DETAILED PROJECT REPORT

ON

SETTING UP OF A CALL CENTER IN CHANDIGARH

SUBMITTED TO: Dr. P.K. Gupta

GROUP MEMBERS:

NIKHIL SARIN-22/02

ROHIN KAPOOR-78/02

VANEET TULI-108/02

AJAY KUMAR-114/02

DEBOPRIYO-90/02
The Project is based an information gathered form the primary as well as Secondary
sources. Our research is basically EXPLORATORY RESEARCH the sources of
information were also primary like information from magazines, direct interviews &
company reports; its includes exhausted study of consumer attitude through
questionnaires.

Preliminary literature

Data gathered from A & M and surfing the net. Besides report also incorporates the
information gathered from newspaper and journals indicating the presents scenario and
other information.

Company literatures : Have also been gathered from companies like GE capital,
CYBERSIS & PARSEC ,

Directive Interviews : of people active of associated with the call centers in above
mentioned companies have also been incorporated which otherwise could not be gathered
by above means.

Questionnaire : We got the questionnaires filled form consumer to have find general
awareness level
From 1st question, we were able to analyse the perception of people about whether they
will like to talk information on phone. Everyone agreed to the idea. This was a disguised
questionnaire through which really need for call center’s in there in market or not.

Industry -wise preference for which a consumer will prefer to retrieve information and
also inquire about a product or service. Our sample size was 200 .Objectives was also to
find out existing discrepancies in service sector industry and where lies the scope in the
future of this; whether the people are aware of various services offered by call centers
relevant to consumer directly etc

MARKET ANALYSIS:
NEEDS FOR CALL CENTER

As global competition intensifies, selling the right product at reasonable prices no longer
guarantees commercial success. In the quest for profit and market share, business care
confronted with myriad challenges, such as keeping up with rapid technological
advances, deregulation, changes in consumer behaviour increasing cost and
considerations.

As companies struggle to compete in an increasingly global, deregulated and fast moving

industries, one of the key initiatives they commonly undertake is an effort to get to know
their customer better. The logic is that by having better knowledge of their customers,.
Companies will be able to more effectively interact with an serve their customers. This
will improve customer retention and profitability. At the same time, firms sting to
maintain margins at acceptable levels find the necessity to cost reductions in all
operations more an more urgent. These competing imperatives to reduce operating cost
while improving customer intimacy and service quality- are the drivers behind a call
center.
An effectively deployed call center at the core of the business strategy can provide the
significant advantage companies look forward to such centers can become the focus of
value added customer contact, combining all portals to enterprise including telephone,
tax, e-mail and the web.

How call centers are evolving

Every business small or large is looking for a competitive advantage. With the quickly
changing business environment, this challenge is ever more difficult. Not, only are
customers more demanding than in the past, but they have a wider range of options
available to them.

At the same time, customer service as a differentiator is disappearing. Everyone now

expects good, fast, efficient service so this has become mere table stakes. As a result, the
focus is moving to customer loyalty. This means increased customer satisfaction and
retention, which depends upon fulfilling customer expectations and building stronger
relationships customer intimacy. Profitability, therefore, relies not only on the initial sale
but on supporting a customer throughout the life cycle.

Today, the focus is shifting from quantity of agents to quality to increase customer
satisfaction, with agents who have specific skill sets and are able to serve more than one
function:

The traditional call center was designed to handle large volumes of a single call type.
Agents belonged to a single group or queue rarely handled calls outside that domain.

Diagram

This shift to skill based call centers is a result of many factors. Customers expect and
demand more in terms of service- it can be the key to differentiation in a highly
competitive marketplace. The call center workforce has also evolved – employers must
manage dispersed work groups while balancing increased demand for employee
empowerment.
Another trend affecting call center technology is the development of open interfaces and
shift toward client server architecture, resulting in an integrated suite of applications.

Call center protects the customers investment by providing state of the art technology on
an open, industry standard platform.

POTENTIAL FOR INDIA

As per a survey done by NASSCOM, IT Enabled Services can generate the following
amount of revenue and employment for India in the next ten years.

FEASIBILITY STUDY…………………

GLOBAL MARKET FOR CALL CENTERS

Call Center is used by large services and manufacturing organizations to provide

customer information and services. Call Centers are used for responding to customer
queries, telemarketing, conducting customer survey etc., This technology help these
organizations in effectively acquiring new customers, retaining valued customers,
servicing and selling to existing customer.

⮚ International Data Corpo. Reports that the amount of money organizations spend on
Call Center Services will jump from $ 23 billion in 1998 to $ 58.6 billion in 2003.

