. VOIP technology can also be used to

remove the need for the ISDN, although the desktop application being used

needs to be web-enabled or VPN is used.

2. 2. Temporary Agents: Temporary agents are useful as the can be called upon if

demand increases more rapidly than planned they are offered a certain number

of quarter hours a month.

3. Virtual Call Centre: Virtual call Centre are created using many smaller centers

in different locations and connecting them improves service levels.

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4. Interaction Centers: As call centers evolve and deal with more media than

telephony along, some has taken to the term, “interaction centre” Email, Web

callback and many more are gradually being added to the role.

3.28 Criticism of Call Centre

Criticisms of call Centre generally follow a number of common themes:

From Callers:

Operators working from a script

Non-expert operators (call screening)

Incompetent or untrained operators, incapable of processing customer’s requests

effectively

Overseas location, with language and accent problems

Automated queuing systems

From Staff:

Close scrutiny by management (i.e. frequent random eavesdropping on operator’s

calls) Low pay Restrictive working practices (i.e. there isn’t much spaces for personal

creativity since many operators are requests to follow a pre-written script) High stress:

A common problem associated with front end jobs where employees deal directly

with customers.

Poor working conditions, (i.e. poor facilities, poor maintenance and cleaning,

cramped working conditions management interference).

As detailed above none of these are inherent in the call center model, although many

companies will experience some or all of the above while implementing a call centre

approach. As the science suggests, done properly, a call centre can offer the quickies

route to resolution of customer queries, capitalizing on the ready availability of highly

skilled and intelligent people in some area.

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3.29 Main Factors in the Explosive Growth of the Indian BPO Industry

The Indian BPO industry’s initial focus was on creating a strong and reliable

platform, using technology as a selling point, thus building on the success of the

Indian software industry of the late 1990s. Then it moved to the level of

infrastructure development where technology is increasingly used as a differentiator

and for bettering the quality of service delivery. This evolution in offering quality of

service has been possible for two main reasons. First, India has what is known as

“people attractiveness.” India produces over two million English-speaking graduates

every year who are ready to work for salaries that are as much as 80 percent lower

than those paid to their Western counterparts. This availability of technical and

computer-literate human resources who can offer lower response time with efficient

and effective service makes India a magnet for multinational corporations (MNCs).

Second, India presently enjoys the advantage of “location attractiveness.” Enormous

savings are possible for foreign firms by outsourcing their processes to India because

of the availability of a relatively inexpensive but strong and established infrastructure

that offers telecom services, improved international bandwidth, technology parks, a

well-developed software industry, and an existing base of blue-chip companies

already operating there.

In addition, many Indian BPOs have successfully adopted several global industry

standards such as SEI-CMM, ISO, TQM, Six Sigma Quality, and COPC.

Furthermore, with an emphasis on a secured environment, Indian BPOs are adopting

standards such as ISO 17799, BS7799, COBIT, and ITSM. The government now

provides a more conducive regulatory environment for global corporations with

incentives like the ten-year tax holiday and rebates in custom duties. Of course, the

round-the-clock advantage for western companies due to the huge time difference

between India and United States/United Kingdom offers them a competitive

advantage over their rivals. At present, the United States and United Kingdom

together account for nearly 80 percent of the existing IT and BPO offshoring in

India.

What is really a revelation for top managers in Western MNCs is that employees of

similar talent and skills cost much less in India than in the United States or Europe.

For example, an Indian entry-level staff member earns between $150 and $250 per

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month, which results in annual savings of $30,000 for every BPO employee.

According to McKinsey, if a bank shifts the work of 1,000 people from the United

States to India, bout $18 million is saved annually. Similarly, giant U.S.

pharmaceutical firms can reduce the cost of new drug development, currently

estimated at between $600 million and $900 million, by as much as $200 million if

the work is outsourced to India.

Such cost savings are evidenced from the cost of a recently built new center for

Standard Chartered Bank in Chennai (Madras), which was $33 million—a fraction of

what a similar building would cost in the western world (Merrell, 2003; Chengappa

and Goyal, 2002).

India also enjoys various advantages over its nearest competitors, Ireland and the

Philippines, in the BPO industry. For example, in comparison to Indian centers

recruiting over 100,000 employees, only about 18,000 and 8,000–10,000 people are

recruited by Ireland and the Philippines, respectively. Ireland and the Philippines

have 150 and 70 centers, respectively. Accordingly, the revenue earned by the Irish

and Philippines centers is very little compared to those in India which has over 450

BPO companies. The annual salaries of graduates in the United States, Ireland,

Singapore, and the Philippines are $28,000; $19,500; $16,000; $2,900, respectively.

