Optus' passage to India

commentary Optus' chief executive, Paul O'Sullivan, has stoked the fires of the offshoring debate by announcing the Singapore Telecommunications-owned unit would establish call-centre operations in India.The company's new boss said the Indian call centre -- expected to be operational by mid-to-late 2005 -- would handle a range of functions, including Mobile and Consumer and Multimedia product transaction and "selected" consumer customer inquiries.

commentary Optus' chief executive, Paul O'Sullivan, has stoked the fires of the offshoring debate by announcing the Singapore Telecommunications-owned unit would establish call-centre operations in India.

The company's new boss said the Indian call centre -- expected to be operational by mid-to-late 2005 -- would handle a range of functions, including Mobile and Consumer and Multimedia product transaction and "selected" consumer customer inquiries.

O'Sullivan's move -- greeted with predictable anguish by the Communications, Electrical and Plumbing Union (CEPU), who said Optus' domestic contract call centre workers in regional centres were now becoming extremely nervous about their fate -- reinforces that offshoring is here to stay.

Unless the federal government adopts a highly protectionist stance (highly unlikely from either of the major players in Australian politics, but absolute anathema to the current government), the movement of call centre and other positions from Australia to lower-cost centres such as India is poised to accelerate. The pace of this acceleration is likely to ebb and flow a bit depending on external conditions (smart executives are hardly likely to make decisive offshoring moves during the next federal election campaign, for example, for fear of destabilising the government's chances of re-election), but the overall trend is already established. However, this is not to say the transition is necessarily going to be an easy or even successful process for every company which attempts it. While the cost side of the equation is alluring to executives with one eye on the bottom line, the experiences of companies such as Dell provide a cautionary tale. The personal computer maker -- whose name has been a byword for customer service -- has received complaints this year over its Bangalore call centre operations. Chief executive Kevin Rollins has publicly denied the call centre is just a tool for reducing Dell's US payroll and said the company has both business and moral obligations to be close to its customers -- wherever they are. The offshoring of positions is, like any major change, no light decision for any executive to make and the transition must be carefully managed to avoid damage to a company's brand and customers.

While O'Sullivan made a lot of the right noises in his carefully-worded statement (noting, for example that the planned Indian centre would initially be 150 seats in size, a small fraction of the 3,500-strong permanent call centre workforce in Australia and stating that the company "believed it would always be the case" that Optus had "several thousand" Australian-based call centre employees), it also makes clear that offshoring is a major plank in the company's strategy for the next decade. Optus is no doubt planning to make sure that the transition involves as little disruption to its customer base as possible, negating potential early resistance from users of its services. It seems the CEPU's complaints will be in vain.

What do you think? Is call centre offshoring a positive step? Is Optus making the right move? E-mail us at edit@zdnet.com.au and let us know, or use the talkback option provided below.

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