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19Jul/04

Call Centers in Pakistan

Rahilla Zafar

The main advantage Pakistan has right now is that it is still an untapped market.

Without a doubt, the people of Pakistan missed out on an opportunity many countries took advantage of.

When you read about the countries benefiting from call center jobs, Pakistan seems to be missing from the list. According to Kiran Karnic, President of Nasscome, an Indian based non-profit organization that represents more than 800 IT companies and BPO providers, the average salary of a call center worker in India is two and a half times what a fresh college graduate could receive elsewhere. It is also five times more than India’s per capita income. With a 95% literacy rate and government backing through tax incentives, the Philippines is also benefiting from the jobs provided by the call center industry.

After investing in a public training program to prepare residents for call center work and liberalizing the telecommunications industry allowing for more satellite connections overseas, Jamaica has successfully moved beyond having just a tourism driven economy. Jamaica now boasts over thirteen call centers providing its people thousands of jobs.

With a literacy rate of 89% for women and 94% for men and some of the best infrastructure in the region, Sri Lanka has emerged as a major player in attracting call center industry investment as well. After pressure was put on the Sri Lankan government, they vastly improved technical training and high-speed connectivity was extended. These measures have paid off considering the call center industry costs in Sri Lanka is estimated to be twenty to forty percent lower in comparison to India.

How does Pakistan match up to India? According to Farrukh Aslam, Vice President of American based Touchstone Communications, as of now it is 40% higher to open a call center per seat in Pakistan than India. He says, “The government could do a lot more but they are not sincere to the cause. The infrastructure in Pakistan does not match the requirements of a Fortune 500 company. If you invest nothing in your people, you get nothing back in return. The government needs to do a lot more, for example invest in human capital, the workforce, offer incentives and help improve Pakistan’s international image of being a politically unstable country.â€

According to Mike Jackson, CEO of Traction Call Center Management Group which designs and operates call centers in both India and Pakistan, “India is literally light years ahead of Pakistan right now. The people of India have been doing this for eight years now and some of the companies are madly successful. This makes a very strong investment climate. The government of India had also assisted in many ways to develop the industry. India has built infrastructure and trained staff. Pakistan has a strong will to succeed and lots of ready cash to finance but the minds are also more closed to outside assistance.â€

On the fact that Pakistan has been so far behind Aslam says, “The silent revolution in India and the Philippines shocked people in Pakistan. People who follow one path and do not change are the losers and eventually they just phase out. Ten years ago there was no Internet, the past five to six years have been the best thing to happen to mankind this century. But the people of Pakistan for the most part only know the Internet as a tool for viewing pornography, on-line chatting and email. They do not know what customer data, CSR, MSR, on-line financial analysts, transport phone call, or what voice internet protocol is. These are major technical revolutions since the day of Graham Bell and his invention of the telephone.â€

Unlike Pakistan, India took advantage of all of this. Aslam adds, “India has taken off, it’s a slap in the face and this country has nobody to blame for it but themselves. The government over the years has restricted English language education to the elite, politicians, bureaucrats, army, and military. The children of these elites are not the type of kids growing up needing to get middle class jobs.†Another major issue is the false perception of the IT profession many Pakistani youth have. “It has become sub-standard, there are no jobs in it anymore, even in India, it is oversaturated.†Speaking of the thousands of Pakistani young people who are still pursuing computer science degrees, Aslam says “the message has not gotten out to the Pakistani youth who are still flocking to these computer schools. The schools are making money off of this and ripping off the general public.â€

According to Aslam, “Pakistan will never catch up to India, all people here can do is learn from them.†There are more Microsoft certified engineers in India than anywhere else in the world. China took over the manufacturing industry and India has taken over the service industry. India earns more dollars per employee from western countries then China does from manufacturing and producing. Aslam adds, “Unlike Pakistan, India has a vision, the people have a vision, they don’t have to defend their country’s image.†India has joined Australia in getting companies such as IBM, Volvo, and BMW to replace their high dollar US consultants with their local skilled labor force. Presidential candidate John Kerry has promised to stop out-sourcing if elected but according to most industry insiders, he will not be able to. In fact all the US would able to do is prevent only government jobs from going overseas.