In India, the average annual salary is around $2,400. Interestingly, in China, salaries

are even lower at around $2,000 a year. However, China does not have the same

number of English-speaking graduates available. Moreover, in comparison to India,

which produces over 2,100,000 graduates annually, China, the Philippines, Ireland,

and Singapore produce 950,000; 380,000; 42,200; and 12,500 graduates, respectively

(Chengappa and Goyal, 2002; Punch, 2004; Shastri, 2004). India’s “people” and

“location” advantages have made it more attractive to global corporations, and it

currently has a dominant position in the BPO industry. The Indian BPO sector has

been forecasted to grow at an annual rate of fifty percent and employ as many as one

million people by 2008 (McKinsey, 1999; NASSCOM, 2001; 2005b; The Economist,

2004; Sifynews, 2005; Prahalad, 2005).

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3.30 Emerging HRM Problems in the BPO Industry in India.

Despite the growing success of Indian BPO industry, analysts and media

reports have started to focus on problems and challenges facing the sector.

According to the global management consulting firm, Diamond Kluster

International’s 2005 “Global IT Outsourcing Study,” the number of clients

prematurely terminating an outsourcing relationship has doubled to 51 percent, while

the number of clients satisfied with their offshoring providers has decreased from 79

percent to 62 percent. The issues related to poor infrastructure of reckless start-ups as

a source of dissatisfaction in India have also been discussed (Pande, 2005;

Christopher, 2005). Although outsourcing continues to help Western firms save

significant sums of money despite such concerns (The Hindu, 2005; Read, 2001),

these problems are real and growing and have the potential to make India less

attractive for BPO. Hence, there is a critical need to address such issues effectively.

Many troubles facing the Indian BPO industry relate directly to the management of

human capital. For example, the 2005 “global offshoring outsourcing summit” of the

Indo-American Chamber of Commerce noted several trends which will shape the

future of Indian BPO industry. Some of the challenges include annual turnover rates

ranging from 20 to 80 percent and an imbalance in the demand and supply of a

skilled and talented workforce. There is also an emerging shortage of manpower at

the mid-management level. The basic “cost-effective” model of Indian BPOs appears

to be weakening as the wages continue to rise annually by 10–20 percent, and in

some cases, revenues are declining. There is an increasing scarcity of the appropriate

skills gained through the education system, which is low on quality and relevance.

Because of shortages, hiring new talent has become more expensive. In 1999, the

average pay packet of an entry-level agent was $160–$180; now it is $300–$350.

Due to high attrition rates, every employee who quits costs the company another

$900–$1,100 to recruit and train a replacement. Finding the right candidate is now

becoming a problem. At present for every 100 applicants in Mumbai, just one or two

make the cut. Four years ago, the success rate was 20 percent (Rediff.com, 2005a,

2005b; Sangameshwaran and Rai, 2005). Apart from this, BPO employees are

experiencing problems related to stress, sexual and racial abuse, and dissatisfaction

at work (Walletwatch, 2003; Cacanas, 2004; Singh, 2005b; Witt et al., 2004; Rose

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and Wright, 2005; Houlihan, 2002). The literature on HRM practices in the Indian

BPO industry is scant and offers little guidance on how to remedy such problems by

effectively managing human resources.

3.31 Paying Attention to HRM Systems in India

Many Indian entrepreneurs, and gradually the Indian government, are realizing the

importance of the boom created by the country’s BPO sector and are taking steps to

foster it. India has a new IT law that aligns it with 11 other countries in compliance

with common e-commerce rules that allow for legally valid paperless transactions and

legal transfers. The government has ended its monopolies on long distance and

Internet bandwidth. Such facilities and resources are encouraging firms to create

BPOs in India (The Economist, 2004). In the midst of such economic developments,

the nature and role of the HR function is also changing and evolving (Saini and

Budhwar, 2004).

The personnel function in India originated in the 1920s, when concern for labor

welfare in factories resulted in the Trade Union Act of 1926 that gave formal

recognition to workers’ unions. The Royal Commission of 1932 recommended the

appointment of labor officers, and the Factories Act of 1948 laid down the duties and

qualifications of labor welfare officers. Such developments formed the foundation of

the personnel function in India (Saini and Budhwar, 2004). However, the influence of

social contacts, caste, relationships, and politics on Indian HRM policies and practices

remains prominent (Sparrow and Budhwar, 1997). This creates an interesting tussle

between existing strong social traditions (such as the importance of social contacts

and one’s affiliation to a particular group) and the pressure to move to modern

professionalism (i.e., pressure to formalize and rationalize management systems).

