Indian BPOs still rule the roost globally with cost, manpower edge

The year 2012 has been a landmark year for the Indian information technology and business process outsourcing (BPO) industry.

The IT and BPO companies not only weathered business uncertainties but also helped clients globally tide over the current crisis through the effective use of technology.

It was especially heartening to note the BPO industry’s growth and increasing maturity. In just over a decade, the industry has grown to nearly $11 billion in export revenues. It employs over 7 lakh people and accounts for 35 per cent of the global BPO market. In fact, for companies such as Tata Consultancy Services and Infosys, the growth from the BPO sector has been spectacular every quarter.

Competitive edge

The year 2013 should see major players consolidate further the numero uno destination that the Indian BPO industry enjoys globally. While there is increasing threat from China, India continues to enjoy its competitive edge in cost and manpower.

The focus in 2013 will be on areas such as big data, analytics and social media – the same set of priorities that the IT industry will have. Further, a huge opportunity is expected to come from the US, which is undertaking major reforms in healthcare. During 2012, BPO companies looked at a larger canvas by taking up global opportunities for revenue growth, optimising supply chain, client partner approach and investing in analytics, said Keshav R. Murugesh, Group CEO, WNS (Holdings) Ltd, which employs over 25,000 people.

New concept

Another key factor pushing growth of the BPO industry was ‘transformational outsourcing’ – a concept of cutting costs and improving organisational focus.

This will open a new array of opportunities for both providers and clients, with a range of new service offerings, innovative and cost-effective business models that will help clients’ attain optimum results beyond their expectations, he said.

New emerging sectors such as shipping and logistics, healthcare and retail will bring more business to BPOs due to their capability in analytics and research. Apart from these, BPO players still have an edge above others due to basic factors such as cost arbitrage and scale of resources.

2013 will be another groundbreaking year for the BPO industry. The sector will grow at a steady pace. Today, outsourcing companies have created a niche for themselves, moving much ahead of simple voice-based back-office work to high-end knowledge and skill-based work.

The industry today recruits chartered accountants; engineers, doctors and PhD holders, who drive the future of this business, said Murugesh.

Deepak Patel, CEO, Aditya Birla Minacs, said the markets were unpredictable in 2012 and the industry witnessed most clients outsourcing more core (apart from non-core) processes.

Key drivers

Big data and analytics will be the drivers for the BPO industry to support its clients' increasing demand for customer insight (example via the voice of customer) and extract even higher return on investment for their marketing spends.

In fact, 2013 will be about emergence of multi channel/cross channel, social media-enabled contact centre offerings (voice, mail, chat and social media). Unavailability of industry-ready graduates within the country poses a major challenge for the industry. There is war for talent for which the education system has to be given a complete facelift, says Murugesh of WNS.

Reducing Government support can significantly impact the growth story of the Indian outsourcing industry. Branding and repositioning of the BPO industry in India are critical, he said.

> raja.simhan@thehindu.co.in

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