Without a doubt, the people of Pakistan missed out on an opportunity many countries took advantage of. Aslam says, “There is no awareness, the media must play a role to put pressure on the government who are incompetent and have no clue that this industry even exists in Pakistan. There are many politicians but no leaders.†Another drawback is that Pakistan has poor public transportation, low literacy (estimated at only 49%), and no sexual harassment laws. Currently Aslam says 20% of his work force are women who he claims always out perform men. Unfortunately even though Touchstone provides door to door pick up and offers a starting salary of fifteen to eighteen thousand rupees a month for forty hours a week of work, many women end up quitting due to societal pressure. In India, the call center work force ratio is 50/50. Once hired at Touchstone, employees go through three-week training in communication skills, product knowledge, and accent neutralization. Since the call center industry is continuing to grow in Pakistan, if one performs well, career growth is expected.

According to Karnick, India’s single-biggest comparative advantage is the scalability of the country’s talent pool. A call center with 500 employees can be set up anywhere in the world. However, India is the only developing country that could expand a center of 500 into 1,000 employees within months. Within two years, India would have no problems expanding to 5,000 employees because they have such a large educated work force. According to Aslam and Jackson another challenge Pakistan faces is lack of middle management. Another advantage India has in being in this industry for years are “In India you have seasoned CEOs to agents available with up to eight to nine years experience†says Jackson.

However Pakistan has not lost out completely. According to Jackson, “The size of the pie is billions, even if Pakistan can capture a small piece, it is still very large. Given the geo political things remain ok Pakistan has the potential to receive more blue chip clients. The main advantage Pakistan has right now is that it is still an untapped market. It needs to position itself quickly to move ahead.†According to both Aslam and Jackson, both are confident that once more blue chip companies decide to invest in Pakistan, it will be a domino affect of many other companies following. However like Jamaica, India, Sri Lanka, and the Philippines, the government of Pakistan must do what they can to support this industry. This must be done primarily through improved infrastructure, education, and technical training.

The opinions expressed in this article are of the author and not necessarily of Vibes.

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  1. Unfortunately, the shortcomings of policy and leadership that you mention apply equally to Bangladesh, and lots of other developing countries. Good article.

  2. I think Pakistan got a lot of talent and people ( Touchstone and Call Central) need to explore it. I'm manager of smaller call center in the same building where touchstone and call central are located but we having no problems with HR. Call Centers in pakistan wanted to hire people with Masters from good schools and at the same time offer them very low salaries. There are hiring and firing going on in call centers because higher management is not getting the right picture. They need to understand pakistani market before offering a job and need to look more on why they can't run a call center in Pakistan . I think government is providing everything possible for all the call center and i don't whatelse they are expecting form pakistani govt!

  3. very interesting and informative :-)

  4. Technology aside, the lack of properly trained workers may also be hindrance to this venture. Having lived many years in the west now, I have come across many recent immigrants from India and Pakistan. And every time, I have marvelled at how well the Indian immigrants speak English. However, on most occasions, I have not had a similar experience with Pakistani immigrants. This difference in English proficiency is undoubtedly a product of the Islamization / de-westernization initiated by General Zia during his regime (i.e. replacing english with urdu in public schools). Communication skills and English proficiency are THE TOOLS necessary in the proper functioning of call centers. I don't know if Pakistan can produce a work force with such skills. (on a side note, if any Indian call center employees are reading this, plz plz plz stop calling me at insanely early hours of the morning...I absolutely do not want to switch my lond distance carrier.)

  5. Companies will invest in Pakistan if Paki government provide them some security. I wonder if any of the people in the Government will read this article....

  6. Thanks for the article! My friend is convincing me to join him in venturing out in this field so I thank you for the information you compiled. True, Pakistan hardly every catches the train in time and when it does try, even lags in jumping on the bandwagon. However, in order to overcome our shortcomings, we may need to escape the trend of comparing Pakistan with India all the time. The article for the most part did only that, belittle Pakistan in comparison to India. Let us establish that there is an opportunity and then benchmark Pakistan with the world and not just India. Only then, can we expect to excel beyond India.

  7. Hi, Let me introduce myself, I am a graduate of LUMS and has been in the US for the last couple of years. Before coming to US, I was working with LUMS for IT Research specially the focus was Management Practices in Software Houses in Pakistan. During that research I came across ITES and started my own research on that. The outcome of that research was a transcription company which we founded in 2001. All this time I have been trying to get some information on Call Center operations but right after establishing that company I came to US and has not been get the feel from back home as how things are. Your article gave me much of the insight that has been going on. And you are right in establishing the gap between Pakistan and India. However, sometimes a bad thing can be turned into an opportunity. what we can do is to learn from their experience and somehow the latecommers can take advantage of the industrial leaders in the terms of high Awareness of the conept within the market. When I was there the only call center was of the Dental Company which I came to know later closed down. As to what is the situation right now, I am not that well informed. However, if you have any information and are willing to share I would be grateful.