HRM practices need to be consistent with a systematic and rationalized

employment system. For example, the adoption of formal testing of job applicants,

job evaluation, training needs analysis, training evaluation, and performance-related

pay are activities associated with highly structured systems. To a great extent, such an

approach is clearly observable in outsource contact centers (OCCs) operating in

developed nations. Batt and Moynihan (2002) summarize OCC work under three

categories, namely, mass production, professional services, and hybrid mass

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customization. Such a categorization seems to be valid for BPOs operating in India as

well.

However, less research evidence exists regarding structured employment systems in

Indian organizations where rules about practices such as recruitment, training,

promotions, and lay-offs are ad hoc and are subject to easy manipulation by

employers (VenkataRatnam, 1995; Sparrow and Budhwar, 1997). Furthermore,

social, cultural, economic, and political factors exert a strong influence on Indian

HRM policies and practices (Budhwar and Sparrow, 2002). At times, selection,

promotion, and transfer are based on ascribed status and social and political

connections, so there is a strong emphasis on collectivism—family and group

attainments take precedence over work outcomes (Budhwar and Khatri, 2001;

Kanungo and Mendonca, 1994). Similarly, Sharma (1984) reported that staffing is

primarily governed by familial, communal, and political considerations. Motivational

tools are more likely to be social, interpersonal, and even spiritual. In such conditions,

the employees’ orientation emphasizes personalized relationships rather than

performance (Kanungo and Mendonca, 1994). These matters suggest that Indian

HRM systems are less formal and rationalized. On the other hand, multinational

companies, for many reasons (such as control and coordination), may adopt global

standardized policies and practices in their subsidiaries around the world (Bjorkman,

2004). Given the sector’s rapid growth and the involvement of a large number of both

national and multinational firms, and a significant impact of Indian BPOs on the

global economy, understanding the nature of the HRM systems of Indian BPOs is

crucial. Our research thus seeks to assess the status of HRM practices of Indian BPOs,

and we sample from both Captive as well as Third-Party units— the most prevalent

types of Indian BPOs.

3.32 Methods

Given the exploratory nature of the research, we adopted a mixed-method approach

(comprising in-depth interviews of managers, self-completing questionnaires, and

secondary sources). Our direct sources of information were the HR managers of

Indian BPOs who agreed to be interviewed. Access to the BPO units was secured

through two of the researchers’ previous research undertakings and other contacts,

and from networking techniques. The interviews were conducted and the data were

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collected from late 2004 to July 2005 from a total of 51 (30 Captive and 21 Third-

Party) Indian BPO units. These are located in several locations with a majority being

in northern India near Delhi. Summary statistics of the BPOs included in this research

are presented in Table 1.

During the interviews, the managers provided qualitative data on the firm’s HRM

practices and elaborated on their experiences with these practices. Apart from the

qualitative information, the participants also completed a questionnaire related to a

number of HR practices and policies. In total, the data collection meetings lasted

between 45 and 90 minutes. Typically, the most senior HR specialist of the unit or

someone with the good understanding of the company’s HR functions provided data.

Although speaking to other employees could have provided a more comprehensive

picture of the HR role, giventhe limitations of time and the nature of research, we

focused on the “subject matter experts.” Senior HR managers were the best informed.

In some cases, the interviews were allowed to be tape recorded, which were

transcribed and later content analyzed, and quotes from the interviews are provided in

our analysis.

The interview schedule consists of a number of sections. The first section has 15

questions on the demographic details of both the interviewees and their companies.

The next section examines the nature of the HR department and the organizational

structure of the firm. This is followed by a series of subsections on HRM practices

including recruitment, training and development, compensation, appraisal/assessment,

career management, attrition/employee turnover and retention, and the types of

challenges facing the HRM department. In addition, a 23-item, self-completing

questionnaire on various aspects of procurement, employee involvement, and

employee turnover was completed by the HR managers.

The most commonly used job designations of the respondent organizations were

HR/HRM/ HRD manager/director and general manager. The average work experience

of the respondent organizations was 8.2 years. Basic demographic details of the

sample show that 42 percent of the firms are each U.S.- and India-based, followed by

the United Kingdom at 8 percent, Germany at 4 percent, and Finland, Switzerland,

and French-based at 2 percent each. Sixty percent of the research firms established

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their operations in India after 2002. Almost all the sample firms (98 percent) serve

overseas clients.

3.33 What is a Call Centre?

A Call Centre or Call Center (see spelling differences) is a centralized office

used for the purpose of receiving and transmitting a large volume of requests by

telephone.

Business Process Outsourcing (BPO) is the leveraging of technology or specialist

process vendors to provide and manage an organization’s critical and/or non-critical

enterprise processes and applications. The most common examples of BPO are Call

Centers, human resources, accounting and payroll outsourcing. Business process

outsourcing may involve the use of offshore resources.

