India – An Outsourcing Destination

BPO-One of the most popular terms we frequently come across nowadays. What
is a BPO; just a C@ll Center or something beyond that. Before we strain our Grey
cells so as to understand this term, let’s get back to another term Off-shoring.
Off-shoring is a process wherein companies relocate some of their goods/services
to another location preferably in other countries so as to achieve global
competitiveness and to be much more efficient.

Indian Service sector has been one of the major contributors in the growth of
Indian Economy & Indian GDP. For instance India's Service Sector has grown @
8.1% in the year 1993 - 2003 as compared to 6.1% in the year 1983 - 1993. It is
this India's service sector which has led to the emergence of BPO in India which
is now growing leaps and bounds.

Statistics reveal that in 2003 Indian KPO sector had revenues of 0.72 billion
which accounted for 56% of Global KPO and it is estimated to rise to 71% of
Global KPO by 2010.

Now the Question arises "Why India ?" Why does Global Players like Microsoft,
American Express, Citibank and so on.. chose India when there are other
developing economies like Malaysia, Singapore and countries with Huge market
like China.

Lets have a glimpse of some of the major factors that attracted Major Global
players to India:

• Highly skilled English speaking workforce: India boasts of around 3

million Graduates every year and around 7million English Speaking
people.
• Huge Cost Advantage: Indian BPO salaries are almost 40% of US salaries.
• Secure Data Management Systems: India has a very efficient and secure
data management systems so its Clients can be sure of the safeguard of
their confidential data.
• Excellent Telecom Infrastructure: Fast and clear communication could be
had by amazing Telecom infrastructure which India can proudly boast of.
• Maintenance of High Quality Standards: Despite huge attrition rates,
Indian BPO sector has been able to consistently maintain very high quality
standards due to which India has been able to deliver results within due
course of time and that too at huge profits.
• Government Support: Indian Government understands the significance of
BPO sector in India and thus has been really liberal in its policies to allow
major foreign companies to outsource their products and services within
India.
• Time Difference: Long time difference gives Indian BPO sector an added
advantage as it gives us enough feedback time which helps us in
performing much better.
As stated earlier, Indian BPO has been performing exceptionally well. Genpact
ranked as No.1 BPO started off in 1998 with a workforce of mere 4 employees in
Bangalore needs no introduction today in BPO sector which has been able to
force even major US players like Convergys to 2nd position since long. Another
excellent instance is WNS , the only INDIAN BPO to be listed in NASSCOM.
Now the question arises What Next?

Undoubtedly, Indian BPO is doing fairly well, however, one major limitation of
BPO's in India was that they were confined to IT or ITES(IT Enabled
Services) only. What about the other sectors which also had huge demand for
outsourcing like Investment, Market Research, Research Investment, Legal
Services and many more. Another major disadvantage which later came into
picture was that BPO sector which was growing at a very fast pace required only
Process knowledge by its employees rather than Domain knowledge. Till now this
factor proved to be an advantage as it didn’t require much training sessions and
within few months could have a seasoned BPO employee who could contribute to
the organization fairly well. However, What's easy to HIT is easy to MISS, so
when demand increased various other sectors also required indian Services, so
KPO(Knowledge Process Outsourcing) came into play. KPO unlike BPO required
more of Domain Knowledge rather than just Process knowledge. With the
innovations almost at the saturation level in BPO sector, Along with the huge
demand KPO also has a cutting edge over BPO in the fact that it could cater to
wide range of services which is not confined to IT- ITES sector rather it provided
enough scope for Domain knowledge and now understanding of the Entire
project became much more important which helped in overall growth of the
sector. KPO also holds large potential for Subject Matter Experts especially in the
fields of Investment Banking and Research Investment sectors.

With the scenario we are encountering now, Indian KPO is at boom and with it
will follow the birth of a new sector LPO(Legal Process Outsourcing).

So we can say that it’s just the beginning and there's a long way to go. It won’t be
wrong to say that Indian potential gave birth to some new sectors like LPO which
were not even in the making, this indicates the level of potential India has and
also paves a path for a new beginning.

No doubt this sector is facing some challenges like High Attrition Rates, Public
unawareness for this sector which leads to wrong perceptions and so on.
However, the results that India has seen within past few years from this sector
are enough to cope with these challenges so we can come out with new solutions
and can claim to be one of the best Outsourcing Destinations to which world
can look up to.