The Riddle for Edgetech

Delivering an outstanding customer experience at an affordable cost

*This case study has been designed for iCreate 2016 and is for illustrative purposes only

It was raining. Virat always enjoyed the rains, but, somehow, he found it irritating today. The pouring
droplets reminded him of the heated discussions from the morning. It was getting dark and gloomy
outside he felt it mirrored his future at Edgetech. Virat felt frustrated and cornered it was a tricky
situation that needed to be handled tactfully. Through the streaks of rain, Virat reflected on how he had
got here.
Background:
Virat leads the Services category in the Supply Chain vertical at Edgetech Communications. Six months
ago, he had received the Employee of the Month Award for driving the most value in savings for Edgetech.
Edgetech is a leading global telecommunications company with operations in 18 countries across Asia and
Africa. The company ranks amongst the top 3 mobile service providers globally in terms of number of
subscribers. In India, the companys product offerings include 2G, 3G and 4G wireless services, mobile
commerce, fixed line services, high speed DSL broadband, IPTV, DTH and enterprise services including
national and international long distance services to carriers. In the remaining countries, it offers 2G, 3G
and 4G wireless services and mobile commerce. As on March 2016, Edgetech had over 357 Million
customers across its operations.
It was all going good for Virat till last week when he had a price increase meeting with one of his partners,
W Ltd. W Ltd is one of his many suppliers who provide contact centre services for the customers of
Edgetech. It was one of those usual negotiation meetings where the supplier would complain, shout and
present the client with all the escalating market cost drivers to build the case for a price rise. But Virat
knew all the tricks and he was usually one step ahead to redirect the negotiations as he wanted. Usually,
he would end with the upper hand - no rate increase which was a big win in the current inflationary
economy. He had done his homework and was confident of sailing through. But things were different this
time around.
Virat, the logic is straightforward. We just cant move ahead with this structure, said David Williams,
the MD of W Ltd.
Virat responded with his usual pitch, David, We are bigger than anyone else, have focused consistently
on increasing our customer base and acquiring spectrum to deliver the best voice quality in all our circles.
In the last five years, we have consolidated our presence in all 22 circles of India and seen an exponential
increase in customer base. During this time, we also realized the potential in the Mobile data market,
launched our 3G services pan-India and expanded our presence in 4G

David interrupted, Of course I know the volumes I am getting. You can come straight to the point rather
than beating around the bush.
Virat immediately responded No, its not only about the volume or numbers; its also about our
philosophy to win and keep customers for life. We have also announced a new initiative that allows us to
candidly display our mobile network coverage, site deployment status and signal strength across India.
With this initiative, we aim to establish complete transparency to our mobile network and make open our
network to consumer feedback and participation. The point I am driving is that we are equally open and
transparent with our supplier partners as well. I might sound rude, but I am, unfortunately, just not in a
position to give you any price increase despite the challenges. It might mean that you will lose a significant
share of our business if you remain adamant but (Deep inside Virat knew that he had taken a punt - it
typically takes 9 months to have a new partner set up and get a customer contact centre rolling; he was
banking on the partner not calling his bluff as it had worked for him in the past)
Yes, I am adamant. I cannot survive like this and I am fine to pull out and lose your volumes - I cant run
my business at a loss. So, if this is your final answer, I would like to terminate the contract, declared
David.
Virat was stunned. He tried to adapt his style- a conciliatory tone but David was not ready to budge. There
was no choice. W Ltd was not going to continue without the desired price rise. Virat knew he and Edgetech
could not afford it. He tried contacting other leaders at W Ltd but they were rigid. And W Ltd being a large
business, this would wipe out all of Edgetechs savings from services in the year and they would probably
miss their EBITDA forecasts.
He was sitting late in the office watching the rain. The mist on the window reminded him of the initial
years - when the customer contact centre was set up at Edgetech by Virat himself.

