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Indian BPO on rebrand path

Nasscom says living on cost arbitrage is over

BS Reporter  |  New Delhi 

The $16-billion business processing outsourcing (BPO) sector says it is ready to drop the outsourcing tag as it looks at rebranding itself, to ‘business process management’.

After having matured from shift and cost arbitrage work, the National Association of Software and Services Companies (Nasscom) believes it is time for BPO to move on to BPM branding. “Our main arbitrage was cost, but we have gone beyond that. This is one of the most critical factors that has helped the industry buck the global trend and maintain its leadership position,” said Som Mittal, president of Nasscom.

The Indian BPO sector’s share in the global sourcing market is 37 per cent; it has about two million employees. Around 500 companies in India provide BPO services; additionally, about 200 multinational corporations and in-house centres do BPO operations in India.

THE $16-BN BPO INDUSTRY IN A NUTSHELL
  • 1.98mn employed directly
  • 70% employed from Tier II and III
  • 55% of employees in this are women
  • 200+ MNCs and global in-house centres
  • 500+ number of companies in BPO segment
  • 6yrs The company has CAGR of 17% and employee grew 13%
  • 66 number of countries served by India
Top five BPO players
  • Genpact
  • Tata Consultancy Services
  • Aegis
  • Wipro
  • Firstsource Solutions

Nasscom has an ambitious plan to help entities shift from just an offshoring or an outsourcing player. It has set up a team to dedicatedly work on the rebranding. The initiatives the industry body has taken include secured hiring processes, generating a talent pool for both voice and non-voice segments by partnering with educational institutes, ensuring India’s competitiveness against players such as China, Philippines, South America and South Africa is retained and the rebranding mentioned here.

“We have been hearing that the Indian BPO sector has stagnated, that other geographies have overtaken us. I disagree; over the past six years, this sector has had a compounded annual growth rate of 17 per cent. We hire about 1.98 million people directly. Despite inflation, we continue to remain relevant to customers. We have achieved this through efficiencies, a little help from the rupee depreciation and the talent pool. The number of tier-II and tier-III cities that India has is unmatched. Not only do these cities have infrastructure but a population to support that,” said Vikram Talwar, co-founder and chairman, Exl Service, and chairman of the Nasscom BPO Forum.

The industry is engaging with government, customers and stakeholders (students and parents). “One reason why the Philippines is making news is because of the support it has received from the government. Their President has said BPO is among the top 10 career options and an investment priority,” said Keshav Murugesh, global CEO, WNS.

Companies in the sector agree the next growth driver will come from new services and regions. Almost 80 per cent of the growth will come from areas and industries in which the Indian BPO sector has had no presence. One such area is data analytics and ‘Big Data’. A Crisil study says, Big Data will be a $1-billion opportunity for the Indian BPO sector by 2015. Globally, big data will be a $25-bn opportunity by then; companies will have to invest in skill development.

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First Published: Thu, September 06 2012. 00:14 IST
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