Friday, June 15

Dell's India call center to support U.S. buyers

By John Pletz American-Statesman Staff Friday, June 15, 2001

Dell Computer Corp. said Thursday it will open a call center in India to support its U.S. home and small-business customers.

Dell joins a growing list of major U.S. corporations doing business in India, where they've found a ready supply of semi-skilled workers who also speak fluent English.

The company said the 150 new jobs in India are not being transplanted from the United States, where the company is in the process of cutting about 14 percent of its jobs -- more than 5,000 positions.

And it's unclear what the move means for Fort Worth, where Dell had planned to open a 500-person call center in April. Those plans have been put on hold indefinitely.

Dell first announced plans late last summer to open an in-country sales operation in India to sell to global corporations that do business there.

At the time, it said nothing about serving U.S. customers, but Dell spokesman Mike Maher said plans for a call center there have been under discussion for about a year.

Dell is one of a growing number of U.S. companies who are looking to India, where labor is cheaper and more plentiful. High-tech companies have long looked to India as a source for technical talent, such as software developers and engineers.

But now they're also finding a ready source of call-center talent because so many Indian workers have some technical skills and speak English well, a perfect combination for companies such as Dell that are trying to provide basic technical support by phone to customers.

India is only too happy to oblige. In Bangalore, a popular center for tech companies, there are a half-dozen major call centers operated by Western companies, including General Electric, British Airways, American Express, Amazon.com and now Dell.

Last month, the National Association of Software and Service Companies, a trade group in India, created a group devoted exclusively to call centers in hopes of attracting more of that business. Its goal is to create 1 million jobs.

So far, more than 100 call centers have been issued approvals to function by India's Department of Telecommunications, the trade group says. Call centers and other back-office services in India employ about 34,000 people.

"This business of shipping call centers out to English-speaking nations has been going on for a while," said Roger Kay a computer industry analyst with IDC in Framingham, Mass. "There are centers in Jamaica, Belize and other places.

"It's definitely about labor costs. With consumers and small-business customers you can't spend a lot of money supporting them."

According to some estimates, Indian call-center workers may make a few hundred dollars a month, compared with a few hundred dollars a week for their U.S. counterparts. Those are big savings to a corporation.

Dell downplayed the idea that it was simply hunting for cheap labor. But at a time when the company is desperately trying to cut costs as it mounts an increasingly aggressive price war against other computer makers, the move to India is another sign of how the company is changing.

It may be another sign that tough times in the personal computer business aren't going to end any time soon. Dell, the Austin area's largest private employer, may emerge from the current downturn a permanently changed company.

Demand has been slumping for nearly a year, and Dell has been slashing prices with unusual zeal in an effort to gain market share from its competitors. But the cuts have been deep and painful.

Dell used to do all of its manufacturing, sales and support for United States customers in Central Texas. Two years ago, it opened a manufacturing plant and call center in Nashville, Tenn., to support home and small-business customers.

Earlier this year, Dell began shipping some finished notebook computers to U.S. customers from newly expanded facilities in Penang, Malaysia.

One of Dell's biggest fixed costs is labor.

"One of the disadvantages Dell has had is that it already was so efficient, it didn't have a lot of places to cut (costs)," Kay said. "Other (competitors) had so much fat, it's easy to find places to cut."

You may contact John Pletz at jpletz@statesman.com or 445-3601.

-- Anonymous, June 15, 2001