⮚ Frost and Soljivan Inc. reports that there are more than 1,00,000 Call Centers
worldwide, a number that is expected to hit 3,00,000 by 2001. Additionally, the
number of people working in Call Centers is expected to increase from 9 million in
1999 to 18 million in 2001.

⮚ There are about 80,000 commercial Call Centers in US and Canada.

⮚ This market is growing at a rate in excess of 27% per year, as per G2R Inc., a
mountain view research firm.

⮚ In UK there were 1,62,000 lacs cal center agents at 4000 call centers handling 25
million domestic and internet calls per week in 1996.
⮚ Frost and Sollivan expects the number of Web enabled Call Centers to skyrocket,
with a compound annual growth rate of 110% between 1998 and 2004.

⮚ The Gartner group estimates that 70% of business transactions are done by phone,
making this the primary form of customer contact. Much of this business is now
carried out in call centers.
Some of the industries using Call Centers technologies ware:

⮚ Brokerage

⮚ Insurance

⮚ Banking

⮚ Credit Card Services

⮚ Finance

⮚ Government

⮚ Health Care

⮚ Education

⮚ Distribution

⮚ Direct Marketing

⮚ Utilities

⮚ Telecommunication

⮚ Service Bureaus

Today the growing trend in US and Europe is to outsource the call centers applications to
countries which offer cost and quality advantage over the existing costs there. India has
an important role to play in the outsourcing and out locating market.

RISKS AND ISSUES

While this is an attractive proposition it is not without risks. Some of them are:

⮚ This business since it is labour dependent, needs excellent human resource and
management skills. A hand on approach and sensitivity in dealing with human being
is required.

⮚ Non availability of proper training to the agents.

⮚ Not being marketed as profit centers.

⮚ Infrastructure deficiencies, especially redundancy for telecom IPLC links.

⮚ Cultural difference between India and USA.

⮚ Political and other destabilizing factors. The casual Indian attitude to discipline and
the habit to unleashing bundhs for ridiculous reasons can also disrupt operations.

⮚ Any fault in communication lines can effect the business.

Power

This is not an energy intensive setup since it comprises mostly computers.

Accommodation

A leased/owned office space of about 800-1000 sq. feet is adequate for 100 seats call
center.

Management

This operation requires a CEO with excellent human resources management and
operational skills. In addition the following staff are required:

⮚ Manager-Operations

⮚ Manager – HRD

⮚ Supervisors

⮚ Accountants

⮚ Office attendants

⮚ Secretary/Adm.staff

⮚ Call center agents

⮚ Office Executives
Project Highlights

⮚ 100% EOU with all attendant benefits

⮚ No excise/sales tax regulatory restrictions

⮚ Market potential is extremely huge

⮚ No inventory, only wage cost

Low breakeven levels.

AREA OF CONCERN
As indicated in the NASSXOM study, potential areas of concern for India include lack of
strong reliable infrastructure and a high cost base. This is particularly critical in area like
telecom with problems like inadequate bandwidth and high cost of bandwidth. The
bandwidth charges in US are one twentieth of those in India. The government has tried to
increase availability of bandwidth and reduce cost by having a liberal policy for private
players. VSNL, the monopoly international carrier has also leased additional bandwidth
to meet demand.

In order to secure international clients, Indian companies also have to convince them
about their ability to maintain the highest standards of security and data recovery for the
data centers. This could be difficult with India’s traditional perception as a high-risk
destination. However, India’s strength in software in changing these perceptions and
could provide it with an advantage over other developing countries.

A potential threat to the data center industry is a potential shortage of manpower if user
industries like call centers/ASPs suddenly experience huge growth. Other concerns
arising from this include potential reduction in quality of service due to lack of skilled
professionals. This could cause long-term damage to the reputation of the industry
competitors.
Another area of concern is the lack of a well-developed local industry for data centers.
This is essential as they could provide valuable experience for entry into international
operations. This could provide prior on-the-job training for professionals equipping them
for providing international standards in services.

Although efforts are being made to solve these problems, these crucial areas require more
concerted effort if India has to capture a significant chunk of the data centers market.

GOVERNMENT INCENTIVES
Hi-tech Habitats for ITES: The National Taskforce on IT and Software Development
has recommended Hi-Tech Habitats where supportive infrastructure for proliferation of
ITES would be made available. The government will promote these habitats in the rural
hinterland adjacent to suitable cities. Initially, five are planned in the rural hinterland of
Bangalore, Goa, Calcutta, Ahmedabad, Thiruvananthapuram, Chandigarh, Chennai,
Hydrabad, Delhi and Bhubaneshwar. It is estimated that progressively 50 such Hi-Tech
Habitats can be viably set up by empowering the states to take the initiative.