How it began:
Edgetech began its footprint in India during the turn of the century and has been growing ever since. From
2000 to 2005, Edgetech focused unilaterally on increasing its customer base and acquiring spectrum to
ensure best-in-class voice quality in its current circles. The next five years saw consolidation of this
strategy as Edgetech expanded its presence to all 22 circles in India and increased its customer base in an
exponential fashion. During this time, Edgetech also saw the potential in the Mobile data market and
launched its 2G data services. In 2010, Edgetech participated in the 3G and 4G spectrum auction and
expanded its mobile data capacity and speeds significantly.
In 2007 as the customer base growth registered healthy numbers, Edgetech saw benefit in implementing
best-in-class practices, and decided to outsource its contact services to a third party with the
understanding that the service providers would bring expertise in managing customer experience.
Being a leader in the telecommunications industry, Edgetech often saw customers being continuously
courted by competitors leading to churn and reduced revenues. Edgetech had chosen to stand apart from
the competition the company decided to positively engage customers to differentiate itself from its

competitors. In this fiercely competitive market, Edgetech realizes that customer delight as well as
delivery of top notch customer experience are indispensable to its profitability and positive branding. The
company also understood that a customers call experience at a contact center is largely dependent on
the agents ability to communicate valid information from numerous sources in an unambiguous manner.
As the ecosystem shifts to mobile data and related services, Edgetechs customer service is the primary
factor in attracting and retaining customers.
Edgetechs Customer Base and Customer Segmentation in India:
Total Customer Base in India: 536,142,000
Customer Segmentation:
a) Prepaid customer base: 307,791,000
b) Postpaid customer base: 229,851,000
The Postpaid customers are segmented basis their monthly billing as mentioned below:
a. Superia Customers: a postpaid customer with a monthly billing of INR 1000 and less per
month
b. Imperia Customers: a postpaid customer with a monthly billing of INR 1001 INR 3000 is
c. Regalia Customers: a postpaid customer with a monthly billing of INR 3001 and above
Based on the above Customer Segmentation Edgetech has categorized its contact centers as follows:
A) Prepaid contact centers these contact centers manage the call center program for the mobile
operations of Edgetech which includes inbound telephonic service interactions from existing or
prospective prepaid customers enquiring, requesting or providing feedback about products and
services offered by Edgetech.
B) Postpaid contact centers: these contact centers manage the call center program of mobile
operations of Edgetech which includes inbound telephonic service interactions from existing or
prospective postpaid customers enquiring, requesting or providing feedback about products and
services offered by Edgetech,
Virat and his team members were the one who had proposed and implemented the segregation
of the postpaid contact centers into various categories - basically the identification of high and
low revenue customers and providing customized services to these segments. Virat was quick to
realize that the nature of a call from a high revenue customer is different from a low revenue
customer. From a customer retention perspective, he wanted his high revenue customers to have
the best customer experience compared to any other competitor. Virat pioneered the concept of
differential and customized services to the different segments in Edgetechs customer base which
led to sub categorization of the Postpaid Contact centers into Superia, Imperia and Regalia contact
centers. This became an instant success in the company and Virat was highly appreciated for the
same. Each category of the customer base was handled by a different set of call agents with
different incentives offered to them, cost per connect minute and average handling times.

Virat had also developed a comprehensive framework and criteria for selecting a Contact Center Service
Provider, some of which were:
1. Presence of the Service Provider in India and its operational experience in handling customer queries
and resolving customer problems.
2. Hiring / retention abilities of the Contact Center Service provider (the industry had seen high attrition
in the past)
3. Financial strength of the Service provider and its investment capacity.
4. Current measured performance of the Service provider for an existing Service provider.

Target Set:
Recently, Virat was summoned by the Chief Supply Chain Officer- Mr Laxman who threw a new challenge
to Virat. The challenge was around the Imperia contact centers these contact centers were introduced
2 years ago with the target of providing superior customer experience to its high value customers. With
the growing customer base in the Imperia segment, Laxman wanted Virat to focus on reducing the calls
per customer and increase first time resolution rates for its Imperia customers. Laxman also informed
Virat about a 25% price increase communicated by W Ltd- one of the 2 Imperia service providers to
Edgetech.
At present, the Imperia Centers are run by two Service Providers H Ltd and W Ltd. Edgetech spends approx.
INR 150 Crs annually on its Imperia centers.
Buoyed by his earlier success with W Ltd., Virat assured Laxman that there would be no price increase.
Virat brought his team together and began exploring methods to further drive efficiency in this channel.
His team discovered many aspects around this, including some of the mandatory contractual
requirements from Edgetech to begin with:
1. Edgetech requires its Service providers to comply with the Minimum Wages Act issued by the
Ministry of Labour for each State in India. The Service provider should comply 100% with the
minimum wages required for the state in which it is operating.
2. Edgetech mandate: The minimum assured take home salary for an Agent on average should be
INR 17000
3. Educational Qualification of an Agent: Graduate with 15 years of formal English medium
education

