The Hindu Business Line : `Indian BPOs must focus on security, domain skills'

DATA security, lack of product/domain expertise and inability to deliver results consistently pose major threats to the growth of the Indian BPO (business process outsourcing) sector, said Mr Srikanth Karra, Human Resources Leader, GE Capital, India.

The sector should work on these issues immediately to grab a larger pie of the global BPO market, he said.

The Indian BPO size in 2003 was $3.6 billion and is likely to be $16 billion by 2007-end, he said at Connect2004, Tamil Nadu's information, communication and technology event organised by the Confederation of Indian Industry.

Quoting a survey by a research firm, Mr Karra said that 83 per cent of Indian business reported a security breach (42 per cent of these had three or more breaches), against 64 per cent globally.

The need of the hour is to have a strong risk assessment, network and desktop security, business continuity planning (like disaster recovery procedures and standard tests) and standards or information security management, he said.

Indian BPO firms are also facing the challenge of managing attrition (55- 60 per cent), wage inflation of 12 per cent a year and shrinking margins in low level commoditised services. Further, 85 per cent of BPO concentration is still in big five cities.

Can they play in domestic turf?

INDIA has built its name globally in offering business process outsourcing (BPO) services — over 80 per cent of global market share in offering cross border BPO is held by Indian firms. However, is there a domestic market for BPO?

There was mixed reaction among senior company executives from BPO and call centre industry on this issue on the last day of Connect2004.

India, as a market, offers huge opportunity for BPO services to various sectors, including financial institutions and telecom, said Mr S. Madhavan, President, Global Practices Organisation, Servion Global Solutions Limited. However, there is lack of a BPO business model in India. Internationally, the model is transaction-oriented, but it is difficult to adopt the same in the domestic market, he said.

According to Mr Sreeram Iyer, Chief Operating Officer and Director, Scope International Private Limited, . Indian firms need to adopt their international business expertise to the domestic market.

Mr R. Jagadish, Chief Executive Officer, Allsec Technologies Ltd., said there was a need to have a nationwide toll free number, as is available in the US.

Mr Bharat Chadda, Senior Vice-President and Country Manager, Sutherland Global Services Pvt. Ltd., said that India is a complicated market for offering BPO services. In India there is no cost, labour or salary advantage. To operate in India, BPO players need to offer service at reduced cost. This would affect the service qualityMulti-language is a major issue in India, he said.