Tax benefits for ITES through section 80HHE: The government has moved rather
proactively on this front and has already made an important amendment in tax laws to
benefit companies providing some of these services. Accordingly profits derived from
exports of these qualify for Income tax exemption.

Telecom Infrastructure: The government has recently released first set of terms and
conditions that are broad based and are aimed at liberalizing the data center operations in
India. The international data centers will be permitted on IPLCs only and will cater to
calls from foreign-end, PSTN. However no PSTN connectivity will be permitted to
Indian-end. On Indian-end, even linking to any private or public network is not permitted
for the IPLC, even it is of the same organization. However no other interconnectivity,
except as permitted as above, with any public or private network, is permitted to the data
center set up.
Venture capital : Financial boutiques and funding agencies are taking a proactive view
of potential offered by this industry. Large number of VC companies are funding
companies in areas of call centers and back-office operations.

INITIATIVES FROM THE STATES

Realizing the employment potential states are vying with each other for wooing large
companies to set up ITES units in their states.

● Karnataka, Tamil Nadu, Maha-rashtra, Rajasthan, Goa, Gujarat, and Orissa have
announced special and attractive initiatives. For instance, Karnataka is developing
“Grameen Data Processing Centers” around Bangladesh in Places such as Mysore.

● States like Himachal Pradesh, Delhi and Uttar Pradesh are in the process of
announcing special policies.
 IT Enabled Services Employed Rs. Can be Rs. Core
Crore Employed

Data Entry/Data 9700 420 260000 19000

Conversion/Bank Office
Operation/Revenue
Accounting

Remote Maintenance and 1600 65 180000 13500

Support

Medical 3800 140 160000 11000

Transcription/Insurance
Claims Processing

Call centers 1000 40 150000 8500

Database Service 1000 45 100000 6500

Content Development 5500 270 250000 20000

22600 980 1100000 78500

PRIME INDUSTRY TARGETS

Undoubtedly, the IT Enabled Services is an essential infrastructure for most larger

organizations. However, its very nature is particularly suited to service organizations
which experience large turnover of data, have a frequent and extensive customer
dissatisfactions is low. In view of such as imperative, some of the industries that may be
pursued are:

⮚ Insurance

⮚ Banking

⮚ Financial Institutions

⮚ Hospitality

⮚ Large Hospitals

⮚ Consortiums of Legal Firms

⮚ Software/Hi-tech Companies that have to provide 24 hour helplines

⮚ Large manufacturing companies

⮚ Airlines

⮚ Utilities

OPPORTUNITIES FOR INDIA

⮚ India offers many advantages to serving as an IT Enabled Services Destination for

major global companies These include:

⮚ A virtual 12 hours times zone difference with USA and other major markets for IT
Enabled services.

⮚ A huge pool of English Speaking and computer literate graduate manpower who can
continue to cater to the growing demand for professionals for IT Enabled Services.
These professionals are skilled as well as semi-skilled.

⮚ Cost of qualified personnel is amongst the lowest in the world.

⮚ Stable legislative and economic framework.

⮚ Support of Government of India for all IT led industries.

⮚ Thrust by Government of India to make India an IT driven nation with a focus on

services sector where potential for value addition and thus premium is higher.

India enjoys very string brand equity in major markets, thanks to its growing and globally
competitive software industry

WIDE AREA NETWORK

Wide area network can be provided by

⮚ International private leased Line (64 kbps TO Nbps) will be arranged through VSNL and
any International Bandwidth Provider.
⮚ Domestic connectivity can either be provided through Leased Lines (64kbps TO 2Mbps)
will be arranged through VSNL/ MTNL or Radio Link connectivity through VSNL.

⮚ VSNL will take care of the first half circuit i.e. it can provide a connectivity from VSNL
gateway at India to international gateway. International Bandwidth Provider will provide a
connectivity from international gateway to the desired country from where the call center
business is expected

GOVERNMENT IMPLICATIONS

The Department of Telecommunication has decided to permit the establish mail to ‘call-
centers’ by organizations to facilitate better services to the public. The DoT has already
gone ahead with the decision to set up its own call centers, initially at Jammu,
Chandigarh, Shimla, Ambala, Jaipur, Dehradun, Lucknow, Patana, Calcutta, Guwahati,
Shilong, Bhubaneswar, Bhopal, Huderabad, Chennai, Bangalore, Thiruvananthapuram,
Pune and Port Blair and catering to the services such as information on new telephone
connection, billing for existing subscriber, states of faulty lines and shifting application,
according to press release.