4. Experience of the Agents: 50% freshers (recent graduates) and 50% graduates with over 6 months
of relevant experience
5. Retention Bonus for Agents retained for more than a year: INR 50000
6. The manpower & infrastructure deployed must provide to handle up to 110% of the locked
forecast volumes for the month and on any given day.
7. Both Edgetech and the Service Provider acknowledge that there may be upside variation / spike
in the call volumes on a day-to-day basis as a result of various reasons and must be prepared to
handle these variations of upto 110% on a daily / monthly basis with minimum performance
expectation on speed (90% calls answered within 30 seconds).
8. Call volume Forecast Cycle: the forecast for a given month is provided to the vendor 45 days in
advance and is locked. It may not vary more than 10% or less than 10% from the forecast given.
The vendor is required to plan its manpower upto 110% of the given forecast at any point of time.
9. Meeting service levels mandated by TRAI (refer annexure for TRAI regulations)
Virat and his team went back to the drawing board and listed the headwinds faced by the Imperia Contact
Center Model:
1. The Ministry of Labour has revised the minimum wages for the employees for the communication
sector by 57% over the last one year
2. The Agent Attrition rate at the suppliers end is @ 70% per annum due to which suppliers find it
hard to ramp up their manpower to 100%
3. The average ramp-up time for a new vendor would be 9 months from the start of transition
4. Existing Service providers are asking for a price increase every 6 months.
5. The cost per connect min for Imperia customers have increased by 66% over the last 2 years and
it there is already a further increase of 25% requested by the existing service provider W Ltd.

A Catch 22 situation:
With the rains not relenting, Virat decided to pack his bags and leave for the day. Driving back, his mind
played back what had hit him earlier in the day. One the one hand, W ltd has asked for a price increase
of 25% on existing rates. The current contract with W Ltd has a mutual clause of exit (termination for
convenience) from both parties. W ltd has been using the exit clause as a weapon and threatening to exit
the business if the price increase request is not met. On the other hand, Virat realizes that it is not easy
to develop a new alternate partner. Virat has a meeting tomorrow with Laxman and needs to make a
decision on the next course of action.

Virat stops his car, steps out and sits beside the noisy sea, completely drenched. He shuts his eyes and
begins to evaluate whether the Imperia strategy was the right model for its high value customers. Is it
really serving the purpose it was introduced for? Has customer pain really dropped for the Imperia
customers? Should he retain the Imperia model? If yes, what should be the way forward?
Virat is seeking answers to the following questions:

What should be his sourcing strategy to tackle this issue? Is developing an alternate vendor to W
ltd. a better solution? If yes, which vendor would be the most appropriate?
What should be his negotiation strategy if he continues with the existing partner base or the other
alternatives that he selects?
What is the future of the Imperia contact centers at Edgetech? Is it the right model?

While Virat is thinking over these questions, he feels a sudden vibration in his body. It was his mobile
phone in the pocket which was ringing. Virat already knows the name of the caller without seeing it. Virat
answers the call and the first question is how did the meeting with W Ltd go?

What should Virat do?

Annexure 1:
1.1 Existing partner base of Imperia contact centers Parameters
Imperia center Business Share with
Edgetech
No. of Calls per day
Rate per connect min
Billable Average Handling Time of a call
Center Location
One Agent working days
Total no. of Agents deployed

H Ltd
54%

W Ltd
46%

35100
Rs 15.15 per connect min
370 secs
Noida & Bangalore
5 days in a week
1700

29900
Rs 14.31 per connect min
370 secs
Noida & Airoli
5 days in a week
1300

1.2 Performance summary of Imperia contact centers:

KPIs
Service levels %
Abandoned calls %
Repeat calls %

H Ltd
97%
3%
23%

W Ltd
95%
5%
21%

Top reasons for Customer repeat calls for Imperia Centers:

Service Activation / Deactivation queries

Billing Information
Call Drop complaints
Mobile Internet
Roaming Issue
Pack information / Plan information
Edgetech Data card
Connectivity issues

1.3 Company Profile

W Ltd: is a global IT, consulting and outsourcing company with a large workforce of close to 200,000
employees and operating across 6 continents. W posted revenues of US$ 8 billion in the last FY. In the
BPO sector, W Ltd. caters to all the existing players in the telecommunication market. It positions itself as
a premium service provider and hence has the expertise in handling high value customers for its clients.
W Ltd runs the Imperia and Regalia contact center for Edgetech and has a business share of 20% of the
total contact center business of Edgetech.

