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Bangalore , Oct. 10

BPO vendors overrate and exaggerate their process and domain expertise, and potential customers are now wising up to the fact, warned Mr John McCarthy, Group Director, Forrester Research Inc. He was speaking at a Nasscom event here recently.

At the risk of not being taken seriously, Indian companies project and enhance their capabilities to potential customers, he said, adding that a SAP implementation does not give a vendor accounting process expertise.

Nearly 40 per cent of the Fortune 1,000 companies surveyed by Forrester were alive to this phenomenon, Mr McCarthy said, adding that security and cultural concerns were among the other issues raised by those surveyed.

The Indian ITES industry should be wary of companies overrating their abilities, he said, adding that cost was still the dominant region for business process outsourcing.

Lower costs tipped the balance for over 63 per cent of respondents, said Mr McCarthy. About 43 per cent of the Fortune 1,000 said they wanted to outsource business processes to leverage the vendor's process and technology expertise.

In the BPO and ITES sector, over a third of the top companies Forrester surveyed were not interested in BPO, while a third of them were investigating the opportunity and another third was already practicing it, said Mr McCarthy. HR is the dominant area of activity - preferred by 74 per cent of the companies while customer service, procurement, accountancy is preferred by a third of the companies.

BPO is still in the early stages of development in the country, and vendors should acquire a deep process understanding, consulting expertise, broad technical skills and operational excellence.

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`BPO vendors overrate expertise'

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