To set up these centers, the requirement will have to be registered with the Customer
Services Branch of the DoT, Telecom Commission Headquarters at Sanchar Bhavan.
These centers will be permitted on a non-exclusive basis. Call centers can be of two types
international and domestic depending on the requirements. In case of international call
centers, the public switched telephone network (PSTN) connectivity is permissible only
at the foreign end and not at the Indian end. However, domestic centers are permitted to
have inbound PSTN traffic with the outgoing barred.

No interconnectivity of the international and domestic centers will be permitted.

However, interconnectivity of two domestic call centers of the same organization is
permissible subject to DoT approval.
STATUS OF CALL CENTERS IN INDIA

The following conditions are to be implied to set up intentional call center in India:

I. Interconnectivity with other network/DTS links at India are not permitted. The
PSTN connectivity is permissible only at the foreign end and not at the Indian
end.

II. Separate Earth Station is not permitted, since VSNL is providing IPLC link.

III. FIPB clearance, Foreign equity, NRI involvement, E-Commerce activity, and
legal connectivity, with Foreign end collaborator are to be provided with
application.

IV. Schematic Network diagram with full equipment details with specification, IPLC
details Indian / Foreign end locations should be shown and it should be clear in all
respect.

V. For call center involve in E-Commerce activities, the foreign equity, cap is 49%
and for others, there is no restriction (i.e., foreign equity can be 100%).

VI. An international private lease circuits, multiplexers with compression techniques,

predictive dialers, EPAX, operator (Agents) positions etc. are permitted, for all
purposes, the call centers at India is treated as extension of PSTN from foreign
end.

The conditions to be adhered to set up domestic call centers are furnished below:

I. This domestic call centers are permitted to have inbound PSTN traffic with the
outgoing banned.
II. The domestic call centers are permitted to be setup, on a separate infrastructure.
However, the request for operating call center on the existing private networks
will be evaluated in CS Branch of DTS and may be permitted, if found in line
with the present regulations.

III. Interconnectivity of two domestic call centers of the same organizations in

permissible subject to further approval from DTS.

IV. Interconnectivity of the international with domestic call center are not permitted.

V. The party shall declare the indicator number of DEL, terminated on leased lines
for call centers.

VI. For setting up of call centers, the intending organization of private/government

will have to register their requirements with the C.S. branch of DTS, TCHQ,
Sanchar Bhawan, New Delhi enclosing the detailed schematic showing the
complete end terminated details, addresses, along with the connectivity to any
private or public network if any, at each of the proposed location.

Ques. : What are the advantages that an Indian call center can bring to a prospective
customer outside the region? How do you make the case that an Indian company can do
the job for an American or European (or other regional) company, despite the geographic
remove? Is it based on labor or technology, or some other factor(s)?

Rs.: Some of the factors include the booming IT industry, the largest English-speaking
population after the USA, a vast pool of skilled labour (English speaking and numerically
literate) and a low cost of workforce. With overhead a call center agent cost between $
50-100K per annum in the US; in India that would be $ 10k, plus add $ 20k for telecom
costs and higher infrastructure costs-this means a prospective saving of $ 20 – 70k per
agent per annum. This saving can be split among the call center and the customer. These
are some of the advantages India offers to attract foreign traffic.
Another big potential area is tech support. Indian graduates about 100,000 engineers each
year. These can be used in call centers for troubleshooting/tech support as the salaries are
dramatically lower than in Europe or the US.

In fact, one company in India proposes to hire 300 Ph.D.’s to provide very high-end
consulting over the phone/ videoconferencing. Given these advantages, Indian could
build a $ 17 billion industry by 2008 according to the NASSCOM McKinsey Report.

OURSOURCING MARKET

The total center outsourcing market in the US in 1998 $17 billion. (Source: IDC, 1999)

The call center outsourcing market in Europe will double from $7 billion in 1999 to $15.1
billion in 2003.

The total number of agent positions in European outsourced call centers will reach
1,27,000 in 2003, from about 74,000 in 1999.

Germany will replace UK as the biggest oursourced call center market.

Telecommunications emerged as the biggest vertical market for call center outsourcing in
Europe by accounting for 24 percent of the total market in 1999. Financial services
accounting for 20 percent, distribution/consumer products 16 percent, and technology
industry accounting for 13 percent were the other big markets.

