The business process outsourcing (BPO) industry in India, which is as export-oriented as the information technology services industry, is unperturbed despite the macroeconomic challenges and problems that are haunting the US, its biggest market.

The overall mood at the Nasscom annual BPO strategy meet in Gurgaon was reflecting this. Industry chieftains, strategists and analysts were unanimous that a slowdown, if at all happens again, won’t affect the prospects of the $17-billion industry. This is given the fact that global clients have already undergone significant restructuring with no headroom for further cost reduction.

The impact, if at all, will be positive since the clients will be forced to outsource more to optimise the costs and the benefits of that will come to the global outsourcing services providers, say industry leaders.

“In 2008, when the economic slowdown happened, we and the customers went through a fair amount of adjustment. We effectively moved from one pricing model to the other. The customers gave us far more flexibility than they gave before and that led to a different kind of relationship. Given all these, we think that the business for us will continue to be good,” Nasscom President Som Mittal said on the sidelines of the two-day event that started on Wednesday.

Besides, he said the BPO industry was more insulated as compared to some other industries, as it was not directly linked to the global uncertainties. Seconding his view, Pramod Bhasin, the non-executive vice-chairman of Genpact said the sector would go at a steady pace in the long term.

According to rating agency Crisil, while the IT sector grew by seven per cent during the downturn, the BPO sector expanded by 20 per cent. “Those numbers speak of a very interesting dynamics and what lies ahead for the BPO industry,” said MD and CEO Roopa Kudva. Moreover, in case of IT projects, the companies have to make payments upfront and wait for the benefits to accrue. But a BPO project is productive from day one, according to Manish Choudhury, VP and MD of Pitney Bowes Software India.

The software body said it remains confident about its projection for 16-18 per cent growth of the Indian IT industry in 2011-12 despite economic uncertainty in the US and European markets.

Source:http://www.business-standard.com/india/news/bpo-industry-sees-growth-despite-macro-challenges/446961/

The Business process outsourcing (BPO) services industry in India, a relatively new entrant in the arena, seems to have globalised its workforce more than the information technology (IT) services sector.

The BPO revolution in India, which started with the same motto of leveraging offshore markets to a greater extent to enjoy the cost benefits, is now on a path of globalisation. The $17-billion industry, late into the outsourcing arena when compared with the IT services industry, is now spreading its wings and aggressively setting its footprint on global locations.

While earlier the Indian and India-centric BPO players were seen leveraging the strength of offshore locations outside the country, now they are expanding more on onshore locations where a major chunk of their clients are located.
India’s top BPO firms, including WNS (Holdings), Aegis, EXL Service, Hinduja Global Solutions (HGS) and TCS are considering opening new delivery centres or expanding existing ones in the US, the UK, Philippines and other global locations.

“The primary reason why BPO is more global in service delivery than IT is because we serve global clients and also their back-office operations spread throughout the world. IT services, just the technology bit, is typically centralised. Whereas our operations are decentralised,” said Rohit Kapoor, CEO of EXL Service.

For EXL, almost 95 per cent of is its services workforce is off shore and five per cent is onshore, but it’s increasing. EXL has a presence in six countries outside India — Philippines, Malaysia, Romania, Czech Republic and Bulgaria. The company is exploring the option of having an onshore capability in the US, South Africa and Latin America.

HGS prefers to follow the global business model. “We are very big in onshore. We are looking at starting new centres in Milan, Paris and Rome. We are also looking at geographies like China and Latin America,” said Partha Desarkar, CEO, HGS.

Of HGS’ total headcount of 22,000 employees, 14,000 are based in India and rest in Manilla, UK and the US. The company has presence in six countries outside of India.

Industry experts and executives of BPO firms feel that onshore is going to be the way ahead as there is a growing demand clients to be offered the service from near-shore or onshore centres.

Source:http://www.business-standard.com/india/news/bpo-industry-expands-to-nearshore-onshore-locations/446964/