  8. Dear all! Assalaam-O-Alaikom. My friends had launched a call center from islamabad in 2003 and mashallah its doing well, now working on their call center training facility there too. If you need information or contacts, please feel free to email me. Allah Hafiz for now

  9. I completely agree with your statement about Pakistan lacking a common vision & the government being quite backward in terms of seeking out opportunities. Pakistan has no uniting factor except that we're a majority Muslima country while India has come up with slogans to try & raise patriotism like 'Made in India' & 'India Shining '. When you go out of your way to make people be proud of who they are & provide them with the right tools (in light of the article, infrastructure & literacy), there is little to stop the progress of such a nation.

  10. Nice article but i guess you forget to mentioned why Pakistan is behind the wall? the first thing came in my mind is Education Standards! and second thing urges me to see first thing again...write some things about it as well... the quality of it!

  11. Rahilla I like you ar writings. Please keep writing. Write me an e-mail and we talk. You write accruate about our country and make me proud you are pakistan and i am pakistan. i give you high high rating. Ali

  12. It would be great if you could also list the critical suceess factors of getting the country out of this upheaval and the untapped market. Recommending few steps on how to change the perception of being "left behind" to "we are moving forward" would be another great step in helping us catch up with competitors.

  13. Well! we cant just sit idle and wait for the govt. to make any advances. I think we need to be more proactive rather than being reactive to the situation. If the politicians can't become leaders then why dont we become one?

  14. To obtain BPO contracts you need educated employees and infrastructure. To get that you need a schools that produce. To get that you need jobs waiting for the people at the end of school. To get that, you need contracts. The question is: how does one kick off the virtuous cycle. One can enter it at any point. There are natural opportunities in Pakistan. For one thing, I believe people outside the country overestimate the level of risk. This should be an opportunity for arbitrage in what is essentially two risk markets. You could make money by insuring companies in Pakistan, embedding derivatives in Pakistani companies, or engage in "private outsourcing" whereby you take an equity stake in a company and force it to come to Pakistan (a la the Resource Group). You would benefit from the lack of other call centers with lower prices.

  15. Good Article Rahilla. I have been thinking about this for a good two or three years now. In fact, ever since my interaction with certain individuals at various levels of government in Mauritius and others who were investing in the Call Centre boom in India and Sri Lanka. Being Pakistani, I felt miffed that we were being left out and I also felt guilty since I have been working in the IT and Business Outsourcing industry in Europe for over 10 years. THe usual traps listed by yourself and your commenters are obvious and they are formidable obstacles in the way of progress for this industry in Pakistan but there is a way that we can take astep in the right direction if the business leaders of the few call centers that exist in Pakistan were to be focused in on the following suggestion : Decrease the working hours and days of the call centre staff that you have and increase the number of staff that you have. This way you will create a larger number of experienced staff, will be able to cover longer and more varied hours and can expand much quicker when required. All your per head costs will be reduced and you will create more jobs. You may even attract business by developing such innovations. Additionally there are many other methods that can be utilised to increase your efficiency and reduce your costs whilst at the same time creating an ability to expand rapidly. If anyone is interested, I'd be happy to enter into a discussion.