Inbound customers services emerged as the top application replacing outbound

telemarketing. Inbound calls accounted for 41 percent of total outsourcing calls. Inbound
helpdesk accounted for 15 percent, while outbound sales lead generation accounted for
20 percent of calls.

Use of the Internet to contact small call centers will increase by more than 185 percent by
2001.
By 2001, predictive dialing technology is expected to have achieved 21 percent
penetration in the European small call center market with slower uptake due to relatively
small gains in productivity through this technology.

By 2001, the penetration of IVRs in small call centers/helpdesks is expected to be 49

percent.

ONLINE CUSTOMER SERVICE

IUS e-commerce service providers lost about $6.1 billion due to abandoned online
truncations. They are likely to lose a cumulative more than $173 billion in potentially
salvageable sales over the next five years. This is due to poor online customer service.

The average company could have improved its online sales figures by almost 35 percent
last year if it had provided better online customer service for potential customers.

56 percent of the firms studies in a research on the effectiveness at serving customers and
prospective customers online at the top Nroth American financial institutions revealed
that they either did not accept Web-based queries or did not respond to e-inquiries placed
online by potential.

Only 36 percent of online are satisfied with their experience.

Only 21 percent of online customer receive an acknowledgement of their queries within

an hour and only 42 percent receive one within 24 hours.

One-fourth of all companies are pushing outgoing e-mails to customers with suggestions
and promotions. Only one-third of e-customers indicate a high interest in receiving such
e-mails.

WEB AND CALL CENTER

Nearly two-third of Web users are unwilling to purchase products without human
interaction.
Users must decide whether they are Web-enabling their call centers or call center
enabling their websites. The end result may appear the same, but the two are different.
The differences are in what rules the call center applies to initiating interactions, how the
business case is constructed, and how “success” is measures. When user organizations
Web-enable their call centers, they are typically either using the Web as a ‘front door” to
the call center or are using the Web to enhance the effectiveness of call center
interactions. Businesses that take his approach are usually highly committed to tele-
business to the extent that it provides their bread and butter. Their web sites are not
primarily used as a customer interaction point and they may choose to carry out
interactions via the Web that are not cost-effective in the call center. When user
organizations call center enable the Web, they are typically either increasing the success
rate of Web transactions or providing a back-up for problems that can not be resolved via
the Web. Businesses that take this approach are usually committed e-commerce players
that want to supplement the effectiveness of their e-commerce operations. If they have
repeat customers doing low value transactions, a common objective is to use the call
center to “train” the customer in self-service.

By 2002, only 20 percent of call centers will have integrated live Web contacts E-mail
Response management Systems (ERMS) with their telephone-based agents (0.8
probability).

By 2002, companies that have integrated live Web contacts or e-mail with their telephone
based agents will experience din excess of 25 percent performance improvements (for
example, in sales, operations, etc.) in targeted interactions (0.7 probability)

By 2005, 70 percent of call centers in geographic areas with high Internet adoption rates,
such as North America and parts of Europe will support integrates, live Web contacts and
ERMS for their telephone based agents (0.8 probability).

FINANCIAL ANALYSIS
PROJECTED BALANCE SHEET

SOURCES OF FUNDS:

S.No Source of Fund I Year II Year III Year IV Year

1. Shared Capital 250.00 250.00 250.00 250.00

2. Reserve & - - 77.65 359.65

Surplus

3. Term Loan 250.00 400.00 400.00 400.00

4. Working Capital 138.79 200.00 200.00 200.00

Loan

5. Creditor for 150.00 - - -

Capital Goods

Total 788.79 850.00 927.65 1,209.9

APPLICATION OF FUNDS:

1) FIXED ASSETS:

S.No Fixed Aseets I Year II Year III Year IV Year

I Computer 226.00 226.00 226.00 226.00

Hardware/
Software

ii. CRM Application 300.00 300.00 300.00 300.00

iii. Infrastructure 100.00 100.00 100.00 100.00

iv. Vehicles 0 0 20.00 20.00

 626.00 626.00 646.00 646.00

Less: 88.60 177.20 267.70 358.20

Depreciation

537.40 448.80 378.30 287.80

2) CURRENT ASSETS:

S.No Current Assets I Year II Year III Year IV Year

i. Debtors 30.96 43.35 68.08 86.69

ii.. Lease Line Cost 45.00 75.00 105.00 125.00

iii. Advance Rent 45.00 45.00 45.00 49.50

Paid

iv. Advance 27.55 55.00 70.00 90.00

Expenses Paid

v. Contingency 10.00 10.00 10.00 10.00

vi. Cash & Bank 4.28 2.09 11.27 1.00

Balance

vii. Profit & Loss 88.60 90.76 - -

Account(PBDI
T)

