Puffed-up projections by consultants, followed by a steep cost escalation for manpower, infrastructure in last 2 years due to searing salaries, real estate prices
High rates of attrition coupled with low levels of staff productivity
Operational problems, lack of scale and poor morale are further hounding BPOs
Most MNCs are predicted to go slow on expansion plans and eventually exit
Source: Forrester Research, Zinnov
***

“More than 60% of companies’ (read mncs) captive (software and outsourcing) centers fail to meet expectations in India.”
A Forrester Research report
“…Over 75 per cent of the global IT initiatives worldwide are not as successful as they were initially envisioned.”
A Zinnov research report

The fact  is that Indian companies (especially IT related ) provide very poor customer service  and are very short sighted.  They rarely understand the customer’s problems.  They are only interested in saving a few dollars, they do not realise that an unhappy customer will not bother to complain, just spend thousands of dollars somewhere else.

Poor customer service is also the reason why most of  the large Indian companies deal with commodities, where prices fluctuate. Some of  the largest companies in India have non-Indian origins and little competition because their competitors do not offer comparable customer service.

On my last job, I was told by many customers, – “Your product technology is outdated, your prices are higher than competitors but while finalising orders we insist on placing the order on your company because of your customer service” . Many times the customer would make changes or mistakes, but we were told to accomodate the changes, treat the customer sympathetically. Orders would be taken at a loss initially, considering future projects from the customer.  These were high value projects – usually lakhs , sometimes crores of  rupees.