The Hindu Business Line : A wake-up call

Knowledge Process Outsourcing or KPO players in the domestic scene warn of talent shortfall and other hurdles. A training institute will help sharpen India's skills and chances, they suggest.

ALONGSIDE BPO, it's now KPO or knowledge process outsourcing.

KPO is different, putting it broadly, in that it involves executing not so much standardised processes as higher-end services that require advanced analytical and technical skills.

The global KPO segment is expected to grow at a compounded annual growth rate (CAGR) of above 45 per cent to touch $17 billion by 2010. And India stands to gain with its highly qualified talent pool and its professsionals' comfort level when it comes to using the English language. The industry expectation is that by 2010, the Indian KPO sector will attain a size of $12 billion, accounting for a market share of about 70 per cent.

The statistics sure sound good but is there another line to the story?

Sandeep Pachpande, Chairman and Managing Trustee, Audyogik Shikshan Mandal, would like to think so. The Mandal, a Pune-based organisation, conducted a survey on the international market entry strategies for the KPO industry and noted that India's share in the World ITES (IT-enabled services) market is only 1.5 per cent. Companies face several problems such as lack of trained manpower, employee attrition, lack of proper physical infrastructure and marketing access.

Sunil P. Mirani of Ugam Solutions, Amanjeet Saluja of Inductis and Anurag Srivastava of WNS, domestic players in the KPO segment, echo the sentiment. Talent is what is missing and the demand-supply gap is increasing. Raw talent in the country is plenty but to tap the employable talent is the biggest challenge.

Mirani says the current KPO manpower is about 30,000 people and within the next five years, when the 70 per cent market share is accounted for by India, the requirement would increase by almost five times. And the jobs that would be created would be three lakh, according to a Nasscom study.

The three domestic players are of the opinion that it is time to set up a training institute in the country to tap this booming scene. Theyare already on the move and are looking at setting up such an institute where research and other processes can be taught by experts from the West.The institute would shorten elaborate training effectively. It would educate candidates on industry recruitment, thereby reducing each company's investment in training.

Saluja says each of the players hasan inbuilt facility where a training process goes on but "the investment and the amount of time required to gear up these people is enormous."

Sandeep and the others stress that the academia needs to upgrade constantly. The required skills need to be imparted from school/college level. Also, universities and academic institutions need to forge new partnerships with industry and foreign universities to ensure that the courses deliver the skills needed by the industry.

The global KPO industry is still at a nascent stage but growing at a rapid pace. The niche areas that would occupy star positions include data search, integration and management services, financial services, research and analytics, technology research, computer-aided simulation and engineering design and professional services. And developed economies such as the US, the UK and countries in Western Europe are increasingly facing a shortage of specialised professionals in research and development in VLSI, engineering design, IT, financial risk management, etc.

Sandeep feels companies should adopt a more focussed process for the international market and should consider the entire range of entry modes available. They must not focus only on the most popular and common ones. At the same time, companies must not ignore the domestic and emerging markets. Using India's high quality and low cost advantages, they should move up the value chain and enter more value-added premium services. If the Indian market decides to sit complacently waiting for opportunities to visit its shores, China will steal a march over India.

savitharin@gmail.com

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