Pakistan will become major IT power in next 3 to 5yrs.
http://www.nni-news.com/thu/main/main-08.htm
Pakistan fast becoming the next “Hot” place for call centers
ISLAMABAD, July 04 (NNI): Two leading American IT companies Dell Computers and American Telephone and Telegraph are setting up 2000 and 1000 seat capacity call centres respectively in the country.
“Pakistan, due to its large English speaking population and low labour cost in the region has become the next hot place for corporate giants for outsourcing their call centre operations”, the official source revealed to NNI.
Dell computers have already held interviews for hiring staff for their call centre that is likely to start operations by August this year. While the other American firm in collaboration with a local firm will also start operations with next few weeks.
Pakistan is fast emerging on the global IT outsourcing market due to its vast English proficient population, where English as a second language is taught from class I in all schools. Pakistan has one tenth of the English proficient population outside the native English speaking world of North America, U.K and Australia.
According to sources, Align Technology, a California, United States based company is already outsourcing call center operations and graphic design work to a back office in Lahore. There are 500 computer-graphics designers and 150 call-centre operators managing U.S wide orders at the centre.
Queries come both from customers, who call a toll-free number in the U.S and dental-care providers. The latter prescribe the treatment and provide dental imprints, which are rendered into 3-D computer images and used by the graphic designers in Lahore to generate digital models for each individual aligner set.
Along with the Pakistan government, Align co-founder Zia Chishti is hoping to make this a new growth model in his native country, building novel economic ties with the U.S and finally putting Pakistan on the map of the globalizing service economy.
Pakistan has long languished on the periphery of this trend, which has provided jobs in far-flung countries like the Philippines and India. The latter exported $8 billion in remote-sourced software alone in 2000. In comparison, Pakistan’s annual information-technology exports presently amount to no more than $100 million. But Align’s early success has been a touchstone for hopes that Pakistan may be able to get a bigger piece of the pie.
New recruits watch popular television program Friends during their training as customer-service representatives at the company’s call centre in the city. Many may have already watched U.S. culture on local TV and satellite channels, but they still have questions. “A couple of them ask, ‘Is Hollywood like the real America?’,” laughs the company’s call centre manager, John Armbruster, recalling the first group of recruits who went through the program in 2000.
It is apparently close enough for California-based Align, which is pioneering IT enabled remote-services sourcing in Pakistan. Friends is now a regular feature of culture-training at Align’s customer-service centre that handles calls about its product Invisalign, which are plastic aligners, an innovative update on braces for teeth that are nearly invisible.
Over the past decade and a half, falling international-telecommunications costs and low overseas wages have persuaded a growing number of Western companies such as construction firm Bechtel, British Airways and financial-services company GE Capital to source customer-interaction services to remote offices across the globe.
In some developing countries, this has become an increasingly salient and profitable face of globalization. The U.S. consulting firm McKinsey and Company predicts that the world market for remote services will grow to $142 billion by 2008, a 15-fold increase within 10 years.
This has turned Chishti into something of a local golden boy. The company he co-founded in 1997 as a student at Stanford Business School has sparked a bit of a revolution in the U.S orthodontics industry with its Invisalign braces. As the name suggests, its chief selling point is that the braces in question are clear, saving its wearers the stigma inflicted by traditional metal contraptions. Having pulled off an initial public offering in 2001, Align has since steadily ramped up its sales and manufacturing operations, opening sales offices in Europe, Latin America, the Middle East and Australia. In 2001, revenues grew nearly six-fold, reaching $46 million.
Underpinning this performance is a globalized business model. For cost considerations, Align’s braces are manufactured in Mexico through a patented stereolithography process. Remote-sourcing the company’s other activities also saved on staff costs and Chishti settled on his native country as the venue of choice. With a population of 140 million, the labour pool is considerable, and the basic skills are there, believes Align. Indeed, most of its Lahore staff have master’s degrees and speak fluent English, an official language of Pakistan.
But as Align and others have learned, fluency in the global business language, English, is not enough. “We also have to teach them to understand American idioms and accents,” says Mohammed Khaishgi, chief of Align’s customer-relationship management.
“It’s difficult, for instance, for a Pakistani to understand what someone from the Deep South says, particularly if they are speaking quickly. It takes some getting used to.” Which is where Friends comes in handy. “We realized we had to train our staff somehow and having them watch U.S. sitcoms was an easy way of familiarizing them with American culture,” explains Khaishgi.
This kind of training is becoming a must for the remote industry, argues McKinsey. In a study for the National Association of Software and Service Companies in India, McKinsey analysts stress the importance of overseas workers learning to comprehend foreign diction and culturally specific forms of speech, such as forms of address in Eastern countries and polite language in the West.
Align has a lot of catching up to do, acknowledges Armbruster. Other countries are definitely further ahead on the curve, he says: “In India they have boards with weather charts from different U.S. cities, and sports scores. I have two trips to India scheduled this year to do benchmarking.” But insofar as it has set an example for other businesses, Align has been widely feted as heralding a new generation of entrepreneurship in Pakistan.
These are people who have broken new ground in regard to key issues, acquiring bandwidth, training people and acquiring the right technology. Align has established a paradigm, providing elements which others can emulate, says Salman Ansari, adviser to the Minister for Science and Technology.
Align claims that so far it has had no problems attracting trained staff, but by the country faces a looming shortage of trained labour. It currently has estimated 8,000-9,000 trained IT professionals and until recently, no more than 800 were entering the labour market every year. " Numbers don’t mean anything if you don’t have quality people. The main challenge is quantity and quality of human resources. Especially quality," says Minister of Science and Technology, Professor Atta-ur-Rehman.
Another challenge is the national telecommunications infrastructure. As of 1999, for instance, there were only 2.22 telephone lines per 100 people. The country is working its way through a comprehensive telecom deregulation program that has already produced results. The price of bandwidth has dropped and more than 570 Pakistani cities, towns and villages have been connected to the Internet, up from a mere 20 two years before. In addition, within the past 18 months the number of cities connected by fibre-optic cable has jumped from 53 to 200.
Building this business, though, hasn’t been all smooth sailing. In the wake of September 11, Align’s venture acquired unexpected geopolitical significance. The company suffered a backlash among both stockholders and clients, spurred by political uncertainties about the impact of the war in Afghanistan and riled U.S. sensitivities. “There was a lot of dumping of our stock. A couple of guys either e-mailed or called in, saying, ‘We don’t feel comfortable doing business with someone who is a Muslim’ says Zia Chistie.”
While investors returned as time passed, the looming possibility of war with neighbouring nuclear-capable India leaves some watchers still worried. To guard against contingencies, the company has since also opened a back-up call-centre facility in the Gulf emirate of Sharjah, and another in Costa Rica.
Still, Ansari, the adviser, claims he is currently in talks with U.S. and Canadian companies interested in setting up new call centres in Pakistan. He admits that call centres are on the lower value-added rungs of the IT-enabled service economy, but emphasizes that they are just the beginning.
“We recognize fully well that initially Pakistan will be perceived as a sweatshop, but this has a way of ballooning out.” Indeed, before the crisis with India broke, MOST were predicting $400 million in overseas investment in IT in 2002, overtaking textiles as Pakistan’s largest investment sector.
Align is certainly looking to the future with cautious optimism. While the Pakistan India stand off leaves many other observers worried, the company hopes it has struck on a model that will both allow Pakistanis to share the rewards of the global economy and have U.S investors smiling all the way to the bank.