Use of a BPO as opposed to an application service provider (ASP) usually also means

that a certain amount of risk is transferred to the company that is running the process

elements on behalf of the outsourcer, BPO includes the software, the process

management, and the people to operate the service, while a typical ASP model

includes only the provision of access to functionalities and features provided or

‘served up’ through the use of software usually via web browser to the customer.

It can be one or all of these:

A huge telemarketing centre

A teleservicingcentre

A help desk, both internal and external

An outsourcer (also known as a service bureau) that uses its large capacity to serve

lots of companies

A reservation centre for airlines or hotels, A catalog retailer An e-tailing centre, An e-

commerce transaction centre that doesn’t handle calls so much as automated customer

interactions A fund-raising and collection organization.

A Call Centre is traditionally defined as a physical location where calls are placed, or

received, in high volume for the purpose of:

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Sales

Marketing

Telemarketing

Customer service

Technical support

Specialized business activity

A Call Centre is operated by a company to administer incoming product support or

information inquiries from consumers. Outgoing calls for telemarketing, clientele, and

debt collection are also made. In addition to a Call Centre, collective bundling of

letters, faxes, and e-mails at one location is known as a contact centre.

3.34 Call Centre: A Good Option

A Call Centre is often operated through an extensive open workspace, with work

stations that include a computer, a telephone set/headset connected to a telecom

switch, and one or more supervisor stations. It can be independently operated or

networked with additional centers, often linked to a corporate computer network,

including mainframes, microcomputers and LANs. Increasingly, the voice and data

pathways into the Centre are linked through a set of new technologies called computer

telephony integration (CTI).

Most major businesses use Call Centers to interact with their customers. Examples

include utility companies, mail order catalogue firms, and customer support for

computer hardware and software. Some businesses even service internal functions

through Call Centers. Examples of the include help desks and sales support.

A Call Centre is a service centre with adequate telecom facilities, access to internet

and wide database, which provide voice-based or abroad through trained personnel.

Call Centers exist in all sectors of business including banking, utilities,

manufacturing, security market research, pharmaceuticals, catalogue sales, order desk,

customer service, technical queries (help desk), emergency dispatch, credit

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collections, food service, airline/hotel reservations, etc. The wide area of services

provided by the Call Centers makes it a lucrative career with a range of opportunities.

Traditionally, Call Centers meant only voice-based customer support. But now most

Call Centers are more of contract centers, offering e-CRM services, which include

voice-based customer support as well as e-mail response, web-based test-chat services

and other customer interaction channels. The Call Centre services can be ‘inbound’

where in calls are received from customers enquiring about a service or product that

an organization provides. The Call Centre services can be ‘outbound’ where in calls

are made to customers to sell products or collect information/money. Etc. Call Centre

services can also be specialized, say in business processing where in calls are made

from one company to another company.

Some Call Centers stick to only domestic businesses dealing with customers within

the country called domestic Call Centers while others such as an International Call

Centre mainly deal with clients from abroad, say from US, Europe, etc. There is a

great scope for Call Centers in India, with a large population of educated English-

speaking people. The wide range of opportunities, comparatively well-paid jobs for

the minimum qualification it requires and the facilities the companies provide like to

and fro transport, subsidized meals and medical facilities make call Centers good

option.

Call Centre Outsourcing Cost Benefits

Lower Labor Costs in Offshore Call Centre Outsourcing

In many Call Centers in either North America or in Europe, labour costs are the

largest share of operating expenses. In India, labor costs are much lower, about 10-20

per cent of what it is in the US. Because of this operating expenses are more evenly

distributed across labor, systems and telecom, and real estate and utilities. The

savings, for some of these companies, have been truly phenomenal going up to as

much as $250 million annually. Labour costs in India are quite low compared to the

US. Someone answering complicated financial questions on the phone in the US may

expect $40,000 a year, but in India, labour costs are a fraction of what they are

overseas.

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A skilled and Abundant Work Force

Many Call Centers in America or in Europe hire high school graduates. These

employees often appear to lack commitment and motivation, as can be observed by

the high attrition rates, about 40 per cent or higher.

In India however, Call Centers hire university graduates from the enormous pools of

skilled labor (India alone produces 2 million English-speaking college graduates and

300,000 post graduates annually). Although just some 5% of Indians are proficient in

English, in a country of more than one billion people, this still represents a labor pool

of more than 50 million people. For these employees, a Call Centre profession is not

just a temporary job, but a career they are committed to.

