call center/ data services center - India

[limitkid7 5,000+ posts]

I'm looking to set up a data services center in India. I'm not sure of the location but I'm thinking it'll be in the Dehli area. I have a few questions that I'd like to get answers too and of course I don't need specific numbers but general ball park figures will be accepted.

facts:

I'm looking to invest in a 55 person center where it will serve as a hub for service and coordination withinin the plastics arena. The company hasn't operated in India at all and before we would like to build a plant in the area, we wanted to place a sales force to target the plastic market & of course the center (within the center we want to set up a streamlined process for all of our international manfacturing plants (2 in the US, 1 in Mexico, and 1 in China). Currently all the plants are pretty much operating as a separate business silo and the business is seeking to streamline the process. We are targeting India because of the cost and educated workforce w/the possibility of creating a plant down the road).

Questions:

1. We want to reserve a floor in a local office building preferably in the city to avoid various caste system problems and issues - what is the going rent rate for total expenses dealing with property (1 floor in an office builidng) and equpiment (50-60 pc's, servers, multi phone network - #800 number, etc).

2. what is the going rate for service related/call center associates - please provide dollar amount in local currency not USD

3. I know the market there is pretty competitive, what are some various things that we can put into place to keep employee turnover low. Rumors are that if you set up a call center there you need to have some major incentives in place to keep employees from quitting, as they can pretty much walk outside, interview, and have a new job the next day.

4. concerning sales - what figures do you have that you can present to me as far as the average person w/in the manfacturing arena will generate as far as numbers go w/sales more specifically in plasitcs

5. in generating numbers is it recommended that i start off w/the balance sheet, income statement, or cash flows

6. based on general information we're expecting cost to be related to 6 million dollars - how soon on average does a company have a return on their investment or even break even - 2 months / 2 years or other? please provide a general number if you can.

7. there are employees from the US that we'll send over to India. Is it safe to assume that these people will be the highest paid individuals w/in the company in this area, considering that there will be no cut in wages and additional funds will be given to these 2 individuals and their families

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[Rmsanger 10+ year member]

Wow man tough questions for this forum. I have a Master's Degree in Finance and probably could get the info for you but you're talking about a couple of days worth of research. Your best bet is to look into a market research firm or look into hiring an international business analyst to do a business feasibility study. Off the top of my head the last figures I saw were entry level support workers in Delhi were starting off between $6-8 per year. You are probably looking at an annual payroll between $375k and $525k to run a facility of that size. Rent you are talking a minimum of $2,500 per month for a decent facility. Obviously you would know the initial costs for the pc's, software, networking, etc..since you have other facilities.

The cost end is the easy part to estimate; whereas, revenue forecasting will be tough. Are you looking to setup a center based in India to support domestic sales or sales in India? Getting information from Indian's market will be tough and the data will be much less reliable due to their liberal financial report codes. I would again definitely recommend a business feasibility study by a pro (might run about 50 grand or so but save you a ton in the end).

Also one last piece of advice, never evaluate a project based upon payback period. It is a weak measurement and doesn't account for the total profitability of a project. Use Net Present Value (NPV) or modified Internal Rate of Return (MIRR) for your measurements.

 

[limitkid7 5,000+ posts]

I don't have enough time to pay someone to do the reserach.

the india based center will support sales w/in India only but the center will also be 1 central location for the whole sales force within the company to contact and process requests through. I've looked into several useful resources concerning the india market such as: imf, world bank, development banks, SAARC trading bloc, as well as other news releases posted on hoovers and other databases. Hell, i've even looked at d&b to find out what the projections will be basedon historical trends

anyways I used a lot of resources and these are the figures that I've came up with

$5 USD per agent an hour translating into 226.200 Indian Rupee

$ 19152 USD per sales person an hour

$2 USD per administrative person translating into 90.480 Indian Rupee

$ 20100 USD per management staff

$45600 USD per expatriate

Building: goal is to purchase a floor in an office building - $555 USD per month

i'm in the process of doing npv and irr however what is a realistic number to expect someone w/in sales to generate in India? I have yet to find any data predicting or even forcasting sales figures w/in the mafacturing industry in India - of course most companies won't give this number to the public.

I'm using wacc, npv and hurdle rate to do calculations but i need to have a good idea of when the money invested will at least break even. Of course a break even analysis is sufficient but the real question is when can i expect to turn negative numbers into postivies .. should i be looking at months or years and this is simply based on the project of expanding NOT the company's numbers all together.

