4. Future of BPO's/KPO's in India.

The future of BPO in India

1. What are the challenges that are facing the BPO industry today and how is the industry gearing up to face these challenges?

The main bar to rapid uptake of BPO services remains inertia. The BPO market is still immature and in certain areas (ie payroll) is becoming commoditised. These seemingly contradictory elements makes BPO difficult to sell. Strong growth is inevitable when the first-movers (both suppliers and customers) can demonstrate real bottom-line advantage over competitors. We are not there yet.

READ MORE

BPO : Future Prospects

The future for the IT/BP industry holds bright. It is estimated that 56% of the BPO market could be India's by the year 2006 with the demand for BPO services increasing at an annual growth rate of 50 per cent during 2004-06. The pace at which the Indian BPO market is increasing is tremendous. The market of BPO in India is likely to be around $9-12 billion by the year 2006 and will employ around 0.4 million people. The BPO market is ready to fire up and India Inc is all geared for this big opportunity.

This is really great news for India Inc since we have to tackle the BPO backlash as well. Though there are chances of this party being spoiled by the US led backlash but then also India is sure to have a large share of the BPO market. This will go a long way in making India the BPO super power of the world. If the backlash stays on for sometime, then may be India could only have a 42% share of the market instead of 56%. Though it is a reality that companies outsourcing their business operations to Indian BPOs have been saving a lot of money and also saving jobs of their own countrymen.

SOURCE

Do BPO jobs hold a future? feb 16, 2004

The recent US federal law against outsourcing American support services to foreign shores has invited a series of protests from sources in the Indian government and the Indian corporate sector. Everyone wants to keep these BPO (business process outsourcing) jobs within India for a variety of reasons.

The most legitimate and valid concern comes from the Indian industry that provides almost 70 per cent of existing jobs through the BPO sector. According to the statistics provided by www.bpoindia.org, which derives its data from the likes of McKinsey and Co and The Gartner Group, as on March 31, 2003, the Indian BPO sector employed 171,000 professionals.

t has an investment of $1 billion, creating about 100,000 smart cubicles in 7.5 million square feet of space. It generated revenues of $2.3 billion in 2002-03.

India has the largest number of English-speaking college graduates in the world, thanks to its 250-year stint being the crown jewel of the British Empire.

Contrary to popular belief in the West, the English language is the official language of commerce in metropolitan and corporate India and it is taught as a first language since kindergarten in most schools.

A large number of young and skilled Indian citizens between the age brackets of 21-27 work in the BPO industry catering to provide support services to foreign firms mainly from the United Kingdom and the United States.

The three-year-old US recession and the highest rate of unemployment (8.3 million Americans jobless per US Department of Labor Statistics as of January 2004) since the Great Depression of 1929 has had the US government hard pressed to act and alleviate some percentage of this unemployment. Moreover, this law applies to American companies using government contracts and funds only, for now.

The American private sector is not affected and companies like IBM, Microsoft and Oracle need not necessarily follow suit if the people they hire in India are through their own financial resources. The fear of the law applying across the board and including these corporations is what propels the Indian BPO sector to react in the way it has.

The second reason is merely political. Both India and the United States are in an election year.

In India, the Bharatiya Janata Party-led government is banking on strong economy at home through foreign investment and industry to win the general elections. A dent in India's economic strength at this point could seriously hurt the ruling party's chances.

In the United States, President George W. Bush and the Republican Party have been under fire for the war in Iraq. The US economy is just officially out of recession and the Bush government has yet to show a significant employment surge. More jobless Americans would mean fewer votes for the Republicans. The President is trying his best in the few months left to the presidential elections in November 2004 to limit the damage.

So, the BPO sector looked like the weakest spot to start with because there exists an equally skilled percentage of people in the United States who can do the job as effectively if not more, and who are currently jobless.

In crying out against the backlash against the 70 per cent revenue producing BPO industry, the Indian government and industry have been continuously ignoring the remaining 30 per cent highly skilled bunch of technically qualified young Indians.

READ MORE

Shadow over BPOs' future april 20,2005

The gentlemen who run the business process outsourcing industry in India will be surprised if they are told that they ought to be suffering from existential angst.

Their main headache is delivering what they have contracted for. This is because the competition is also in the same boat, not knowing how to chew what they have bitten off.

The result is a massive raw materials shortage -- in this service industry, bottoms that can be put on seats. They are surviving by poaching on each other.

An annual attrition rate of 50 per cent plus is par for the course and a company that boasts of an attrition rate of 30 per cent struts about like a prima donna. So the situation is somewhat like what prevailed in the software industry during the period of the tech bubble -- more orders than what you know how to cope with.

READ MORE

1 CLICK ME <>

2 bpoindia.org