This post is a brief overview of the contact /call center industry in Pakistan. The contact center is an increasingly important part of today’s globalized economy. With outsourcing growing with full speed, more and more companies are relying on oustourced contact centers to provide service and more importantly, building customer relationship. Riding on this wave, Pakistan’s call center industry has been steadily growing. In recent news ZRG announced its deal with U-fone for the automated implementation of U-circle package.

According to Farrukh Aslam, president Call Centres Association of Pakistan (CCAoP), the call center industry crossed $20 million figure during 2005. However, the Pakistan industry is hampered by a lack of skilled manpower. “We can do much better,” said Nasir Lone, country manager, The Resource Group – a US-based private investment firm with a focus on the business of call centres and outsourcing. Pakistan Software Export Board (PSEB) has published a report: Setting up Call Centers in Pakistan. The objective of this report is to create awareness among existing and potential investors and venture capital companies to explore Pakistan’s IT sector for the growth of their business.

A BusinessWeek report from May 2005 titled “Better Late Than Never In Outsourcing” also points out some of the challenges and opportunities of outsourcing to Pakistan. According to this article:

Pakistan is trying to copy India’s success in luring IT work, but it’s slow going. “As a natural course, American companies would not look at Pakistan,” acknowledges Jehan Ara, president of the 250-member Pakistan Software Houses Assn. “So we have to get them to look at us, and once they do business with us and credibility is established, they come back for more.”

Some 120 centers have opened in Pakistan in the past two years. Today they employ 3,500 people, and that number is expected to grow by 60% a year. Arwen Tech, a Karachi company that runs a 600-seat center, saw its sales double last year, to $10 million, serving clients such as Pakistan International Airlines and the local franchisee for KFC Corp. Now the company is building a 1,500-seat facility and hopes to boost revenues tenfold, to $100 million, in the next five years as it attracts more international clients.

Pakistan may face a shortage of IT workers. About 75,000 people work in the sector today, and the government believes a further 7,000 will be needed each year to keep the industry growing at current rates. But the country’s tech schools produce just 5,500 graduates a year — and only about a fifth of those are competitive and well trained, the Software Export Board says.

To fill in the skill gaps, Indian companies are training Pakistani companies on business process outsourcing (BPO) and call center setup as reported here and here.

The industry faces many other challenges: there is the security issue and political environment is shaky. Then there was a raid on call centers which created tension. Read more about it here.

And last but not least let us not forget the Internet and communication outage of 2005. The cable outage caused widespread economic damage and disruption in Pakistan, with 3,000 staffers reportedly laid off among the roughly 30 call centers that did not have backup capacity. Nine call centers in Pakistan reportedly had backup satellite connections provided at no cost by the government. In 2007 the situation is much better with redundancy and fallback options – but still a long way to go before Pakistan becomes an established hub of contact centers.

The overall prospects for the contact center industry in Pakistan are pretty good. Solution providers like ZRG, TRG and Arwen Tech need to keep delivering and evolve to the next level of expertise to ensure continued success.