The Hindu Business Line : BPO growth may slow down, says Forrester

Barometer
Data leakage leading to account theft is a `universal phenomenon'
Growth will decrease to 28 per cent in the coming 12 months
Immediate modification of IT Act of 2000 called for

New Delhi , July 11

Concerns arising out of recent information security breach at HSBC's India centre coupled with high attrition rates and staffing costs could take a toll on the BPO industry, slowing down the growth to between 28 and 30 per cent in the next 12 months, warns a report by Forrester Research.

The report, however, points out that instance of data leakage leading to account theft is a `universal phenomenon' and that security is often much greater at IT and BPO facilities in India than at vendor or user facilities in the US and the UK.

"During the past 12 months, the Indian BPO growth rate fell from 48 per cent in 2004-05 to 35 per cent in 2005-06. In the next 12 months, clients will become even more rigorous in their employee screening and security validation — thereby slowing the sales pace. Forrester believes that growth will decrease further to 28 per cent to 30 per cent in the coming 12 months," Forrester Research said, in its latest report evaluating recent security breach at HSBC's India centre.

Big setback

It further stated that the incident is also a major blow to the very common belief that captive BPO and IT centres were a safer approach to offshore outsourcing and that such frauds are more likely to happen when working with a third-party outsourcer.

The report, titled `Offshore Security Breaches Continue: Captive Risks Underscored', called for immediate modification of Information Technology Act of 2000, saying that the legislation had loopholes and was falling short in its ability to deal with growing cybercrime.

More loopholes

According to Mr Sudin Apte, the Country Head and Senior Analyst, Forrester Research (India), "Compared with past events, the latest instance is much more sophisticated and involves a nexus of offshore data piracy with onshore physical theft. It once again brings up the subject of information security in offshore operations.

"Most common reasons people give for having a captive facility are data privacy and security concerns. That holds good only if the parent company extends adequate investments in security, more than what third party vendors invest.

"We believe that is not the case today. We find third party vendors' employee due-diligence and security practices typically better than the captives because vendors go to great lengths, simply, to win the confidence of clients and prospects," the report said.

More Stories on : Outsourcing | Marketing Research | Outlook

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Farmers asked to transplant paddy seedlings

Train blasts rock Mumbai

`It felt like large stones were pelting down on the train roof'

Cellphones of no help in crisis situations

BPO growth may slow down, says Forrester

RNRL may end up paying more for gas from RIL

Cabinet committee to decide on sugar exports by mills

Markets may show resilience

e-waste: Greenpeace demands action from Wipro

GSLV launch wasn't insured

Bombay Stock Exchange tightens norms for listing of shares

Markets take a breather; Sensex ends on a weak note

Thermax betting on order book

Auto stocks up on Q1 hopes