H Ltd: H ltd prides itself on helping its clients become more competitive through managing customer
experience effectively. H offers an entire suite of business process management services from marketing
to digital enablement services, consumer interaction services to platform enabling back office business
services. H ltd serves clients in a global landscape with close to 35,000 employees in 60 locations globally
with a promise to deliver localized solutions. In the last FY, H Ltd had revenues US$ 500 million and has
had four decades of experience working with some of the worlds most recognized brands. H Ltd caters
to almost 50% of the Contact centers in the Telecommunication market in India. H Ltd runs the Prepaid
as well as the Postpaid Superia and Imperia contact centers for Edgetech having a total business share of
35% of the total contact center business of Edgetech.

Potential Vendor profiles:

I ltd: I Ltd is a leading BPO firm that has a stronghold in 15 African and employs 10000 people. While the
company is headquartered out of Nairobi, it has a local presence in India as well. Last FY, I Ltd. saw
revenues of $ 4 million. I Ltd is one of the largest vendor of Edgetech in Africa and has 50% business share
of the Edgetech Africa contact center. However I ltd has been unable to enter into the Indian market with
Edgetech and has been pursuing Virat for a very long time to solicit business in India. I Ltd in India has a
strong presence in the BFSI sector but not in telecommunication. At present it does not cater to any
telecommunication service provider in India and hence is very keen to be associated with Edgetech in
India in order to expand its business portfolio. While there has been no challenge operationally with I Ltd
in Africa, however due to the high labour cost in Africa, I Ltd has been requesting for a price increase for
its Africa Operations.

B Ltd
B Ltd was founded in May 2008 primarily to assimilate rural India into the knowledge economy and create
job opportunities for the rural youth in India. B Ltd has set up 20 delivery centers in 8 Indian States and is
currently market leader in the nascent rural BPO category. The company intends to set up one such
delivery center in each of the 500 rural districts in India, employing 150 200 rural youth as process
associates from a cluster of 10 12 surrounding villages. Employed persons will have a minimum 12th
standard education and are in the age group of 18 24 years, have successfully completed a foundation
training comprising English, typing and soft skills. They are primarily from humble rural backgrounds and
are enthusiastic and willing to learn. Currently B ltd has 8 prepaid contact centers dedicated for the
prepaid customers of Edgetech. B Ltd has 7% business share of Edgetechs prepaid contact centers.

A Ltd: a startup BPO company which was registered 10 months ago. The company is owned by Amit
Chaudhary, an ex - employee of Edgetech. Chaudhary had left the organization on the entrepreneurial
policy which allows existing employees to start their own business and serve as partners for Edgetech.
Under this policy, ex employee gets a chance to partner with Edgetech and performance is monitored
for a one year period. If performance is at desired levels, Edgetech gives it a fair chance to bid as partner

for other processes of the company. Chaudhary has been approaching Virat for the past 3 months to
solicit business. The company currently operates only one of the prepaid contact centers for Edgetech
with 60 contact center agents from its office in Noida and has recently started ramping up its operations.
50% of its capacity is still available to operate more business.

1.4 TRAI Regulations for Customer Service Quality Parameters:

Parameter

Benchmark

Metering and billing credibility Not more than 0.1% of bills issued should
postpaid
be disputed over a billing cycle
Metering and billing credibility - Not more than 1 complaint per 1000
prepaid
customers i.e 0.1% complaints for
metering, charging, credit and validity
Resolution of billing / charging 100% within 4 weeks
complaints
Period of applying credit / waiver / Within 1 week of resolution of complaint
adjustment to customers account
from the date of resolution of
complaints
Response time to the customer for 90%
assistance:
(a)Percentage of calls answered by
the operators (voice to voice) within
60 seconds
Termination / closure of service
7 days
Time taken for refund of deposits 100% within 60 days
after closure
Call Drop rate
2%

Average over
One billing cycle
One Quarter

One Quarter
One Quarter

One Quarter

One Quarter
One Quarter
One Month

1.5 Postpaid contact center summary:

Contact Center
Category
Superia

Imperia

Regalia

Customer Segmentation
Customers with Monthly
billing of Rs 1000 and less

Qualification of the Contact

Center Agent
Mix of 50% Graduate and
Undergraduates

100% of the agents should

Customers with Monthly
be graduates with 15 years
billing between Rs 1001 and
of formal English medium
Rs3000
education
100% of the agents should
Customers with Monthly
be graduates with 15 years
billing of more than Rs 3001 of formal English medium
education

