BPO: Offshoring Comes Full Circl!

Over the last six months, the UK has been in the news for all the right
reasons. First, it was the aggressive expansion plans of HCL's BPO in Northern
Ireland that was making news. After that came the opening of a second call
center by Convergys in NewCastle. More recently, LogicaCMG announced the opening
of a huge center in Wales while Stream opened another center in Dublin.

But why has the UK found favor amongst BPO companies all of a sudden? Says
Sumit Bhattacharya, executive VP, Marketing & Strategic Planning in HCL BPO:
"Because there is out there. We get a lot of business from the UK market
and clients want a near-shore location. It enables us to provide clients with a
risk-mitigation strategy that has an offhsore and onshore combination.
Geographically, Ireland has always been a nearshore location for the UK, and an
offshoring destination for the US market. The work ethic of the people is
excellent, we find excellent trained manpower, and the government has been very
supportive."

HCL
BPO set up its presence in Belfast way back in 2001 when it acquired BT's
Apollo contact center with approximately 340 people. That number has since been
scaled up to 2,000 people in Ireland today. In December 2004, HCL made another
acquisition at Armagh, Ireland, by taking over AnswerCall Direct. Today, HCL BPO
is by far the largest player in Ireland and the government has also given it a
grant of £900,000 for creating more jobs in the region.

The centre has now become a hub for HCL BPO's operations in Europe, with
six European language capabilities and nine customers, apart from BT.

Similarly, the second call center opened by Convergys at Newcastle is
strategic to the company's European operations. Stephanie Wilson, VP, Contact
Center Operations, Europe, says: "Our largest operation in Europe is at
Newcastle, supporting a number of European countries from there. We have about
700 people supporting customers in 17 languages with half our employee base
offering multi-lingual support.

Newcastle is a key location for Convergys. Not only can we draw on a large
pool of skilled professionals locally, but Newcastle's reputation as one of
the most vibrant cities in the UK, along with its high standard of living, also
makes it attractive for staff from elsewhere in the country and from continental
Europe."

The fact is that setting up small call centers across the continent is not
viable, and therefore, Convergys follows a strategy of consolidating people in
regional centers to cater to the demand of multi-lingual support.

Logica CMG, which has opened new offices in Bridgend, Wales, will use the
center to provide blended outsourcing services for services to the UK and
European market. The center is expected to staff 750 people by 2007. Logica
wants the India and Wales location to complement each other because simply
offshoring to Bangalore would create large benefits but have a big risk factor.
The Wales center would be used to hedge that risk.

A major reason for companies to look at the UK with renewed interest is that
the government has been wooing the industry aggressively. At the same time,
there is an imperative to serve UK customers. Says Phil Telfer, sales and
marketing director at Ventura, "Don't forget that UK is a huge market,
and there are customers who do not want work to be offshored." For
instance, companies like Northern Rock, a bank providing mortgage services based
in Leeds, is against offshoring of jobs.

Balaka Baruah Aggarwal