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When British Airways and American Express moved their call centre activities to a developing country more than a decade ago, it triggered shock waves through the UK call centre industry. Businesses were outraged, arguing that moving jobs offshore would pose a huge threat to UK centres. But the companies stuck by their decision and ended up saving millions.

According to Deloitte Consulting, two million offshore jobs will exist in the next five years. Unsurprisingly many refuse to believe it's a positive step forward. "It's difficult to do telemarketing offshore," says Ian Rogers, managing director of Dataforce. "Operational directors are interested in cutting cost. Marketing directors are fighting against service being eroded." However, despite these fears, others are beginning to recognise that offshore call centres do have an important place to fill.

"We're thinking about going into partnership with them because of the strong interest in this area," says Broadsystem's call centre director, Brian Potter. "It makes sense to have that capability for our clients." The option is indeed a safe one, with other UK centres seeing that success depends just as much on experience as it does on money. Ion Group has teamed up with data company iii Services, whose clients include the DVLA.

"It understands UK and South African business and practice, and knows which jobs fit best," says Simon Fretwell, business development director of Ion Group.

Combining offshore and UK contact call centres like this reduces risk and gives clients the best of both worlds, according to Penny Bousfield, CM Insight's outsourcing director. She advises clients thinking of going abroad to choose an outsourcing company that has an office with an account management team in the UK, while the work itself is handled abroad. "It's comforting for clients," she explains. "They don't have to do so much work to stay on top of things."

But the fine line between tasks suited to offshore and UK call centres is becoming increasingly blurred. The perception is that offshore call centres are only capable of handling simple calls, while discreet targeting and complex CRM must remain in the UK. "We do offer straightforward tasks," says Matthew Vallance, regional director, Europe, at I-OneSource, whose clients include Prudential. "But Bangalore and Mumbai do cross-selling and up-selling of insurance products to existing customers. The only thing we don't do is cold calling." This differs from Ion Group which uses its Cape Town call centre for simple outbound calling.

Ion Group proves what research by operator Thus and consultant firm Kinetic already shows about standards between UK and offshore centre - that they are comparable. "We were actually surprised by the complexity of call handling," says Graham Hoskins, managing partner of Kinetic. "We saw sophisticated activity from people dealing with balance inquiries to making outbound sales calls, cold calling and customer service work."

India is the obvious choice for businesses venturing offshore, due to its current VAT-exempt status and numbers of university graduates eager to enter this sector. Compared to the UK, the average wage of between £1,000 and £2,000 a month is ten times the Indian national average. This means getting the cream of the crop - a very different situation to the UK, where wages average about £13,500 a year.

International contact service provider Oceans Connect recently set up a call centre in Pune, India, and received 3,000 applicants in three days.

"The cost savings enabled us to hire more people to do the job than in the UK," says chairman Richard Coppel. "We could do more training, giving the client a better service."

Many companies are particularly concerned about the level of understanding and empathy of offshore agents, but Kinetic rated 70 per cent of outsourcers either good or very good in this area. Ability to understand a client and brand is another hot topic. Rogers argues: "You can't tell somebody your brand - you have to be immersed in it."

It's a huge feat to accomplish, but Vallance feels training can lead to success. "We hold client-specific training to make sure all agents are dedicated to our clients. Clients spend time in India doing coaching and letting agents see and touch the product." In response to stories that Indians are piped episodes of UK soaps to brush up on their regional accents, he concedes it does help but adds: "We also tone down the accent by using voice coaches."

Kinetic found 80 per cent of Indian outsourcers achieve a rating of good to very good in terms of fulfiling customer needs without having to repeat themselves. Much of this is also down to infrastructure which, says Bousfield, is improving all the time. "Everything they use, their entire system, is bought from new. Their infrastructure can, in fact, be more modern than the UK infrastructure because they've started from a clean slate."

The vast majority of Indian outsourcers have also developed various CRM solutions, such as quality management systems, to measure the quality of calls and management information systems to gather information on customers.

No one is claiming that offshore call centres are perfect, but their levels of technology and quality of customer service delivered by their agents are becoming sharper all the time. So what does the future hold for call centres in the UK?

"Many companies are learning that it's quite expensive to go offshore and train people. On top of that you have telecoms, management and travel costs," warns Ron Peerenboon, managing director of BeCogent. "Once a country becomes developed, labour costs will go up. There'll be high attrition as well as other problems experienced over here."

The lack of VAT in India introduces another unknown quantity. "VAT will be applicable to centres at some point," says Rachel Robinson, business development manager of MM Group. "But nobody knows when or at what percent."

However, support should grow and smart UK centres will buy into the offshore option as a solution to offer clients. "It should be seen as more of a challenge than a threat because we can't afford not to go forward and invest," argues Potter. "Call centres may reduce in size but they'll become more professional, with more expertise."

It looks like this trend is here to stay. Even though many outsourcers remain confident that offshore call centres will never deliver the same quality of service found in the UK, statistics show there's a growing number who feel that with a good supply of money, time and a little patience, perhaps one day, they will. And that's definitely a market to be in partnership with.

COMMENT

RACHEL ROBINSON, business development manager, MM Group

We're looking at having an offshore call centre because we feel it's important to have this as part of our service offering. It will be available to all our clients if they want one, but how many of them will take us up on the offer is questionable.

BRIAN POTTER, call centre director, Broadsystem

The misnomers surrounding the quality of offshore call centres is simply anecdotal. There isn't a right or wrong - just different. Just because your business is offshore, that doesn't make it wrong.

RICHARD COPPEL, chief operating officer, Oceans Connect

It's the old story of a leopard never changing its spots. You can't expect to go offshore and try to change a country's culture, but you can take aspects of that culture and successfully attach it what you want to achieve.

MATTHEW VALLANCE, regional director, Europe, I-OneSource

The economy is extremely adaptable to companies moving to more cost-effective locations, and we'll see other industries eventually move into its place. This will leave the UK able to do more local, specialised value added work.

TOP TIPS

1. The decision to outsource offshore should not be based on price alone. All traditional call centre parameters also need to be taken into account, as ROI might be better in the UK after all.

2. You need a local presence to manage the operation offshore. It can't be done remotely from the UK.

3. Be prepared for some of your people to be spending a lot of time away from home. This needs to be properly considered as existing staff may not be happy to spend so much time away from family and friends.

4. Plan for as much interaction with your offshore call centre as you would if it were based in the UK. It is, after all, representing your business and your brand and it's important that your call handlers feel very much part of your team.

5. People management issues offshore are very similar to those in the UK. The challenges of recruiting the right people, training them adequately, managing, motivating them and keeping them informed are as important offshore as they are in the UK.

6. Recognise that you'll probably have to spend more time training your offshore agents as they're unlikely to be as familiar with your company or the lifestyles of UK consumers as UK call centre call handlers.

7. You need to be clear in your contract where responsibility for the call centre lies.

8. Ensure you have clear lines of communication and reporting with the UK.

9. Ideally, manage the relationship with your offshore centre through a fully operational UK-based call centre that understands the deliverables and through which you can benchmark performance, test new campaigns and check quality.

10. You must have a clear contingency plan in place to cover the eventuality that if a problem develops offshore it can be resolved quickly.

Source: Neville Upton, chief executive, The Listening Company.