The types of services being offered by offshore Call Centers are increasing. At first

there was just simple transaction oriented work like back office processing. Now

however, multi nationals have observed the potential of service providers in India as

they have observed astounding success. This confidence has resulted in a larger

number of services being offered. Today, knowledge process outsourcing services,

which require high levels of expertise are also being outsourced to India.

Call Center Outsourcing-The Operational Approach

The three options are:

1. Captive Facilities

2. Third-party

3. Outsourcing joint ventures

The captive facility option provides the greatest savings and control. However, it is

often the most difficult and takes the longest. In India, GE and American Express

have led in setting up captive facilities – in part because they already had significant

presences in this country.

The third-party outsourcing option reduces the risk and time of setting up operations-

but it also reduces cost savings.

Joint venture is the third option. A recent innovative Joint Venture arrangement is

Build, Operate and Transfer (BOT). Under this model, an Indian company helps set

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up the Indian operations that the Joint Venture partner has the option to eventually

take over. This benefits both parties. It enables the foreign company to get its

operations up and running quickly, while guaranteeing a takeover option. And it gives

the Indian company the references and credibility to become an established player.

BOT usage is expected to increase over time.

The right approach for a company depends on how quickly the offshore operation

needs to be up and running, the degree of control required, the company’s knowledge

and experience in the offshore location, the financial implications and the availability

of management resources.

Call Center Outsourcing – Increasing Cost Advantages

The Call Center industry is booming in India. Leased line prices have fallen

dramatically. High bandwidth telecom links are available. Toll-free long distance

services are allowed. Foreign companies have realized that it is much cheaper

outsourcing Call Centre business to India, leveraging on its cheaper labor and IT

skills. Besides, exposure to competition is pushing more and more services and

industries to put customer service in the forefront. Manpower cost savings of

approximately 70-80 percent. TheReduced employee attrition from 70 percent to

approximately 25 percent.TheProcess re-engineering benefits; Availability of the

mature vendors with the ability to ramp up on demand; Availability of skilled

manpower.

Fears have been voiced that increasing offshore facilities will affect the

sustainability of the cost advantage. In relatively saturated offshore locations like

Ireland and the Netherlands. It has taken nearly 10 years for wages to increase from

50-75 per cent of those in the US. However, such an increase will take 25-30 years in

locations such as India because of lower initial wages and large educated work force

that is constantly growing-increasing competition among the job-seekers.

Lower costs but high quality of skills

There is no correlation between lower costs and the skills of the work force, for in

India costs may be lower, but employees are highly educated and qualified.

How well can Indian agents handle the different business situations?

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As long as the commitment and investment in people are maintained, Indian offshore

agents can handle the same situations better than their counterparts in other

countries. They are skilled, motivated, and highly qualified, and the success of

different multinationals over the last few years is proof of this.

3.35 Which are the Industries Using Call Centers?

The scope is wide. Any business which has to interact with customers and mange

large volumes of data effectively can use a Call Centre to improve productivity, sales,

delivery and customer satisfaction.

Businesses include:

1. Catalog retailing

2. Financial services

3. Hospitality

4. Cable television

5. Utilities

6. Manufacturing

7. Consumer products

8. Customer Service Representatives (CSRs)

Customer Service Representatives (CSRs) are people employed by companies to

serve as a direct point of contact for customers. In the 24X7 world today companies

need to ensure their customers receive an adequate level of service or help with their

questions and concerns. Such customers may be individual consumers or other

companies, each with different needs. Many companies provide customer service via

the telephone through call centers. The CSRs interact with customers to provide

information in response to inquiries about products or services. Hey also handle and

resolve complaints and communicate with customers through a variety of means.

Telephone is the most popular, but increasingly, customer service is supplied by e-

mail. Faxes and regular mail correspondence and even a direct meeting can also he

used by the CSR. Some customer service representatives handle general questions and

complaints, whereas others specialize in a particular area.

The Fresher has to undergo intense training to make them suited for the job.

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The Job Prospects and Career Options.

There is a great scope for Call Centers in India. The large population of educated

English speaking people and the comparative low cost are encouraging more and

more companies from abroad / inland to base or outsource their Call Centers to India.

Remuneration: As a fresher, one could start his / her career in an International Call

Centre as a Call Center Executive and earn highly attractive pay packages.

Eligibility: There are no specific educational qualifications required to become a CSO

(Customer Service Officer/Operator sensitive) in a Call Centre. It is a good option for

plus two or fresh college graduates as well as even housewives and retired people.

Personal Skills and Attributes: The skills required vary depending on the project and

the type of business that is being handled. A very good command over English

language is the main skill required. Computer literacy, typing speed, knowledge of

consumer behavior, marketing skills (a certificate or Diploma in Marketing in case of

‘outbound’ telemarketing is preferable), the ability to enter and retrieve information

quickly from databases and an ability to analyze problems are other useful skills that

come in handy.