 

[Rmsanger 10+ year member]

My friend your up shit's creak without a paddle. Whatever computation to breakeven analysis, NPV, or hurdle rate you come up with will not have any significance at all. Your labor cost estimates seem to be accurate but your lease rate is way to low for a facility to hold 55 work stations as well as a sales/distribution site. You are looking at least $2500 for that square footage.

Secondly you stated a cost of $6 million is that just the initial cost of equipment/product/facility investment, total-operating costs for 1 year, or the entire life of the project. What is you contribution margin for you "plastic products".

India's GDP is expected to grow at ~ 7% throughout the next 3 years. If you find out what cycle your product's market is in you can come up with a revenue growth multiplier. Initial Revenue will be based upon market competition, cycle, and relative price elasticity. You cannot even make an estimate of revenue until you have complex demand models for your target market in place. That is a job for the pros; somebody who actually works, lives, and poops in India.

Don't forget the marginal benefit to your other facilities based on this call center. Finally don't forget floatation and inventory costs as well as foreign exchange risk back into dollars.

 

[limitkid7 5,000+ posts]

hurdle rate will be @ least 12%. I said that I have not done the calculcations for NPV or the break even analysis yet. I'm doing that stuff this weekend. In order to get the loan from my source I must meet a 12% hurdle rate thus the reason I presented that number. the 6 million dollar invesment is a lump sum that will be put into the budget at one time. This 6 millon does include the whole project - equpiment/production etc. Based on sales figures we'll generate enough money overtime to fund additional things that may come up. According to the figures I got based on research in we're looking at building cost of only $555, this does not include additional equipment. I'm not sure about what resources we have for equpiment but considering the fact that we're closing down major operations within the US and Mexico we can ship that equpiment to the new office. Heck a Dell pc is a Dell pc no matter where its place. The project is only dealing with expansion all the IT related problems and functional issues will be taken into consideration on an as needed basis.

India's gdp is expected to grow at about 8% you are correct, thus the market will expand and more specifically the plastic's industry is at a 8% expected growth rate too. SOOO when doing my forecast i'll take this into consideration on my income statement under generated revenue we're expected to target the market very aggressively.

I have not done the sensitivity analysis yet to even start thinking about labor, market, and finacial risks.

again its hard to determine price per product in india as far as sales go so i'll have to make up a number

 

[HiAmplidude 10+ year member]

I'm looking to set up a data services center in India. I'm not sure of the location but I'm thinking it'll be in the Dehli area. I have a few questions that I'd like to get answers too and of course I don't need specific numbers but general ball park figures will be accepted.
facts:

I'm looking to invest in a 55 person center where it will serve as a hub for service and coordination withinin the plastics arena. The company hasn't operated in India at all and before we would like to build a plant in the area, we wanted to place a sales force to target the plastic market & of course the center (within the center we want to set up a streamlined process for all of our international manfacturing plants (2 in the US, 1 in Mexico, and 1 in China). Currently all the plants are pretty much operating as a separate business silo and the business is seeking to streamline the process. We are targeting India because of the cost and educated workforce w/the possibility of creating a plant down the road).

Questions:

1. We want to reserve a floor in a local office building preferably in the city to avoid various caste system problems and issues - what is the going rent rate for total expenses dealing with property (1 floor in an office builidng) and equpiment (50-60 pc's, servers, multi phone network - #800 number, etc).

2. what is the going rate for service related/call center associates - please provide dollar amount in local currency not USD

3. I know the market there is pretty competitive, what are some various things that we can put into place to keep employee turnover low. Rumors are that if you set up a call center there you need to have some major incentives in place to keep employees from quitting, as they can pretty much walk outside, interview, and have a new job the next day.

4. concerning sales - what figures do you have that you can present to me as far as the average person w/in the manfacturing arena will generate as far as numbers go w/sales more specifically in plasitcs

5. in generating numbers is it recommended that i start off w/the balance sheet, income statement, or cash flows

6. based on general information we're expecting cost to be related to 6 million dollars - how soon on average does a company have a return on their investment or even break even - 2 months / 2 years or other? please provide a general number if you can.