  16. I'll expand the scope of my comments to overall IT/software outsourcing to Pakistan, although call centers will provide the job volumes. (1) There may be one factual error in the article (not that it matters any more). I don't believe John Kerry promised to stop outsourcing. During the presidential debates he did state something of the sort that outsourcing is a reality. (2) IMHO - the potential in pakistan is not being tapped, that supply is way greater than demand, and there is significant variation in skills and training in the fresh-out-of-school workforce due to uncertainty around industry needs and cottage-industry style educational institutions that provide little to none practical training. (3) the government just does not get rapped enough for failing to act. They are a critical bottleneck towards establishing the local network and connectivity infrastructure, providing tax benefits to foreign firms to lure them in, and providing substantial investments in local firms to encourage them to take a risk and attract more business, etc. (4) NADRA (even though it is trampling all over privacy rights) is doing an excellent internal job of transforming the technical side of the government. Atleast something is movin and shakin ! (5) It's also important that local innovation is encouraged. Abdus Salam was unable to establish a physics research institute in Pakistan so it was established in Italy ... what a shame ! Aren't there enough wealthy Pakis to fund the establishment of a cutting edge research center. (6) Here is an interesting overly optimistic take on the situation. Some of the comments in the feedback section of the article are funny ! - www.ecommercetimes.com (7) For companies to make a move there, we need some intense lobbying in the VC and executive circles here. Well placed Pakis could help, however they need some convincing themselves. Pakistan does suffer from a severe lack of credibility. That's where Pakistani government action and outreach could help. (8) Clickmarks was able to convince their board after strong lobbying by Pakistani exec management. From what I hear, a true success story of cost savings and results.

  17. I like u r article its an excelent

  18. I am interested in setting up call center business in Pakistan with focus on serving european companies particularly UK. I need some advice as to how to proceed. Any connections would be helpful. Write me

  19. I like u r article its soo nice...:)

  20. It was an excellent article to hilight the importance of Call Centres in pakistan but I would like Mr Aslam and Mr Jack to guide me on following tips:(1)If i want to establish this buisness in NWFP,what wold be the Pre-requirements(2)Where and how i will need practical help and guidance. Please explain the above Queries

  21. It was an excellent article to hilight the importance of Call Centres in pakistan but I would like Mr Aslam and Mr Jack to guide me on following tips:(1)If i want to establish this buisness in NWFP,what wold be the Pre-requirements(2)Where and how i will need practical help and guidance. Please explain the above Queries

  22. I always wanted to open a call center in pakistan but there are lot of factors involve in it... I was visiting Pakistan back in july and i had a little hope that i maybe able to pull it off and have a call center in pakistan.. but same week i saw few bomb blast and also a killing of a person who work for american company... and he was pakistani... The whole thing really change my mind, If i had a call center and dealing with american or europen companies lot of people are out there who can harm the employees and location just cause someone is doing a business with american's or european companies. we are lacking to many thing behind, and there are many other examples like that, even if there is a support of goverment and education level is high, still there are many things we are lacking.

  23. i was writting a research paper on BOP three months back and since teacher (whom i was writting it with moved out of the city) and since i got bussy with other things i let it in the middle of no where. But it guess its not all the dark as the article suggests. I've gone through alot of thing on this subject and trust me PAKISTAN has a potential to have a un believeable return on your investment. Any one who needs to know s'thing about BPO, write to me i 'might' be some help.

  24. Another problem with Pakistan is security and until people feel safe from anti-American fundos in Pakistan I don't think many companies would want to risk sending employees there. I have never heard of any Indian going to attack some foreign company...they seem to understand the importance of foreign investment.

  25. It's those crazy fundamentalists who ruin everything for everybody. Remember when they burned down the General Motors Plant in Pakistan? How about when the overboard idiots burnt down and blew up the clinics in the northern regions because they were funded by America? I understand how people have been raised believing backwardly to hate America - but come on people - burn down Plants that pay you good money to support your MUSLIM familes and burn down clinics meant to HELP MUSLIMS - what a shame! It makes me really angry that people ruin jobs and people's lives because they don't want to be connected to Kafirs... How ridiculous - working for american based companies doesn't mean you have to practice their religion or that you are contributing to the building of the Christian empire or something.. Give me a break - fundamentalists and extremists - TAKE A HIKE and let our families back in Pakistan make a decent living for their children.

  26. So who can help me in locating names of Call Centres in Islamabad. I would be interested in getting trained in that field. I can be contacted at whatafriendathot...mailcom

