REMOTE PROCESSING: Enter India

With
distance being almost dead and geography all set to become a
history, India is poised to develop into the largest offshore
remote processing centre in the world. The global trend among
companies is towards outsourcing non-core areas. This has
spawned a whole range of outsourcing of remote processing
services to India. Services include medical and legal
transcription, data processing, HR, remote customer interaction
(call centre), data digitization and GIS, back-office operation,
revenue accounting, insurance processing, and animation. This
has opened a huge employment opportunity in India besides the
valuable foreign exchange that will accrue to the national
exchequer.

Why
India?

The unbundling of the largely labour-intensive activities is
driven by cost advantages, making India the hottest outsourcing
destination world-wide. Setting an offshore remote processing
centre in India and executing the project involve a cost savings
of about 40 percent. India has the additional advantage of being
the second largest English-speaking IT manpower in the world.
The improved satellite-based telecommunication network, which
has enabled almost instantaneous high-speed transfer of voice
and data, has been one of the contributory factors. In most of
the centres, the operations are being run on a round-the-clock
basis. The time zone difference is also in India’s favour.
Above all, the removal of trade barriers has added the needed
impetus to the offshore outsourcing services.

What Future
Holds for India?

According to a recent Nasscom-McKinsey report, over the
next eight years, India could corner about 12 per- cent of the
projected $142 billion global market for IT-enabled services.
The study projects that India could be making as much as $9
billion from these services by 2004 and by 2008, it could be
earning $17 billion a year. Addressing the recently concluded IT
Asia conference in Delhi, Prof. Dertouzos of Massachusetts
Institute of Technology said, the total manpower who can deliver
quality back-office work or information services in India is
around 50 million. He has taken into consideration emerging new
services in the field of education, traditional system of
medicine, and counseling.

The Players

Some players were quick to realize the potential and took a
plunge at the right time. These include Innodata Corporation, GE
Capital Services, Healthscribe, Techbooks, and Bechtel. Some
late entrants include some Indian players as well–Usha (ITIL)
and LNJ Bhilwara group, apart from MTC International, iDLX, NY-Dox,
and Air Infotech. As these remote processing services were new
to India, getting experienced manpower was not easy. Initially,
most companies started off by providing training themselves. As
more and more companies started setting up their operation, a
need was felt for trained manpower. This has resulted in the
mushrooming of training centres catering to the specific
requirements.Medical
Transcription

Medical transcription services were one of the firsts to take
root in India. In the US, Canada, and other European countries,
unlike in India, physicians are required by the law to maintain
a computerized records of patient information. Physicians
dictate the patient information, which is converted into a voice
file and is transmitted to offshore centres via satellite links.
It is transcribed and the document is conveyed back to the
hospital. In the US alone, medical transcription industry is
worth about $6 billion and is growing at the rate of 20 percent
annually. As there is a shortfall in terms of medical
transcriptionists (professionals who listen and transcribe the
document), companies are setting up their facilities in
different parts of India. The pioneer in this segment is
Healthscribe India, a 100 percent subsidiary of US-based
Healthscribe Inc., which set up its facility at Bangalore in
1992. Currently, it employs about 1,000 people. Ohio-based
Heartland Information Service (HIS) is another important
player in this field. From one centre, the company in
association with Indian partners has expanded to five centres
across the subcontinent employing about 3,000 people. Says
Jacques Bourgeoise, vice president, HIS, "We are determined
to make Indian subcontinent the largest transcription centre in
the world." The company has also set up a centre in
Kathmandu. MTC (India) expects additional revenue of $10 million
in the next five years from its data division. It also plans to
offer other services like turnkey IT solutions and business
processes re-engineering.

Call Centre

Currently the most happening segment, which has taken the India
by storm, is call centre. Call centre is a customer interaction
service wherein the agent answers to the customer queries from
around the world. India is set to compete against Ireland and
Brazil, where the majority of these call centres is located. As
there is no need of a physical interface between the customer
and the agent–these centres can be set up anywhere in the
world. GE Capital Services was the first to realize the huge
potential and set up the most-talked about centre in India
today. The Gurgaon centre also manages payroll accounting for
many of GE’s units besides processing mortgage loans and
insurance claims. It employs around 1,000 persons and has also
opened a centre in Hyderabad. iDLX, also based in Gurgaon, has
about 200 people and plans to expand it to 1,000 by the end of
the year. The latest entrants are Air Infotech and Netlink who
have a tie up with Cincom. The managing director of Air Infotech,
Rakesh Gupta, says, "We have 300-seat capacity and
plan to expand to 1,200 by the end of year which will make our
centre the largest in the south east asian region." Jaydev
Raja, erstwhile chief of Coca-Cola and Iridium India, is back in
the news with his company Commence Concept. Com. He has tied up
with DCT Systems of the US for a call centre project in India.Data
Processing