Other Assets

Repayment of - 80.00 240.00 400.00

Term Loan

Repayment of - - - 160.00
Working
Capital Loan

TOTAL 788.79 850.00 927.65 1209.99

PROJECTED INCOME AND EXP. A/C (Rs. In thousand)

I Year II Year III Year IV Year

INCOME

Sales 37,152 104,077 158,515.20 208,051.2

EXPENDITURE

1. Lease Line cost 8,640.00 26,000.00 42,000.00 50,000.00

2. Technical Cost 9,055.00 28,040.00 43,365.00 66,282.00

3. Administrative Cost 13,217.0 33,393.00 41,059.00 51,485.00

30,912.0 87,433.00 126,424.0 167,767

Profit before Interest & 6,240.00 16,644.00 32,091.20 40,284.20

Depreciation

Interest on Loan 6,240.00 8,000.00 6,200.00 3,000.00

Profit before Depreciation - 8,644.00 25,891.20 37,284.20

Depreciation 8,860.00 8,860.00 9,050.00 9,050.00

Profit before Tax (8,860.00) (216.00) 16,841.20 28,234.20

Income Tax - - - -

Net Profit (8,860.00) (216.00) 16,841.20 28,234.20

ADMINISTRATIVE EXPENSES:

a) Rent 5,850. 0 9,000.00 9,000.0 9,000.00

b) Salaries
 - CEO/Directors Remuneration 1,440.0 2,880.0 4,320.0 5,184.0

- General Manager 600.00 1,200.0 1,800.0 2,400.0

- Accountants 300.00 330.00 400.00 480.00

- Manager Comm/ Administration 180.00 198.00 238.00 286.00

- Office Attendants 240.00 480.00 575.00 690.00

- Over Head on Staff 600.00 900.00 1,080.0 1,296.0

- Reception @ 10000/- 100.00 180.00 216.00 259.00

c) Electricity & Water Charges 150.00 675.00 1000 1,400.0

d) Telephone & Fax 200.00 480.00 800.00 1,000.0

e) Transportation 500.00 700.00 1,200.0 1,500.0

f) Staff Welfare 100.00 300.00 400.00 500.00

g) Gen-set Operation 100.00 300.00 400.00 500.00

h) Local Conveyance 132.00 300.00 500.00 600.00

i) Travelling 150.00 400.00 600.00 700.00

j) Foreign Travelling 400.00 800.00 1,200.0 1,500.0

k) Books & Periodicals 80.00 200.00 300.00 300.00

l) Printing & Stationary 60.00 120.00 180.00 240.00

m) 0ther Misc. Expenses 100.00 200.00 300.00 400.00

n) Maintenance - 10,000.0 11,000 15,000

o) Insurance 135.00 150.00 150.00 150.00

p) Business Development 1,800.0 3,600.0 5,400.0 7,200.0

TOTAL 13,217 33,393 41,059 51,485

TECHNICAL COST:

a) Salaries
 - CC Agents Salary 3,500 17,820 28,700 47,520

- Network Engineers @35000/- 315.00 462.00 555.00 666.00

- Supervisor @70000/- 630.00 1,980.0 3,600.0 4,752.00

- Manager – HRD 150.00 198.00 300.00 400.00

- Assistant Manager – HRD 60.00 120.00 180.00 240.00

- Training Expenses 2,100.00 3,060.0 3,670.0 4,404.00

b) Recruit Expenses 300.00 800.00 960.00 1,100.00

c) Marketing Person Abroad 2,000.00 3,600.0 5,400.0 7,200.00

TOTAL 9,055.00 28,040 43,365 66,282

 PROJECTED CASH FLOW STATEMENT

CASH INFLOWS:

CASH INFLOW I YEAR II YEAR III YEAR IV YEAR

1. Increase in Share 250.00 0 0 0

Capital

2. Increase in Term Loan 250.00 150.00 0 0

3. Cash flow 0.72 86.44 258.91 372.8

4. Increase in Capital 138.79 61.21 0 0

Loan

5. Increase in cash & - 2.19 - 10.27

Bank Balance

Total 639.51 299.84 258.91 383.11

CASH OUTFLOWS:

CASH OUTFLOW I YEAR II YEAR III YEAR IV YEAR

1. Purchase of Asset 476.00 150.00 20.00 0

2. Repayment of Loan - 80.00 160.00 320.00

3. Decrease in working 158.51 69.84 69.73 63.11

Capital

4. Decrease in cash & Bank 5.00 - 9.18 -

Balance

Total 639.51 299.84 258.91 383.11

PROJECTED COST ALLOCATION: HEAD WISE

 HEAD ESTIMATED COST (Rs.)

