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Our Bureau

Mumbai , Aug. 30

INDIAN BPO companies need to increase their delivery skills in the areas of industry-specific BPO skills and processes, said Mr Craig Baty, Gartner Group Vice-President and Chief of Research, at the Gartner India Summit in Mumbai today.

This would help the industry to increase its market share, he said.

"Although Indian companies have proven themselves to be world leaders in the area of generic BPO based on customer retention and support via call centres, they need to seriously increase their delivery skills in the areas of industry-specific BPO skills and processes,'' he said.

"Those organisations that are currently considering BPO are looking for more than just initial cost cutting. They are looking to outsource in areas where improved processes and skills can assist in the creation of a competitive advantage, and realise rapid business results."

India, he said, should build competencies for emerging verticals, such as retail, transportation and healthcare.

According to Mr Baty, Gartner's survey of 2004 of outsourcing and BPO intentions by vertical, there will be robust growth in the traditional areas of manufacturing and financial services industries but a slowdown cannot be ruled out as it nears saturation towards 2008. "Although many other verticals remain relatively untapped in terms of outsourcing, this does not necessarily mean that the `offshore' model for outsourcing delivery will be the preferred means,'' he said.

Many of the emerging vertical industries such as government, retail and utilities may in fact prefer to outsource locally. "So Indian companies wishing to keep on the growth curve via penetration of these markets need to establish local delivery capabilities in each market, especially when targeting Governments," he said.

The worldwide market for outsourcing (including BPO) will grow at a CAGR over 5 years of 7.8 per cent from $305.85 billion in 2004 to $445.9 billion in 2009. The BPO component of this will grow at a CAGR of 9.2 per cent from $114.8 billion in 2004 to $179.35 billion in 2009.

This means that of the total worldwide outsourcing market, about 61 per cent of global spending is for IT services, and the remaining 39 per cent is for the relatively newer concept of BPO, Gartner said.

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`Indian cos need to hone delivery skills in specific BPO verticals'

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