The Call Centre Value Chain
(CGS)
The call centre value chain THE entire spectrum of the remote-processing ladder can be divided into following segments. At tier one is data conversion, at tier two rule set processing, at tier three is decision-making or problem solving. After this comes direct customer interface at tier four, and finally, expert knowledge services like financial accounting services and remote applications, network or technology maintenance. The margins move up as one moves up each step in the value chain. Most call centres in India charge between $15-$25 an hour per seat, but the fees mark up depending on the nature of the job. According to Koita, the margins in the case of a well-run call centre can be in the range of 25 per cent per annum. ``They are better when you have a handful of clients, rather than one dedicated client, as the latter increases your dependency on that client who can therefore negotiate a better rate.'' This is where the role of the middlemen and the smaller players comes into picture. Large US companies give the contracts to large US remote processing companies, which typically run centres with 10,000 or 20,000 seats, and above. So far, much of this business that has come to India has come through the latter wanting to outsource some of its own work, mostly on a test basis. Contacts obviously play a big role in wresting the business as most companies can?t afford to market themselves. ``Large outsourcing companies like TrueDial, Convergys, Teletech and Bechtel and others run huge remote processing businesses. Faced with a demand to lower the per seat cost, they are willing to outsource some of this business to other destinations provided same quality is maintained. When Indian consultants contact them with a guarantee for both, they are willing to outsource their business,'' says Pankaj Garg of Netspace. In last one year, Garg alone has got 500 seat business to several small companies in Delhi and Mumbai. Small call centre sit at the bottom end of this chain. The rates per seat get stripped further with each link pocketing a portion for the favour (read business). ``Under pressure to recover the investment and also due to lack of understanding about the market, an aggressive band of smaller players are quoting rates like $10 or $12, little realizing that at such rates they will either go in the red, or make wafer thin margins of 8 to 10 per cent,'' points out Roy. Smaller players having 50 or 100 seats, who have made the investment but have been unable to bag contracts, are even willing to offer free 50-seat pilots for three months to their clients in their quest for larger business. This, as well as the low remunerations like $10-12 per seat, only pushes their breakeven point farther. ``When people cannot market themselves, they have to depend upon the consultant?s services and sometimes offer small pilots free of charge. Let us not forget that the US customer is still giving them a real database. And no company today has the time or willingness to risk its database,?? points out Pankaj Garg.
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