Adrianne Yamaki, a 32-year-old management consultant in New York, travels constantly and logs 80-hour workweeks. So to eke out more time for herself, she routinely farms out the administrative chores of her life — making travel arrangements, hair appointments and restaurant reservations and buying theater tickets — to a personal assistant service, in India.
Kenneth Tham, a high school sophomore in Arcadia, California, strives to improve his grades and scores on standardized tests. Most afternoons, he is tutored remotely by an instructor speaking to him on a voice-over-internet headset while he sits at his personal computer going over lessons on the screen. The tutor is in India.
The Bangalore butler is the latest development in offshore outsourcing.
The first wave of slicing up services work and sending it abroad has been all about business operations.
Computer programming, call centers, product design and back-office jobs like accounting and billing have to some degree migrated abroad, mainly to India. The internet, of course, makes it possible, while lower wages in developing nations make outsourcing attractive to corporate America.
The second wave, according to some entrepreneurs, venture capitalists and offshoring veterans, will be the globalization of consumer services. People like Yamaki and Tham, they predict, are the early customers in a market that will one day include millions of households in the United States and other nations.
They foresee an array of potential services beyond tutoring and personal assistance like health and nutrition coaching, personal tax and legal advice, help with hobbies and cooking, learning new languages and skills and more. Such services, they say, will be offered for affordable monthly fees or piecework rates.
Globalization of consumer services faces daunting challenges, both economic and cultural. Offshore outsourcing for big business thrived partly because the jobs were often multimillion-dollar contracts and the work was repetitive. In economic terms, there were economies of scale so that the most efficient Indian offshore specialists could become multibillion-dollar companies like Infosys Technologies, Tata Consultancy Services and Wipro Technologies.
It is not all clear that similar economies of scale can be achieved in the consumer market, where the customers are individual households and services must be priced in tens or hundreds of dollars.
Then there are the matters of language, accent and cultural nuance that promise to hamper the communication and understanding needed to deliver personal services. Already, some American consumers voice frustrations in dealing with customer-service call centers in India. At the least, the spread of remotely delivered personal services will be a real test of globalization at the grassroots level.
Even optimists acknowledge the obstacles. In a report this year, Evalueserve, a research firm, predicted that “person-to-person offshoring,” both consumer services and services for small businesses, would grow rapidly, to more than $2 billion by 2015. Yet consumer services, in particular, are in a “nascent phase,” said Alok Aggarwal, chairman of Evalueserve and a former IBM researcher.
Veterans of the business offshoring boom predict an emerging market, but most are not investing. Nandan M Nilekani, co-chairman of Infosys, said there is “definitely an opportunity in the globalization of consumer services,” and he listed several possibilities, even psychological counseling and religious confessionals. But, he added in an e-mail message, “This is just ‘blue sky’ thinking! We have no business interest at this point in this direction.”
What the offshore consumer services industry needs, it seems, is a solid success story in some promising market.
A leading candidate to watch, according to analysts, is TutorVista, a tutoring service founded two years ago by Krishnan Ganesh, a 45-year-old Indian entrepreneur and a pioneer of offshore call centers.
Concerns about the quality of K-12 education in America and the increased emphasis on standardized tests is driving the tutoring business in general. Traditional classroom tutoring services like Kaplan and Sylvan are doing well and offer online features. And there are other remote services like Growing Stars, Tutor.com and SmarThinking.
Yet TutorVista, analysts say, is different in a number of ways. Other remote tutoring services generally offer hourly rates of $20 to $30 instead of the $40 to $60 hourly charges typical of on-site tutoring.
TutorVista also stands out for its well-known venture backers, its scale and its ambition. The two-year-old company has raised more than $15 million from investors including Sequoia, Lightspeed Venture Partners and Silicon Valley Bank. TutorVista employs 760 people, including 600 tutors in India, a teaching staff it plans to double by year-end. Its 52-person technical staff has spent countless hours building the software system to schedule, monitor and connect potentially tens of thousands of tutors with students oceans away.
To date, TutorVista has signed up 10,000 subscribers in the United States, and its British service, rolled out in September, has 1,000.
Ramya Tadikonda has tutored Kenneth Tham, among many others, from her home in Chennai. To achieve its ambitions, TutorVista must recruit, train and retain thousands of tutors like her.
NYT