  27. Very interesting article. I would to put some several delopemnts in the Pakistani Outsourcing business. I work in IDC as a IT Market Consultant, a leading IT research and advisory firm, and last summer I have held a conference for pakistani IT firms organized by the Pakistan Software Export board in Karachi. the topic was; How tackle the COntinental European IT market (mostly France and Germany, here even INdians have real difficulties to set up by the way) My Analysis: Firstly, Pakistan has enormous potential: - It is an english speaking country _ Untapped market _ in 2005 the glaobal market reach only $300 US but grew almost 2 times higher than india with more than 45% increase in software & IT services exports _ a lot of leading IT companies have settle now in Pakistan like Cisco, NCR, which got a center of excellence in Pakistan for the Asia-Pacific region, Beairng point (IT consultancy firm), IBM, Oracle, Alcatel etc. _ some IT Pakistani firms are wolrd class companies; In 1996, Lahore's NetSol Technologies Inc. won a contract from Mercedes-Benz Leasing Company in Thailand to install a software program from Britain. Later, the company developed its own package, which it went on to sell to DaimlerChrysler in nine Asian countries. the company is a Nasdaq-listed company and now has 270 employees and this year expects sales of $10 million. NetSol signed a $2.3 million deal with Toyota Motor Corp. in April and hopes to expand into Europe. Lahore's Techlogix Pakistan, one of the country's first software exporters, gets 95% of its business from the United States. Most of that comes in from a four-member sales team in Boston, which funnels work to 90 software developers in Pakistan and a further 35 in Beijing. The company booked $8.2 million in revenue in 2004 serving 18 clients, including General Electric and Massachusetts Mutual Life Insurance. The banking sector (Citibank, Standard Chartered, ABN AMRO) has invested heavily in the credit card business and is currently employing thousands of call center executives; these national call centers have set the stage for international players. _ in the call center business: Call center operations are expected to grow even faster than software. Some 120 centers have opened in Pakistan in the past two years. Those centers employ approximately 3,500 people today, and that number is expected to grow by 60% a year. Arwen Tech, a Karachi company that runs a 600-seat center, saw its sales double last year to $10 million, serving clients such as Pakistan International Airlines and the local franchisee for KFC Corp. The company is now building a 1,500-seat facility and hopes to boost revenue tenfold, to $100 million, in the next five years as it attracts more international clients. TRG plans to expand its 400-seat operation by more than 1,000 seats in the next year as well. The expansion of call center operations will enable more and more companies to find a Pakistani partner that meets not only budgetary needs but unique skill requirements as well. By its geograhy, pakistan is well positioned to sales IT servcies and custums softwares and apllicaiton software to the Middle east. There, high oil prices have fueled investment in IT wheer Pakistan is benefeting, ie. look at the company Kalsoft which wokredd several times with Eitehsalat ( world leading telecommunication company based in UAE) Now the Pakistani government is funding comanies to reach highest quality standard. Indeed, many companies are going to be certificate CMM 3-4 and one 5. Even in India, no countries except pakistan has grown so rapidly interms of Quality standard in so short time (less than 10 years). In India, you should know that companies like Tata Consultancy Services, Wipro, HCL, Infosys and Satyam exist for more than 15 years. Why? because in late 70's IBM and all major IT companies decided to leave the country for Political unstability and pressions. So yes Pakistan has a long way ahead to succeed in a global and more intense competition markets, but it is wrong to say that Pakistan has no means and WILLINGNESS to achieve excellence wheter for social and economic reasons. It reminds me India 10 years ago. they are smart people, talented but the real problem is that they lack truly from leadership, internaitonal exposure (to other cultres) and yes, you are right to point out a lack of skilled mid managers. A part from LUMS (business school) and FAST (computer engineering school) which graduates are suitable to work in multinationals, I doubt with others. However, it has to be minor. Why? in a Mac Kinsey study, in India, over 300.000 ingenieur and language gradute every year, only 15% are suitable to work in mulitnaitonals. The pression is very tight over there now, infratructure are saturated (mostly in bangalore). As it takes time to build new facilities, it is expected that the growth will decelerate a bit. I have been there just before my presentaiton in Karachi. My conclusion: I have people from the Pakistan IT Ministry, IT entrepreneurs, Deans from leading schools, trust me, they really commited to IT growth. Morever, when I was in the Karachi IT expo in last August, there was a large chinese delegation, u know why? because it is easier for them to invest in pakistan in IT than in India for political reasons, As such the growth can come from China. Pakitan could not compete face to face with India, so they are investing in different mix of technolgies to compement the Indian offering. Even their appraoch differ from India in a way that they allocate they sales forces in different regions than India now (mostly in Middle East). Inshallah, the Pakistani IT Export will grow faster in next years but they are still issues surrounding education back up in longer term. Because u can't sustain a country with a leading growing sector like IT whihc is highy value add and agriculture where still more than 70% of people live and make their earnings. it creates big gaps and social inbalances.

  1. Anyone runs call centre in Pakistan . I need to buy case of accident claims.


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