7. there are employees from the US that we'll send over to India. Is it safe to assume that these people will be the highest paid individuals w/in the company in this area, considering that there will be no cut in wages and additional funds will be given to these 2 individuals and their families

1. Depends on city, and location in that city, and quality of facilities. Cost varies so much, there isn't even a ballpark figure. $1500-$3000 setup fee for T1, $800/mo. Use business VoIP for phone service and don't mess with a PBX (people can take calls at home if they can't make it to "the office"). 50 basic Dell machines with service @ $800 each = $40k. 60 headset phones @ $50 ea = $3000. handful of basic 3Com network switches @ $400 ea. Server(s) and OS licenses. Rack. CRAC (cooling system). Fail-over and redundancy systems for data, network, and power. UPSs. Offsite storage service/solution. Desks, chairs, printers, fax, scan, office supplies, blah blah blah...

Hey, why don't you look at the Albuquerque, NM area (instead of taking it out of the country)? There's cheap labor here, low cost of resources and space, and relatively high technically-educated workforce. That's a huge reason my 65,000-person company built one of its important sites here.

2. What? Local to India? No clue. Basic technical phone-answerers in my city can be had for as little as $5.50/hr (USD). Computer call center people for as little as $7/hr (USD). And tier-2 and specialized phone tech's @ around $35-45k/year (USD).

3. That exists in the US too. The best way to keep people is to have good HR, Managers that are qualified, motivational, good/respectful *to* employees, and employees have a sense of purpose. Fire the shithead managers instantly in the town square for all to see -- make it obvious that people treating other people poorly, especially those below them, is not tolerated. You're not going to keep people around with free vending machine snacks, weekly volley ball tournaments, monthly bonus raffles, or a recognition picture on the wall -- or even higher pay. People always feel they can do better someplace else. Let them feel like they can do something to better the company, right there, and that's what they'll do. Challenge, baby -- it's what drives most ambitious folks to get out of bed in the morning.

4. No idea. Our direct Sales crew deals with software and services that can exceed several million dollars for a single implementation.

5. Have you taken a business class or is this whole thing just a brain-storm?

6. See 5.

7. Yep. Consider, also, that those people will be spending a good amount of the US money in India, and pretty much all of the US money the Indian workers will stay in India, instead of going back out into the US economy where people will re-buy your plastics products and services. People taking US jobs over seas or over the border because of cheap labor seems to make sense at that level (to a f'ing kindergartener), but where are their profits going to come from if all of the money-makers and spenders are slowly shifting out of their country?

 

[limitkid7 5,000+ posts]

we're looking at India b/c we have to expand internationally and china is not an option. India and pakistan were the two choices and of course you should understand why i picked India (educated workforce cheap labor higher GDP more technology, and last - they have an infrastructure where as pakistan doesn't at all)

your city is NM, again labor rates will change in New Delhi India vs. the US. I know the market over there in India is booming but I have been able to gather specific dollar amounts per role so i'm okay in that area.

good hr - ?! keep in mind this is a us based company so we'll have a hard time finding someone in HR who will want to go overseas. as a matter of fact i don't even think we have enough hr reps in the company as is. I need to know what specific things can we do to keep employees interested. from research - it looks like companies that have big names are able to keep employees. i THINK that the market there although is booming now will eventually die down some as more focus is starting to be placed on south america and china.

i know my sales question was kind of stuipd considering it would depend on the person - a sales person can generate anywhere from 100,000 to millions so sorry about that stupid question

yes i've taken business classes, i posted this stuff to hopefully get a response from someone in india or from someone that deals with plastics and can provide some industry input

this too was a stupid question i realize it now. money will be generated within the first year considering the 6 million invested surely can't be exhausted w/in the first year

for #6 i wanted to know if anyone has experience or know of someone that has. what does can an expatriot ask for when going to india to work and i'm not talking about dollar amont but more so a %.. and lets just say this person is a operations manager *service industry**

 

[HiAmplidude 10+ year member]

Yes, good h-u-m-a-n r-e-s-o-u-r-c-e-s... not necessarily a good HR department or head. Have good people, and the people around and below them will not want to leave at the first chance they get.

I'm not a business major, but I am a Manager, and unlike many of my peers I have common sense. While they're tossing papers, trying to force people to be happy with statistical data and text book methods, I'm getting to know the people and "feeling" around for what works for our folks. If I walked across the street, I'd find a completely different set of needs with those people's workforce. There probably aren't any clear-cut "winners" of things to do, that work for all workforces. Ya just gotta' feel out the situation (or have someone else do it for you) and adjust as it goes along. Obviously, there are some perks that you can intice good workers INTO your company with, but those things probably won't become reasons for staying.

7. I've heard of US workers getting 10%-20% increases in pay for their "sacrifice" of going over seas to head up us-based foreign workforces. This is not an easy question to answer (for me, at least).

