August 1, 2005 3:56 PM PDT

Indian call centers struggle amid flood

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Floods in Mumbai are expected to continue this week as the death toll nears 1,000.

The city is the financial capital of India and the place where many companies based in Europe and the U.S. have moved software development teams, as well as call and support centers, in a bid to cut costs.

The floods have caused havoc in the city, with meteorologists recording more than 37 inches of rain on July 26. Bloomberg reported that Indian officials estimate the disaster will cost the city $1 billion in restructuring costs and loss of business.

Despite the closure of banks and exchanges on Friday, the city did its best to open for business Monday, but reports suggest that infrastructure and work forces are still struggling.

Ashish Sonal, of Hill and Associates, a Delhi-based offshore risk management company, said: "The city is unprepared. The local trains are cut off, and most of the roads are underwater. The emergency services were not able to respond, and the administration has failed to anticipate and respond.

"Many of the bigger businesses, especially outsourcing centers, have been affected. Many of the financial centers...have been affected, and their business continuity has come under pressure. Even though the damage is not that high, some people cannot turn up to work."

In addition to the general chaos that surrounds natural disasters, Sonal said some companies have failed to prepare for flood scenarios and this is testing their disaster recovery plans. "One of the main issues is the large number of buildings with basements--water has flooded these basements where the control systems are, so you can't have power and you can't even get in there," he said.

"Mobile networks were affected and large parts of landlines too. Internet backbone services went down for three days," Sonal said.

Even people in Delhi have reported being unable to withdraw cash from ATMs as a result of systems failures in Mumbai. CitiBank, ICICI, HSBC and the Reserve Bank of India are all reported to have experienced problems with ATM networks.

In a statement e-mailed to silicon.com, CitiBank said it had, indeed, suffered difficulties: "The impact of Mumbai rains was limited to a few ATMs that had to be shut down on account of power (failure), loss of connectivity or waterlogging in the buildings/complexes housing the ATMs. The majority of our ATMs in Mumbai are functional, and there has been absolutely no impact to ATMs in other parts of the country."

The company failed to respond to requests for comment on how its backend systems and call centers had dealt with the floods, as did HSBC, which the Indian press had said was having problems.

But Mark Kobayashi-Hillary, global research director for the Commonwealth Business Council Technologies, said most outsourcing centers are based far enough away from the disaster zone for them not to be affected.

He said: "I can imagine that anyone who has business (near the area) will have problems--even just shifting staff around will be a problem. But most of the financial buildings are quite a way out of Mumbai. They are in Navi Mumbai. They are quite removed."

More than 15 million people live in Mumbai.

Dan Ilett of Silicon.com reported from London.

4 comments

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another reason
Just one more reason why any company should think very hard before moving crucial operations to THIRD WORLD countries.
Posted by bit-looter (51 comments )
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Absolutely right!
Give this man a medal for discovering that natural disasters never hit the more developed countries! In fact, with such extremely intelligent people out there, it's a wonder why the companies are moving at all ...
Posted by (2 comments )
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another reason
Just one more reason why any company should think very hard before moving crucial operations to THIRD WORLD countries.
Posted by bit-looter (51 comments )
Reply Link Flag
Absolutely right!
Give this man a medal for discovering that natural disasters never hit the more developed countries! In fact, with such extremely intelligent people out there, it's a wonder why the companies are moving at all ...
Posted by (2 comments )
Link Flag
 

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