A boost to BPOs

| Updated on November 11, 2020

Relaxed rules for ITeS companies can help create jobs in small-town India

The decision by the Centre to relax the rules governing call centres and business process outsourcing units could be a game changer for India’s IT-enabled services sector. The pandemic has increased the pace of technology adoption across the globe as clients and their customers move to a digital environment. Digital transformation and migration to the cloud have become the need of the hour as it makes accessing and maintaining data from remote places easier and quicker. The ongoing economic lockdown due to Covid-19 has disrupted the way IT companies function as more than 85 per cent of the workforce stays at home. From a centralised architecture, IT services companies have had to restructure their entire organisation; that is here to stay.

Under this delivery model, costs related to real estate and managing offices will go down, but higher spending will go into collaboration and other productivity tools. In this context, the decision to allow call centre employees to work from anywhere allows for tapping into talent across geographies, and provides increased employment options. Over the past two decades Indian IT, ITeS and BPO companies have carved out a niche for themselves in the global IT market. Various factors which contribute to the boom of the outsourcing industry in India are high-end infrastructure, low labour cost, language advantage, financial structure and strict adherence to international standards of quality assurance. Global giants are successfully implementing the outsourcing policy and gaining a competitive edge by investing in Indian IT companies. According to Nasscom, the IT-BPM (Business Process Management) sector grew 7.7 per cent year-on-year (YoY) to $191 billion, including $147-billion in exports and hired 2,05,000 people during fiscal 2019-20.

The latest change in rules governing the outsourcing companies, technically categorised as Other Service Providers by the Centre, has done away with several onerous processes. These rules were introduced in 1999 when the telecom sector was highly regulated. The Centre wanted to keep a tab on the voice traffic flowing within various call centres to ensure that no one infringed on the jurisdiction of telecom service providers. Since then there have been significant changes in technology and evolution of different networking architectures for setting up call centre networks. Under the new rules, non-voice processes have been kept out of the definition of other service providers. Even for voice based call centres, there is no registration or reporting requirement. Other requirements such as deposit of bank guarantees, requirement for static IPs, frequent reporting obligations, publication of network diagram, penal provisions, among other rules, have been removed. This will help in creation of jobs in smaller cities. In the old business model, talent had to be relocated from their hometown. Now, a qualified person does not have to migrate from Jodhpur to Bengaluru to work in an MNC. Another benefit is the boost it will give to the gig economy.

Published on November 11, 2020

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