Data processing is also making its presence felt in India. This
involves the electronic conversion of source documents
(newspapers, magazines, journals, etc). This is done through
physical data entry or through computer assisted data capture
using Optical Character Recognition (OCR) or Intelligent
Character Recognition (ICR) technique. After converting and
quality analysis, data is transmitted back to the client’s
computer overseas. NASDAQ-listed and US-based Innodata Corp.
with a turnover of $30 million is a pioneer in this field. It
provides Internet and online data conversion and content
management services. It also has an internal software
development which caters to corporate needs. The Noida centre
employs around 1,200 people. According to Ranjit Basu, general
manager (human resources) Innodata Corp., "Ours is the
largest facility in India and we are planning to employ about
4,000 people in the coming months." Techbooks and Apex
Information Services are the other major players in this field.

GIS

India has also become a centre for data digitization and
Geographic Information Systems (GIS) services which is a
computer-based technology that captures, stores, analyzes, and
displays information about places on earth’s surface.
Hyderabad-based Indian Resources Information and Management
Technologies (IN-RIMT) generates information on natural
resources and provide management solutions using advanced
technologies such as Remote Sensing GIS. It has tie ups with
several overseas agencies including Geospace Satellitenbilddaten
GmbH of Germany, Jodian System & Software, Inc. of US.
According to P Subba Rao, managing director, "We provide
total solution to our clients. In this process we extensively
use remote sensing and GIS as important tools to deal with
spatial data sets. Thus, our solutions encompass areas such as
natural resources management, infrastructure development, and
environmental engineering." IN-RIMT, with a turnover of Rs
600 lakh, plans to build up clients in Africa and South East
Asia. Delhi-based Ridings Consulting Engineers headed by
Sain-Ditta Baveja, does ground survey and digital mapping
capabilities through adoption of latest digital cartographic
techniques. His clientele includes British Government, Infoways
(US) besides several Indian agencies. The company did a business
of about Rs 90 lakh last year.The Other Side
of the Story

The going was not so smooth for many companies in the beginning
as the kind of jobs that were offered was new to India and job
seekers were reluctant to embark on a career that had no
precedence in India. Recruitment thus became a difficult task
for most of employers and finally when they did manage to
recruit, training became a major bottleneck. Some of the
companies had to close their shop after massive investments on
recruitment and training. Los Angeles-based Informatix Inc.,
which was one of the first players in medical transcription and
had set up its swank facility at Noida Export Processing Zone,
had to close down after spending crores of rupees for three
years. BLS Infotech’s similar project ran into rough weather
before actually taking off. MTC India, which had planned for
300-seat transcription centre has managed to recruit only 30
persons in the last couple of months. ITIL anyhow managed to get
about 100 persons. The "rumour" that there is huge
money involved in remote processing has led to the mushrooming
companies–big and small. Medical transcription is the most
glaring example. From about three to four players in 1992, the
number today is somewhere between 200 to 300, most of them being
concentrated in southern India. Finally how many will survive,
only time will tell.

India becoming a major
offshore centre for corporate around the world for its remote
processing or backoffice work, has a social angle to it which
cannot be ignored. The remuneration given to the personnel
manning these transcription centres, call centres, and data
processing and other units is far from satisfactory when
compared to their counterparts in the other parts of the world.
They are paid a starting salary of as low as Rs 3000 to Rs 5000
depending upon the nature of work. The data entry personnel are
lowest paid of the entire lot. Call centre agents and trained
medical transcriptionists are paid in the vicinity of Rs 7,000
to 8,000. (In the US, these personnel get paid somewhere between
$15,000 to 20,000 a month). Ranjit Basu of Innodata, however,
feels that the fact that people are carrying on in the
profession for the last three years is an indicator that they
are professionally satisfied. The salary, he feels is in keeping
with the work that these professionals are doing. Virginia-based
Apex Information Services, had to close down its Delhi centre,
employing about 200 people due to labour problems. However, if
these companies who are cashing in on the new opportunity
provided by India have a long-term strategy, they will have to
create assured career paths and continuing education for the
employees.

According to the
Nasscom-McKinsey report–"If India aims to become an
IT-enabled services hub and compete with Ireland, Singapore,
etc., it has to bridge skill gaps and further improve
infrastructure". This the report says require action on two
important fronts–enhancing location attractiveness by
improving infrastructure and increasing people strength by
building the skills.