 

[HiAmplidude 10+ year member]

Oh... and... our global company is almost entirely based in the USA. We have sites in other countries where demographically, it's not possible to provide those services from the US within acceptable costs and where language restrictions would be too great (i.e. Chinese center for Chinese clients). We wouldn't force our clients to deal with the cr@p companies are making Americans deal with -- talking to a barely-English-speaking Arab about technical problems over the phone. A 10-minute "solution" to the problem can (and does often) become and hour-long battle to understand what in the world they're trying to convey, to solve the problem. I've sat on the phone, myself, for 4 hours, on a 15-minute problem because Microsoft just happened to be using an Indian call center, that night, for premium level support after-hours services. How much did MS's "cheap labor" save them that time, and all the other times that cr@p happens to us?

 

[limitkid7 5,000+ posts]

Yes, good h-u-m-a-n r-e-s-o-u-r-c-e-s... not necessarily a good HR department or head. Have good people, and the people around and below them will not want to leave at the first chance they get.
I'm not a business major, but I am a Manager, and unlike many of my peers I have common sense. While they're tossing papers, trying to force people to be happy with statistical data and text book methods, I'm getting to know the people and "feeling" around for what works for our folks. If I walked across the street, I'd find a completely different set of needs with those people's workforce. There probably aren't any clear-cut "winners" of things to do, that work for all workforces. Ya just gotta' feel out the situation (or have someone else do it for you) and adjust as it goes along. Obviously, there are some perks that you can intice good workers INTO your company with, but those things probably won't become reasons for staying.

7. I've heard of US workers getting 10%-20% increases in pay for their "sacrifice" of going over seas to head up us-based foreign workforces. This is not an easy question to answer (for me, at least).

well considering all things - you can't assume that the people in India will want you to get to know them. Again, rather than speaking in general terms - this particular section was presented for someone w/in India to answer. Someone NOT involved in the caste system. One thing people in India do like is team effort however they prefer to please the customer more then their peers or boss. This is something that is good and bad - i need to know what tips can be used to overcome the challenges of turnover specifically in this type of market. I am a hr person by degree (undergrad) but using general assumptions and business practicies the way they are in the us will not work over in India - trust me on this

 

[limitkid7 5,000+ posts]

7. I've heard of US workers getting 10%-20% increases in pay for their "sacrifice" of going over seas to head up us-based foreign workforces. This is not an easy question to answer (for me, at least).

hummm (thinking) is this a rumor ?

 

[limitkid7 5,000+ posts]

Oh... and... our global company is almost entirely based in the USA. We have sites in other countries where demographically, it's not possible to provide those services from the US within acceptable costs and where language restrictions would be too great (i.e. Chinese center for Chinese clients). We wouldn't force our clients to deal with the cr@p companies are making Americans deal with -- talking to a barely-English-speaking Arab about technical problems over the phone. A 10-minute "solution" to the problem can (and does often) become and hour-long battle to understand what in the world they're trying to convey, to solve the problem. I've sat on the phone, myself, for 4 hours, on a 15-minute problem because Microsoft just happened to be using an Indian call center, that night, for premium level support after-hours services. How much did MS's "cheap labor" save them that time, and all the other times that cr@p happens to us?

this is true for some industries however in my situation w/setting up a hub to streamline processes is the best thing to do. I did the analysis and looked at some numbers - I'd go to inda in a heartbeat over anywhere in the world right now to take advantage of their advantages.

i really think that the risk factor will be low compared to if we went to china. one day china is going to ask the US for to pay our loans back and we won't be able to - and you know what this will cause. Im' not even about to tell you how ceo's and managers in China that come from differnet countires get fired.

lets just say if you woke up and looked at the local news paper you may see your face on the cover saying "XYZ's career is up in the air" and on your way to work, the guards don't let you in to your facility that you've created

sad but true

 

[limitkid7 5,000+ posts]

i think this is a great discussion and i appreacite the feedback from both sources.

 

[HiAmplidude 10+ year member]

hummm (thinking) is this a rumor ?

Actually, I trust my uncle who was replaced by 2 of these happening. I see it in my industry regularly. But, since this hasn't actually happened to me, I guess it would be considered hearsay in a court of law. Yep.

 

[HiAmplidude 10+ year member]

Again, rather than speaking in general terms - this particular section was presented for someone w/in India to answer.

I know, I know. I'm just killing a little time at work, and your topic interested me. Just brain dumping. You probably won't find what you're looking for on a car audio forum. Are there even members who live in India, and even more rare--have experience in what you're discussing?