Preferred work experience of No. of Contact

the Agent
Centers

No. of
Service
Providers

Average Average cost

Handling per connect
time
minute

Mix of 50% freshers and 50%

having 6 months of experience

13

285 secs

Rs 6.45

More than 6 months of

relevant work experience

376 secs

Rs 14.73

More than 1 year of relevant

work experience

440 secs

Rs 18.45

1.6 State wise Minimum Wages summary:

City - States
Andaman & Nicobar
Andhra Pradesh
Arunachal Pradesh
Assam
Bihar
Chandigarh
Chhattisgarh
Dadra Nagar & Haveli
Daman & Diu
Delhi
Goa
Gujarat
Haryana
Himachal Pradesh
Jammu & Kashmir
Jharkhand
Karnataka
Kerala
Lakshadweep
Madhya Pradesh
Maharashtra
Manipur
Meghalaya
Mizoram
Nagaland
Orissa
Puducherry
Punjab
Rajasthan
Sikkim
Tamil Nadu
Tripur
Uttrakhand
Uttra Pradesh
West Bengal
Telangana

Total Wages Monthly

Zone 1
Zone 2
Zone 3
8,216.00 8,580.00
7,828.40 7,699.40
2,210.00 2,470.00
7,280.00
5,590.00
8,372.00 8,476.00
6,041.88
7,696.00
7,181.20
10,582.00
7,826.00 7,774.00 7,748.00
7,898.80 7,690.80
7,979.92 8,379.02
5,084.30
4,550.00
4,827.42
7,895.20 7,609.20 7,323.20
4,751.50
5,850.00
7,707.00
8,353.80 8,053.80 7,753.80
3,379.22
4,706.00
4,729.00
2,340.00
5,720.00
2,886.00
7,725.38
5,486.00
6,292.00
5,777.98
4,839.00
4,009.98
7,818.40
4,522.00
8,795.02

1.7 Definitions:
i. Calls Offered: Total calls offered to the service queue in any given period
ii. Calls Answered: Total calls answered / handled / picked-up for the service queue in any given period
iii. Service Level or SL: percentage of calls answered within 30 seconds
Service Level = (Total Calls answered within 30 seconds) / (Total Calls offered Total Calls Abandoned
within 30 seconds)
iv. Abandon Rate: percentage of calls that do not get answered after calls are offered to the service queue.
Abandon Rate = (Total Calls offered Total Calls answered) / (Total Calls offered);
v. Average Handling Time (AHT): Average of Talk + Hold + Wrap up (After Call Work) time of each call
vi. Average Speed of Answering (ASA): average call wait time in queue before call is answered.
vii. Connect Minutes: Total calls answered * Billable AHT in seconds/60.
viii. Customer Repeat Repeat call by same customer/account/del no (digital exchange line no.)/CLI (for
any reason) within 3 days; Edgetech may choose to measure repeat based on either del no./CLI/account
level at its own discretion and such a change whenever it occurs will be communicated to the partner
proactively.
ix. Revenue Generation: Generating revenue by upselling most apt product/ service to Edgetech
customers;
x. Normalization of KPIs: On days wherein volumes are greater than 110% for reasons not in direct control
of the Service Provider, performance delivered on quantitative KPIs (Service Level and Abandon Rate) for
such days may be excluded while deriving normalized monthly performance. For example: If volume
increase is due to customer calls led by high abandon % from insufficient manpower, such days are not
normalized.
xi. Unique Documentation percentage: unique interaction per call and is calculated as total unique
interactions/ total unique calls;
xii. Short Calls: any call where the total duration of the call (AHT) is 10 seconds or less.
xiii. Attrition: Reduction in headcount due to voluntary and in-voluntary resignations.
Formula for Monthly Attrition Percentage = Total Separations (Voluntary & Involuntary) in a calendar
month/ (Opening Headcount + Total Headcount additions) * 100. This will not include non-productive
headcount undergoing new hire training.
xiv. Annualized Attrition: Attrition for a given period annualized for a period of 12 months.
xv. Contact center Agent: CCA is an employee of the Service Provider, who is deployed full time on the
production floor for servicing Edgetech customers/processes.

ANNEXURE 2: Call Center Measures for Performance and Efficiency

KPIs
Service Level (Inbound calls)
Forecast Answered %

Target
90 / 30
>= 97%

Abandoned calls
Customer repeat

<= 3%
< 10%

Definition
>= 90% of customer calls to be answered within 30 secs
Answering %. If forecast accuracy %age is greater than 100%
then Answered / Forecast, or else Answered / offered
Abandoned calls less than equal to 3% of the calls offered
Same customer(account) calling within 3 days for any reason