After the migration to the Philippines of some American Express standard 24-hour support, the company is testing similar operations in India, and buyers are raising questions about its service quality and the savings it has achieved. Orbitz last week asserted it has no plans to service corporate travelers from its operations in India. WorldTravel BTI had said it wasn't going offshore, then said it was, and last week offered no comment.
At a time of growing national awareness that the service sector is shipping jobs abroad, travel vendors are not the only parties that are a little iffy about attempting to serve corporate travelers from around the world. An informal poll last week of 43 mostly large-firm corporate travel buyers found they were split on whether corporate travelers can be served well by call centers in India.
While some corporate travel pioneers are investigating the new turf, the Association of Corporate Travel Executives
(see story) is pushing for regulatory changes that could help make the business case. Commenting on ACTE's lobbying of the International Air Transport Association, Asia/Pacific vice president and regional head Mike Molloy of Credit Suisse First Boston this month said, "We've seen models where the service industry is centralized in the Philippines, India or elsewhere. Corporations can benefit from this centralization in travel like they do in the back office."
American Express and British Airways were among the first companies to move back-office work to India in the mid-1990s, but they and others are quick to note that travel is something different. Some buyers indicated they are more comfortable with charge card service moving offshore than reservations and en route assistance. One said that even though American Express offered her a bigger rebate to help allay concerns about overflow card service calls going to India, data security is a bigger concern.
While one travel buyer cited her own political "concerns that everything is moving to India," another said, "Just because they are in India wouldn't be an issue—it is the service that the corporations receive. My understanding is that the people servicing the call center are highly educated and knowledgeable."
Another buyer reported that Amex's response to her relay of traveler complaints about long waits and discomfort with accents in the 24-hour service was to offer a "gold service" that she said guarantees they are answered quickly and in the United States, likely Detroit or Houston.
An American Express spokesperson confirmed that $4 is the per-call difference between standard and gold emergency services, and that the latter offers higher service standards and a money-back guarantee. Gold service is less than two years old. The spokesperson also said Amex is testing the viability of bringing to travel the globally distributed customer service setup it offers on card and also is taking some new approaches for managing customer service via higher response rates through surveys. A "limited portion" of standard-level emergency travel call center services, meanwhile, has moved to India.
As part of its Rosenbluth International acquisition, Amex is bringing onboard Joe Terrion, formerly vice president of sales, marketing and client services for Upstream, the former Rosenbluth subsidiary that provides customer service to Orbitz and others. Early this year, Terrion said, a joint venture with India's Lawkim Private Ltd. enabled Upstream to employ lower-paid agents to support Orbitz.
"In 2003, we began routing our e-mail communications to India, where cost of labor is low and education and service levels are high," Orbitz said in a document filed last week with the Securities and Exchange Commission. "In late 2003, we plan to route up to 10 percent of our service calls to a call center in India in order to assess potential savings in our per transaction customer support and fulfillment costs." Orbitz officials last week said its corporate travel service would not be included.
Still, the desire for more consistent, round-the-globe service appears unlikely to wane, and supporters are not wavering in the face of growing political and media backlashes against using offshore labor amid domestic concerns about a "jobless recovery." Among them is India's National Association of Software and Service Companies, which this month said, "Apart from the telecom and banking sectors, the travel industry is emerging as the biggest contributor for the domestic call center industry." An Indian firm called Daksh E-Services this month announced its "foray into the travel and hospitality vertical," using travel experts and a technology-driven approach. "As the offshoring value proposition gets broadened, Daksh believes there will be significant growth in the travel industry," said senior vice president Pavan Vaish.
"The U.S. continues to be the biggest market for the Indian call center industry, particularly the customer care segment," according to a column published this month on TMCnet.com by New York-based PSi Inc. consultant Ranjit Shastri. PSi research indicated that such IT-enabled services as call centers, customer support centers and Web site services generated revenues of $2.3 billion in India for the year ending March 31, 2003, nearly 60 percent higher year over year. PSi also suggested that figure could exceed $15 billion annually before the end of the decade. PSi said nearly 400 call centers operate in India, employing 171,000 people.
"Entry barriers to set up a call center in India are low, including salary levels at around $280 to $300 per month, per person," PSi said. "As a rule of thumb, it costs 40 percent to 60 percent less to operate a call center in India than in the U.S."
Shastri warned, however, of potential regulatory action in the United States to combat U.S. job losses. Also, he said, there are "concerns about India's proximity to sources of instability, such as Afghanistan and Pakistan."
According to BusinessWorld information cited by PSi, the largest Indian call center and business process outsourcing firm in 2002 was Wipro Spectramind, with $41 million in sales and 5,000 employees. Parent company Wipro Technologies of Bangalore, India, at the start of the year completed its acquisition of Spectramind, which included $3.5 million paid in September 2002 for a stake owned by American Express Travel Related Services.
Wipro has paid more than $100 million for Spectramind, which the Hindu Business Line said was founded by a former American Express official, and counts Amex and Dell Computer among its customers. According to Wipro Spectramind, its call center operations for Delta Air Lines are saving the carrier $12 million to $15 million annually.