India Is Still the Popular Choice for Call Centers

Recent threats of war between India and Pakistan may have steered tourists clear of the region, but businesses are still setting up shop in India, as two announcements this week attest. Tuesday, J.D. Edwards announced that it plans to open a development center in Chennai, through an agreement with Covansys. And on Monday, ClientLogic announced that through a partnership with ITC, it will open a multichannel contact center in Bangalore. According to J.D. Edwards, the India development center will supplement the company's U.S. development teams, and focus on quality assurance, testing, and maintenance. By shifting these responsibilities J.D. Edwards says it looks to not only increase its testing capabilities by 30 percent, but also redeploy its internal testing and maintenance team to strategic, new software development. "We need to make smart decisions that return the most value for our shareholders," Bob Dutkowsky, chairman, president, and CEO of J.D. Edwards said in a company statement. "Our partnership with Covansys allows us to immediately add talented developers to our pool of engineers to rapidly deploy new products, ensure software quality, and reduce overall costs." ClientLogic says it plans to grow the new 450-seat center it has opened in India to 1,500 seats by year's end; the company says it will handle offshore customer care for three or more international Fortune 500 companies by the end of the second quarter of 2003. This news comes fast on the heels of a report by research firm Datamonitor that claims that political and economic instability in India has American companies choosing Canada for offshore call center development. Also, travel considerations to Canada are minimal, which can be a comfort as many companies have shied away from international travel following 9/11, the study says. Other research, however, shows that India remains a top choice in offshore call center development. According to McKinsey and Co., 203 of the top Fortune 1000 companies outsource IT and IT-related service business to India. A recent Gartner Dataquest survey of 917 companies found that 40 percent of respondents have more than $1 million earmarked for upcoming offshore service initiatives, 70 percent of which will take place in India. Sheryl Kingstone, CRM program manager with the Yankee Group, agrees that India will not see much of a loss of development action. "In this economy it would be really hard to justify an increase in expenses because of political concerns that are not completely solid," she says. "Some companies might not add new services there, but they certainly won't cancel their existing contracts."