Good communication and listening skills are important. Customer Service Officer

(CSO) should have the patience to listen to and comprehend the need, be unfailingly

polite, good natured, and reasonably intelligent to choose between options and

remedy problems effectively to the satisfaction of the customer. Persuasion skills are

needed in an ‘outbound’ contact centre where you either collect money from

defaulting customers or try to promote sales and encourage customers to use your

client’s products. They may be required to work at odd hours especially in

International Call Centers where the customers may be calling from places where the

timing may be several hours behind IST.

Training: Freshers have to undergo intense training to make them suited for the job.

The training includes accent training, listening skills, ‘slang’ training, accent

neutralization, telephone etiquette, telesales etiquette and cyber grammar, interaction

skills, customer relationship, management skills and Call Centre the product of the

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company, even how it could malfunction, and breakdown and fails its objective, to

deal with complaints from customers. Continuous training at regular intervals

including updating on the latest references and slang the callers are likely to use,

updating on the new products, developing faster ways of accessing information is a

must for growth in this field.

There is no standardized training period. It can be between two weeks to twelve

weeks depending on the project. There will be an initiation program, which includes

familiarizing the companies work culture and the international environment in which

they deal with their clients to have an awareness of the culture abroad. Then the actual

training begins which includes both theoretical and on the job training.

In India, the training is usually done by the company itself. There are many institutes

that give training in this field abroad; recently the trend is picking up in India also.

International certifications from STI knowledge, a leading provider of Call Centre

training in the US, have recently been introduced in India. STI offers international

certifications following a Web-based exam after completion of the course. The

certifications are Help Desk 2000, Call Centre 2000 and Knowledge 2000 for all the

three tiers, i.e., the operators, managers and director.

3.36 Job prospects & Career Options

There is a great scope for Call Centers in India. The large population of educated

English speaking people and the comparative low cost are encouraging more and

more companies from abroad/ inland to base or outsource their Call Centers to India.

GE capital, American Express, Wipro Spectra mind, Infowavz International

(Mumbai), Daksh, Reliance InfoTech are some of the Call Centers which are on a

recruitment spree.

3.37 Call Centre Operators/Customer Care Executives

This is the entry level in Call Centers. Your general duties include answering

telephone calls, talking down details of the caller’s query and logging this information

on a computer, providing the caller with appropriate information or advice, in some

cases, selling a caller products or services. In outbound Call Center services such as

tele-marketing, an operator will also need to identify potential customers and make

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outgoing calls marketing their organization’s product, occasionally following-up calls

by sending letters, faxes or e-mail, deal with customer complaints, etc. A Call Center

operator’s duties will depend on the type of product or service that the organization

provides and the type of client he/she is servicing, Customer service executives can

move on to the technical, financial or the insurance sector, etc.

3.38 Call Centre Supervisors and Managers

After working as an operator for three or four years, you will be promoted to a

supervisory level based on your ability and performance. As vacancies occur it will be

published in house, an interview will be conducted and promotions made. As a

supervisor, you will be in charge of the various operators working under you. Then

you can be promoted to the managerial level depending on your experience, ability

and skills acquired. Performance is measured based on targets achieved in the

particular business. In outbound centers, like telemarketing your performance is

calculated on sales per hour, or in collection department of a bank, performance is

measured on contacts made and money collected. In inbound Call Centers,

performance is measured on the basis of average talk time, that is, the time you take to

satisfy the customer, analysis and understanding of the problem and the courtesy

extended to the customers.

A Call Centre experience is regarded as worthwhile experience for customer relations,

sales jobs or insurance sector. One has a better chance of moving on to other

industries with experience in Call Centers. For examples, you can move to insurance

sector if you have had experience dealing with insurance clients in your process.

3.39 The Importance of Good Customer Service

The key to customer retention is good customer service, Regardless of whichever

industry one is a part of, customer care is of utmost importance. An increasing

number of organizations are realizing that with growing competition, new

technological innovations and constantly improving services and products, consumers

are being pulled in different directions. It is vital to ensure that customer loyalty

programs are an integral part of an organization. Acquiring new customers is

important, but holding on to existing customers is crucial. After all if existing clients

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are satisfied they will help in acquiring new ones by spreading the news of your

outstanding customer services. Take a look at these statistics:

Repeat customers spend 33% more than new customers. Referrals among repeat

customers are 107% greater than new customers.

It costs 6% more to sell something to a prospect than to sell that same thing to a

customer.