Telecom 70 Lakh

Computer Hardware 70 Lakh

And Software/ Networking

CTI/CRM Application 105 Lakhs

Infrastructure 80 Lakhs

Consulting 2 Lakhs

Implementation & 4 Lakhs

System Integration

International Link installation Cost 4 Lakhs

Working Capital & 120 Lakhs

Preoperative Expenses

TOTAL CAPITAL COST 457 Lakhs

NOTE:
1) All the prices mentioned are EOU prices. The customer will have to provide project certificate and CT3
form to avail of exports benefits.

2) As the project is EOU so all the income from the project is TAX FREE

The cost of VSNL 512 kbps half circuit cost is 49.92 lakhs. It is assumed that the other half will also
cost the same amount. The last mile connectivity for Radio Link of 512 kbps would be Rs.15 lakhs and
for copper lease line connectivity would be approximately 4 lakhs
Assumptions :

1. Land is taken on rental basis.

2. Call center with 100 agents

3. Rate offered for call center services is normally $10-$15 per hour
per agent. For calculation purpose we are assuming that the rate
offered is $ 12 per hour per agent.

4. All calculations are done for one shift of 8 hours (Call Center
normally shall be operating on 3 shift basis).

5. Working will be for 30 days in a month.

6. Area required for operation 10000 sq. feet. Rent is charged @

Rs.15 per sq feet.

7. Interest is charged at a rate of 17% per annum on total investment

of 589 lakhs.

8. Cost of 1 US$ = Rs.43/-

REVENUE PROJECTIONS:

Total Revenue Generated per Month 12*8*100*30 = $2,88,00/-

Rs.1, 23,84,000/-

Revenue Generated per month by 100 1,23,84,000.00

Seat Call center

Expense per month 150,000.00

* Rent

* Office Expenses 4,85,000.00

* Salary 23,87,000.00

* Training 2,15,000.00

* Maintenance 2,50,000.00

* Interest 8,34,000.00

* Communication Cost (1 Mb full 15,11,000.00

ckt – Radio Link)

* Business Development 3,00,000.00

Total Expenses per month 61,32,000.00

Profit per month 62,52,000.00

NPV
In 000’s
1st yr 2nd yr 3rd yr 4th yr

PAT -8860 -216 16841.2 28234.2

ADD:
DEP 8860 8860 9050 9050
PAT+DEP 0 8644 25891.2 37284.2

Discounted @ 12% 0 6890 18427 23687

Discounted cash flows 49004

Less:
Intial capital outlay 45700

NPV 3304

IRR:

OPTIMISTIC: 18%

MOST LIKELY: 15%

PESSIMISTIC: 13%

Cost of Capital i.e. k has been taken as 12%

Net Profit Margin -0.24 -0.002 0.11 0.14

Gross Profit 0.83 0.84 0.8 0.81
Margin

Current ratio 2.42 3.6 3.36 3.25

Debt equity ratio 1 1.6 1.6 1.6

TECHNICAL ANALYSIS:
Products to be supplied by this company.

Predictive Dialer
IVR Systems
Phone Software
CRM Software
Voice Broadcasting
Phone Dialer Software
IVR Outsourcing
Voice Messaging
ACD Systems
Interactive Voice Response

Application Development Tools

The foundation of DSC has been its application development tools. With a clear goal of
providing programmers and non-technical staff with tools to build database applications,
DSC constructed a suite of application development software that has been installed
worldwide across every major industry and government level. Products such as database
management systems, windows development tools, report writers, and programmer aids
are just a few of the products introduced by DSC.

CRM Software (Customer Relationship Management Software)

Telemation, our contact management software, has been our flagship product for a
number of years. It is a CRM software tool that empowers our users with the ability to
create telemarketing and CRM applications and call center software. Installed in call
centers throughout the country, Telemation set the standard for power and flexibility
throughout the contact center community. With rich contact management software
features and computer telephony integration including predictive dialing and predictive
dialer software, our CRM software has powered both inbound and outbound centers for
more than a decade.

