Pakistan BPO industry

Pakistan has a very small BPO industry compared with its neighbours from India. The country is blighted by a reputation of instability which has destratced foreigh investors in all industries including BPO. This article looks at what is happening in Pakistan and what the future holds.

Historians in Pakistan noted with excitement the dawn of the Information Technology revolution and then cringed with helplessness as it went past us. Universities churned out thousands of IT engineers and programmers. Most of them are now working in sales or local call centers. As the Business Process Outsourcing (BPO) industry made waves in India, changing the lifestyle of people in Bangalore and other cities, people in Pakistan watched with optimism that maybe just this time, we will get some where. But this too did not materialize.

The National Association of Software Services and Companies (NASSCOM) in India points out that “the motivating factors behind making India the great BPO/ITeS destination include strong quality orientation among players, ability to offer round-the-clock services based on the country`s unique geographic location, positive policy environment which encourages investments and a friendly tax structure, which places the ITES/BPO industry on almost equal footing with IT services companies”. By the year 2008, the ITES- BPO sector is expected to employ over 1.1 million Indians, with its sales expected to touch an amazing 21$ to 24 $ billion dollars. Now compare this scenario with Pakistan. Government in Pakistan has given amazing incentives to this sector. The cost of bandwidth has reduced to a very low rate over the last 5 years. We have the same geographic location, positive policy environment and, yet with all that, still in 2007, international companies are (investing in)/discovering new markets in Ireland, Philippines, China and Egypt. Pakistan is nowhere in sight.

According to a report released in January 2005 by the Pakistan Software Export Board (PSEB), there were more than 110 call centers in Pakistan employing more than 2300 agents. Most of these operations have been setup within the last two years, and they have generated an estimated $50 million. Things have not improved much in the last 2 years.

This article aims to discuss the problems and the challenges which made Pakistan unable to appear anywhere on the map as a preferred destination for the BPO sector, whilst people with the similar abilities across the border have made great impact by intelligently taking the lead and investing in this lucrative sector. 

1. Lack of Leadership:

Time and again we have seen organizations jump on the band wagon of technological revolution before they had a chance to do any serious thinking on developing a vision or come up with the metrics to identify if they are on the right track. This lack of vision or leadership is the biggest challenge of all for the outsourcing centers we have in Pakistan. Other than few BPO companies (and we have very few of them, not more than 100, as per a recent survey done by PSEB). Most call centers in this country are not the prime business priority for their owners. Despite this we have some ‘success stories’, if one can use that term in Pakistan! Companies like TRG, Ovex Technologies, Touchstone and Voxel to name a few. People get into this business not to establish a brand name like we have seen in our neighboring country, but to make a quick buck, and if the going gets tough, they simply move out. The entrepreneurs investing in the BPO industry are in it for short-term returns. They lack any long term strategy, exposure or experience to deliver the goods.

2. Lack of Human Resource

 Its time we take our heads out of the sands, and admit to the fact that we don’t have the talent required to work in the Information Technology enabled Services (ITeS) companies. Entrepreneurs and staff working in the ITeS sector need a significant investment in training in order to be able to succeed. We have heard the slogan `We have the best talent` so many times, that one wants to almost believe it. But ask any CEO of the BPO or International Call Center, and he will tell you his biggest fear is not losing customer (ok, that fear is still there), but the availability of human resource if he gets any project. The initial estimates made by TRG that Pakistan has 1.6 million English speakers turned out to be inaccurate. TRG however made lot of effort into training and developing the resource for call center, but obviously this needs the help and resources from the state. There is simply not enough number of people equipped with the skills to/possessing the skills to work in call center industry.

3. Training and Development

 When there is shortage of skilled people in the market, the training and development costs go up. Ideally, someone with a graduate degree, or masters in business administration should be able to identify his / her role as a customer service person. But this is not the case. For something as basic as politeness needs to be taught to the new hires and it takes 2-4 weeks for basic customer service training. Universities can surely help in this by adding one more module on the MBA program. The lack of training and development has made another kind of business mushroom, which is training for call centers. The trend has gone unchecked with lot of people paying huge amount of money for courses aimed at preparing them for call center related skills training with a promises of lucrative jobs, and not getting anything in return. All these trained and skilled individuals still have to go through the training module prepared by their employers, meaning their money and time was wasted. There is a need for PSEB to step in and design and check the quality of training provided to make sure people don’t waste time and money. A situation is even grim when it comes to training for Team Leaders / Supervisors in the call centers. There is not a single institute in the country which offers such trainings. Team leaders are the difference between a well-managed, successful team and poorly managed, unsuccessful one. They are the difference between a good company and a mediocre one. Due to lack of training facilities for these key positions, most of the call center employees lack that motivation and the result is mediocre service. Training is also required for those who want to get into the BPO sector. There is a strong need to train the entrepreneurs on the challenges like Data Security, redundancy in Technology and most importantly the quality service delivery. Institutions like PSEB and PASHA can help by starting focused trainings on these areas.