So you can see the need for a consistent and committed customer support service that

will nurture and strengthen this bond. Some of the main problems customers have are

of unresolved complaints, pricing issues, competitors having better offers, or they just

feel you do not care enough. One has to be constantly tuned in to a customer’s needs.

Determining what they want is an important factor in organizational success. Since

the market is in constant flux, one needs a consistent and committed approach in order

to gauge and be in touch with the changing whims of a consumer.

But what if customer care is not one of your core activities? You may lack the

expertise, resources, and finances to ensure good customer services. Outsourcing to

competent and dedicated customer care professionals is a great option and the path

that many global companies are taking.

The Need to Outsource Customer Services

The fact that there needs to be an intense focus on customer care is indisputable.

Acquiring new customers as well as keeping existing clients satisfied by anticipating

their needs can only be done through good customer service.

Outsourcing, after all, offers a convincing case for ROI (Return On Investment),

minus a lot of the risk inherent in setting up a complex operation that is not a core

competency.

India is becoming an increasingly popular location for outsourcing and one can be

assured that there will be professional and highly qualified people handling your

clients and providing good customer care service.

Fears of Outsourcing Customer Services

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Outsourcing can invoke certain fears, doubts, and anxieties pertaining to different

things.

Culture, Skills, Competency

Working with people from a different country who are not familiar with the

particulars of your culture can seem to be a problem, In India there is a large pool of

people who are fluent in English and even though there may be some initial problems

with accent or different terminology, these supposed obstacles are overcome during

the intensive training that customer care professionals have to go through in order to

be a part of customer contact centers. People employed in the contact centers are well

educated, a minimal educational qualification being a college graduate. India has

state-of-the-art contact centers, high availability of infrastructure resources, and

liberal government policies on Call Centers.

Is it actually cost effective?

Yes! Outsourcing your customer service needs to India will not only ensure you of

quality customer care but also your cost savings could be as high as fifty per cent!

Outsourcing creates a layer between company and customer.

Conventional wisdom traditionally has held that any activity important enough to

have an impact on productivity – be it customer care, distribution, transportation, or

manufacturing and assembly – is best performed, or at least managed, in-house. But in

the last ten years, this belief has proved to be incorrect. Most companies now

outsource their logistics, distribution and transportation operations. And, increasingly,

many companies have chosen to outsource their manufacturing operations, especially

if they do business on a global scale. Now, the same phenomenon is catching on in the

customer care industry.

Technology has become so advanced today that one does not have to be physically

close to actually have access to data or build relations with one’s customers. Whatever

information and knowledge your offshore customer contact centre has is immediately

accessible by you. There is no impeded access to any sort of data.

Besides, if one does not have the resources or finances to undertake customer care at

one’s own company, it is a wiser option to outsource to a company that can

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completely focus on just this aspect of your business. This focus will make sure that

the quality of your customer services improves. We do not simply act in the capacity

of a facilitator or manager, but will be part of your team, always staying in the process

and this interaction makes sure that there is a seamless relationship between you, your

vendor, and your customers.

Customer Care Services

There are various ways of improving your relationship with customers and they can

all be successfully outsourced. Depending on your needs you can choose what sort of

customer support service you need.

Customer Care Services include:

Telemarketing/Telesales

Customer Support

Order Taking

Customer Service

Product Support

Technical Help Desk

Collections

Market Research

Outsource Inbound Call Centre Services

Customer support has become integral to organizational success. It is for this reason

that Call Centers have carved out a niche for themselves. In a world of ruthless

competition, survival is the keyword-which involves not only a vibrant and dynamic

attitude while carrying out business but also ensuring a flawless customer support

service. This is why the need for an inbound Call Centre service is inevitable.

How can an Inbound Call Centre in India Enhance your Business?

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Let a state-of-the-art inbound Call Centre in India handle the phones. Every missed

Call can be a missed opportunity. Whether you need to answer 100 calls in a day, or

10,000, you will find an inbound Call Centre to be a professional and cost-effective

extension of your business. The customer support agents in an Indian inbound Call

Centre services will cater to your customer support needs and an answering service

will also allow you to be confident when you are away from your office and not worry

about your business; Knowing that your calls are being answered properly,

professionally, and courteously. Ensure the satisfaction of today’s demanding

customer, through an Indian inbound Call Centre service.

What are the Advantages of Outsourcing to an Indian Inbound Call Centre?

An Indian inbound Call Centre service can offer communication services specifically

designed to maximize the efficiency of your direct marketing efforts or to be a part of

your technical support team.

They will work together with you as a partner, building a strong, successful long-

lasting relationship with your customers.

What Benefits can an Inbound Call Centre in India offer?

