Indian domestic CRM outsourcing expected to expand

While historically, the bulk of
attention has been paid to India's status as an offshore contact
center giant, most recently enterprises have noted the commercial
possibilities associated with onshore domestic href="http://dqchannels.ciol.com/content/space/110073106.asp">CRM outsourcing,
designed
to service Indian end-users. A newly-published Ovum report
highlights this potential, while adding a dose of realism in terms of
the operational obstacles that prospective CRM outsourcing investors
may face when entering this national market.

Ovum's recent report 'Profiting in
the Indian Domestic CRM Market' highlights the increased activity
by third-party call center vendors in the rapidly-growing onshore
market in India. According to Ovum's projections, India's
domestic growth in CRM outsourcing will drastically eclipse that of
offshore over the coming five years. Much of this expansion comes due
to the increase in the size of India's middle-class, which is
driving consumption of non-essential goods and services. This in turn
is forcing enterprises to look for outsourcers in order to help
maintain margin levels and customer service quality.

"The Indian consumer is no
different to that of North America, Western Europe or Australia,"
stated Peter Ryan, Report Author and Ovum Lead Analyst. He further
added, "They are becoming much more conscious of service levels
that they receive, and are willing to change vendors if interactions
are not optimal. Enterprises in India are aware of this fact, and are
working with CRM outsourcers as a means to delivering high quality
service without taking any increased overhead costs."

One conclusion of this report that was
abundantly clear was the importanct role that India will play in the
coming years, as the total size of the consumer class increases.
Currently, India's middle-class is estimated at between 200-300
million people, nearly equal to the entire US population at the
high-end. As this segment grows, so too will its demand for products
and services. According to Ryan, CRM outsourcers should position
themselves as the partners of enterprises during this period of rapid
growth. "The Indian consumer-class is expanding at a very rapid
rate, and for many enterprises it will be hard to keep up with the
volumes of calls that they will be fielding from end-users. CRM
outsourcing is an ideal way for firms across verticals in India to
absorb new customers and their queries, without taking on the cost of
hiring agents and buying the associated technologies and commercial
properties," said Ryan.

However, vendors who are looking to
penetrate India's domestic CRM outsourcing market should be wary of
a number of operational particularities. Possible challenges include,
a large group of languages that require servicing, coupled with lack
of middle management talent in smaller centers. "The Indian domestic
contact
center environment is completely different from its offshore
counterpart. Costs are much more squeezed due to tighter margins, and
it is simply untenable to house domestic work profitably in cities
like Mumbai or Delhi. Plus, with the large number of languages
requiring servicing, firms are likely to find themselves forced to
set up several contact centers in various regions around the
country," Ryan concluded.