4. Career Planning

Most people, at some point in their careers, experience dissatisfaction at the job. Some call it job burnout. This is specifically serious issue with BPO or ITeS related jobs. Most universities don’t have career planning department. It means most of the students, when they graduate lack sense of direction. They simply enter the market with the purpose of getting a job. Any job! In the absence of any direction, they also keep changing jobs, losing total track of what fits their abilities. Universities need to take up the issue of career counseling or Career Planning more seriously, guiding the graduates on what is available in the market. The BPO companies need to make more job available to the employees in various support functions instead of hiring from outside. Job rotation increases the employee retention in BPO or ITeS companies. In the BPO sector, this trend has as very negative impact. People join this industry as a part-time or temporary employment. And without putting any serious thought into the possibilities of growth in this sector, they end up moving to other sectors or even from one call center to another, for small increments, and call center loses a good trained resource. Some even go as far as opening their own small 3-5 seat call centers which die down in 1-2 years as the young restless entrepreneurs find it hard to sustain these business ventures. This takes us to the next problem which is paralyzing the industry.

5. Unsustainable business

ventures Mostly people who go into call centre industry are not familiar at all, or have some experience of working in the call centers. They are not aware of the problems, technicalities or client expectations. This makes their business ventures unlikely to be successful for a long period of time. ITeS are capital intensive. Starting from a small one room call center, it is hard to sustain the growing financial needs of the business. Lot of call centers became unsuccessful when the people working for the company decided they could do that too! They left the companies started their own small business but with their lack of any in-depth knowledge of BPO market and growing focus on quality went out of the business in a year. They also made their previous employees go out of the market too.

6. Coordination between Academia and Business

A lot has been written in the past on the lack of interest shown by the academia and business forums to join hands and come up with the focused and organized initiatives to take advantage of the new business trends. HEC has too much on its plate, so it would be fair to expect the public and private universities to take the initiative and sit with the leading business forums in the country to formalize the plan to root out the joblessness by investing into these ventures. This will help both institutions and students/businessmen. What can be done? (It’s still not too late!)

1. Awareness events for business owners

Government needs to keep doing what it has been doing in the past. PSEB has provided great opportunities and even offered subsidized training program. But a more thorough study is needed to find out what has made all those efforts go into waste. The resources that the state has can be better utilized by providing quality training and awareness seminars which will be focused on bringing the BPO business to Pakistan. A good initiative like COPC training offered by PSEB needs to continue and it can be seen as a test case of how good initiatives with bad follow ups can ruin the money of taxpayers and efforts of companies. COPC training was offered, delivered and then call centers were shortlisted for the certification. But all this happened without talking to COPC headquarters and in the end people realized that the route they have taken is counter-productive and all the companies dropped the idea of certification. People who are in charge at PSEB need to look at this case and continue to push for these performance management standards for the local players, this time avoiding the problems they faced the first time. PSEB also need to add middle level management training for Call Center Operations. We have absolutely no training facility for middle level management in ITeS/BPO sector. This includes Team Leads / Supervisors and Managers. In any business these middle level managers drive growth and customer satisfaction. The existing companies will definitely benefit from implementing these global standards and it will also help them attract good business from Fortune 100 companies.

2. Encouraging Export Houses to take up Pakistan`s case for BPO

In India, success of BPO sector is primarily the result of great IT revolution. In Pakistan, the top software houses must make effort to get into this field. And not just software export business, Sialkot and Faisalabad can become what the Bangalore is to India. The established business houses that are into export business must be invited and encouraged to look into the amazing potential of this industry. It will have enormous impact, and eventually the people will benefit with increased job opportunities, better training facilities. Pakistan Software Houses Association (PASHA) can play very important role by aggressively marketing the idea to the members by announcing 2007 as ITeS/BPO focused year for business development and co-ordinate with PSEB to help make the process of setting up BPO centers at software houses easy and simple.

 3. Forget Call Centers, Focus on BPO!

To many people, BPO means Call Centers. We need to have more seminars on the whole BPO work. BPO does not only mean Call Center. It includes so much more! Companies are outsourcing Financial Functions, Legal and Medical Transcription, Content Development, Data conversion, Network Support, Data Processing, Data mining and Quality Auditing. And that’s not all of it. Call centers contribute a large share to the revenue of the Indian BPO industry. About 70% of the BPO industry’s revenue comes from call-centers, 20% from high-volume, low-value data work and the remaining 10% from higher-value information work. In Pakistan, we will have to change our strategy. We need to focus more on high-volume, Low Value Data work. We have the right Human Resource for this kind of work. We need to come out of the Call Center mindset.

 4. All is not lost!

In the last 5 years, we have seen some progress. One notices all the people who joined international call centers in the last 4 0r 5 years are now taking up management positions in the local telecomm contact centers. And yes, the customer service is great too. So now we get to hear a polite person on the other end who wants to solve the problem efficiently because his or her KPI’s depend on the quality of his/her work. It also means not many good projects and jobs are in the international call centers anymore.

The maturity of call center industry can be noticed by the fact that few local cellular service careers have outsourced their own call centers to the companies who are serving international clients. Prime example of this is Paktel and Instaphone outsourcing their call center solutions to Ovex Technologies and PIA outsourcing their contact center to NCR. And the results are impressive. This is making more companies follow the footsteps. So we have the processes right, the service delivery is great but for international business the talent is scarce.

With all the IT parks opening up around the country, we need to work more closely going beyond our self-interests to fill out these big glass buildings with trained and skilled BPO workers that we have in this country.