Indian BPM growing 8-9% yearly: Nasscom

Over the next five to seven years, global BPM spending is expected to grow six to seven per cent annually and reach $233 bn by 2020, the apex body said

The total addressable market for the Indian business process management (BPM) sector is expected to be $54 billion by 2025, growing at eight to nine per cent yearly, says Nasscom, the apex body of the information technology and BPM sector.

Over the next five to seven years, global BPM spending is expected to grow six to seven per cent annually and reach $233 bn by 2020, it said.

The sector in India has grown 1.7 times in five years. There are 2,500 companies, with employment to 1.1 million professionals, covering around 40 languages. India has 37.6 per cent in the BPM offshoring market, mainly due to low operating cost. America and Europe continue to be the main growth drivers but firms are also expanding to the Asia-Pacific.

Nasscom believes changing regulatory conditions in the health care and BFSI (banking, financial services and insurance) segments, significant adoption in horizontal services and increasing share of knowledge services (e.g. data analytics, legal) are going to be key drivers of the growth.  The domestic BPM market is expected to be dominated by customer interaction services (CIS) and the financial services sector in the near future. CIS currently accounts for 80 per cent of the total domestic BPM sector; BFSI and high-tech/telecom are the two key verticals. Education, health care and governments are emerging areas expected to drive additional growth.

“The sector has undergone a paradigm shift since its humble beginnings as a mere back-office operation to becoming a key contributor to the economy, helping companies re-engineer their processes, manage core functions and providing big data analytics for business decisions,” said Nasscom president R Chandrashekhar.

He said the past decade had several developments that strengthen the sector, with the rise of digital offerings such as cloud-based platforms and automation. However, there were also challenges, especially when the sector is heavily reliant on US markets. With protectionism looming large, it might cause a major hindrance in growth. “In comparison to traditional BPM services, scaling up of knowledge services operations will be a key challenge, primarily owing to the difficulty in finding highly trained professionals. Another challenge is the high rate of attrition in BPM, with young employees looking for better job opportunities,” said Nasscom.