An inbound Call Centre in India can offer:

Skilled, professional, customer support and technical service representatives

Improved market coverage

Faster ramp-up, launch, and roll-out of new campaigns

Experience with programs similar to yours

Rapid response to market conditions

Account management expertise

Enhanced reporting capabilities

Market testing capabilities

Market testing capabilities

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Remote call monitoring

Why not just have answering Machines to answer Queries?

Answering machines or voice mail can be perceived as cold and impersonal. Live

telephone answering services like inbound Call Centers give you amore professional

image. Statistics show the percentage of hang-ups on answering machines is

significantly greater than a live answering service.

CallCenter Outsourcing-Financial Implications

Call Centre outsourcing is proving to be one of the most successful ways to increase

cost effectiveness. Companies like GE, American Express, Sprint, Dell, AOL, and

Amazon illustrate this pattern. After trying Call centre outsourcing to lower cost

locations like India, these and many 0others Fortune 500 companies have improved

cost effectiveness by up to 50 per cent! Moreover, they have also improved the

quality of their customer support and satisfaction.

3.40 Call Centers in India

In order to meet the growing international demand for cost-effective, customer-

oriented Call Centers, many organizations worldwide are outsourcing these services

from locations like India. India has intrinsic strengths which can make

A booming IT industry, with IT strengths recognized all over the world.

The largest English-speaking populations after the USA.

A vast workforce of educated English speaking tech-savvy personnel-a boon in a high

growth industry faced with a shortage of skilled workers.

One company in India proposes to harness the high-quality technical support available

here by hiring 300 PhD’s to provide very high end consulting through video

conferencing telephone. Given these advantages, India could build a $ 17 billion

industry by 2008 according to the NASSCOM McKinsey Report.

How large is the Call Centre Industry in India?

There are 25 CTI-embled Call Centers and 300-500 non-CTI call centers in India.

British Airways’ subsidiary employees about 750 people and is expected to hire 800

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more, while GE has 10000 personnel at its Gurgaon facility. There are others like Tata

Consultancy services Wipro spectra mind, HCL technologies ltd. Sutherland, global

services and all sec technologies ltd;

Additional Issues in Call Centers

There are many other issues that have to be planned for when managing Call Centre.

A few of these issues are listed below:

Call center noise hazards

Planning for failure of equipment

Need for flexibility in meal-times and washroom needs

Needs for job variety and training

Job exhaustion and stress

Staff turnover (high attrition rates are common in the CallCenter

Research by the UK’s Health and safety Executive showed 30 per cent of call centre

employees interviewed claimed symptoms of acoustic shock. Potentially this suggests

that 300,000 UK operators may be acoustic shock victims.

Variations on the Generic Call Centre Model

The various components in a call centre discussed in the previous sections are the

generic form of a call centre. There are many variations on the model developed

above. A few of the variations are listed below:

1. Remote Agents: An alternative to housing all agents in a central facility is to

use remote agents. These agents work from home and use a Basic Rate ISDN access

line to communicate with a central computing platform. Remote agents are more cost-

effective as they don’t have to travel to work; however, the call centre must still cover

the cost of the ISDN line. VOIP technology can also be used to remove the need for

the ISDN, although the desktop application being used needs to be web-enabled or

VPN is used.

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2. Temporary Agents: Temporary agents are useful as the can be called upon if

demand increases more rapidly than planned they are offered a certain number of

quarter hours a month.

� Virtual Call center: Virtual call centers are created using many smaller centers

in different locations and connecting them improves service levels.

� Interaction Centers: As call centers evolve and deal with more media than

telephony along, some has taken to the term, “interaction centre” Email, Web callback

and many more are gradually being added to the role.

Criticism of Call Centers

Criticisms of call centers generally follow a number of common themes:

From Callers:

Operators working from a script

Non-expert operators (call screening)

Incompetent or untrained operators, incapable of processing customer’s requests

effectively

Overseas location, with language and accent problems

Automated queuing systems

From Staff:

Close scrutiny by management (i.e. frequent random eavesdropping on operator’s

calls)

Low pay

Restrictive working practices (i.e. there aren’t much spaces for personal creativity

since many operators are requests to follow a pre-written script)

High stress: A common problem associated with front end jobs where employees deal

directly with customers.

Poor working conditions, (i.e. poor facilities, poor maintenance and cleaning,

cramped working conditions management interference).

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As detailed above none of these are inherent in the call center model, although many

companies will experience some or all of the above while implementing a call centre

approach. As the science suggests, done properly, a call centre can offer the quickies

route to resolution of customer queries, capitalizing on the ready availability of highly

skilled and intelligent people in some area.

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REFERENCES

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