Call Center Smart Predictive Dialers

The PACER phone system is a PC based call center phone system that is recognized as
one of the premier inbound and outbound computer telephony systems. Features such as
automatic call distribution (ACD), interactive voice response (IVR) and call recording
have added a new dimension to the predictive dialer capabilities of this system. The
PACER IVR System with Text To Speech software acts as a stand-alone solution that is
ideally suited for IVR outsourcing. Our computer telephony software and softphone
opens this phone system to outside applications and developers. When combined with our
Customer Relationship Management CRM software, the PACER predictive dialers and
IVR systems are complete call center software solutions. And our new SMART
Predictive Dialers revolutionize predictive dialing. Your call center can become instantly
more productive with more calls handled by fewer agents, including work at home
employees. Our predictive dialers far outpace old predictive dialer technology.

Computer Telephony Software (CTI)

To take full advantage of the technology provided by Database Systems Corp. we have
developed a suite of computer telephony software that enhances existing PC, Web and
Unix applications by providing telephony access to our PACER predictive dialers (as
well as other PBX systems). Our CTI software comes with a standalone softphone as well
as CTI middleware that can be embedded in user applications. This computer telephony
software "opens" our PACER predictive dialers to outside applications.

Voice Broadcasting and IVR Outsourcing

To further assist clients who wish to use our technology, we have developed numerous
applications using our phone dialer software that complement our smart predictive dialer.
These applications can be provided on in-house customer systems or can be outsourced at
our IVR (Interactive Voice Response) and Voice Broadcasting Toll Free Service center.
The following are just a few of these industries and applications that are ideally suited for
our voice broadcasting solutions

ANNEXURE:

Business Process Outsourcing- The New Growth Sector

● Global outsourcing spending is projected to top $1.2 trillion by the end of 2003.

● Globally, outsourcing spending is increasing by 11 percent per year.

● Two thirds of the outsourcing spend is in large Fortune 500 companies.

● Two-thirds of outsourcing spending is in the US.

● Shrinking margins will force more companies to break with tradition and consider
BPO to reduce operating cost.

● A lot of demand is expected to be generated by HR processes especially payroll

Management

● In India , ITES-BPO segment registered a growth of 59% to reach Rs. 113bn (US
$2.3 billion)
 ● According to current industry estimates, India commands more than 90% of all
offshore outsourcing in IT services

● ITeS contributed 25% to the total IT Software and Service exports from India
during FY03

● Captive ITES-BPO players have almost doubled their share in Indian software
exports, growing by a phenomenal 90% in last financial year

● ITES-BPO segment is projected to register a growth of 54% to clock revenues of

US$ 3.6 billion during FY2003-04

● The ITeS industry is expected to grow to Rs. 810bn in 2008.

The rising growth of the call centers in India is part of the lucrative offshore migration
by the US corporate sector. NASSCOM the nodal body of software and services
companies in India has touted the industry to be worth $142 billion by 2008 denoting the
existing market status. Call-centers in India under the current service spectrum are
amongst the cheapest market for such services.

Professionals in the Call Centers in India have come at par with the service
requirements of the international standards. It comes as a surprise to know that India has
the second largest English population next only to US. Add to it, the Information
Technology structure in India is already strong enough giving Indian call bound
professional a perfect edge for the international market

3.3-million white-collar jobs moves overseas in 15 years

The offshore phenomenon is catching on the fever as more and more corporate biggies
are actually looking to go offshore for business development techniques. The call center
industry in India has a great to role to play in it. Research firm Gartner suggests it costs
half as much to operate a call center in India than in US. By 2018, Forrester predicts,
U.S. employers will move about 3.3-million white-collar jobs and $136-billion in wages
abroad. And while India is offering low-priced call center facilities – the mass exodus
cannot be written off.

Call-centers in India despite of the outrageous comments and demonstrations have

grown immensely during last few years. The growth for the call-centers in India is close
to 35% annually and that will remain in tandem for coming few years. As the US and
European corporate clients are virtually knocking to move offshore – India is at a gain.
The call-center industry in India constitutes major US and European companies as
DELL, Oracle, British Airways, Prudential etc. to name a few.
-

 Types of services

OUTBOUND SERVICES
* Tele Research
* Tele Marketing
* Subscription Renewal
* Data Capture
* Data Verification
INBOUND SERVICES
* Complaint Recording
* Booking Orders
* Customer Service Help line
* Query handling
* Sales Support Help line
* Real time Credit and Billing Problems
* Database Management
* Lead generation and follow up
For more information, you can contact the

SUPPLIERS

For Network and Desktop environments

1. PARSEC GROUP

Consultants

2. RSA TELESERVICES

EQUIPMENT SUPPLIERS

3. Database systems corp.