The rise of the Indian BPO vendors amidst its Western counterparts can only be compared to the tale of Davis and Goliath. But the Indian firms are slowly but steadily leaving a footprint on the global BPO scene. This article takes a look at some the key reasons for the surprising success.
Indian business process outsourcing industry is proving to be a tough nut to crack for its western competitors. According to a recent study, Indian outsourcing providers have accounted for 5% of market revenues among top 150 providers. Market analysts have predicted that this share in the market revenue is bound to increase, with the chance of getting doubled by 2010.
Even a few years back there were hardly any Indian BPO providers in the top 150 but by the end of last year the top 20 Indian vendors have accounted for $4 billion in revenue, representing a significant portion of the industry. It is expected that this trend will continue because of economic pressures facilitating the demand for low-cost BPO. The accelerated growth witnessed by the Indian firms, during periods of economic meltdown, has taken the industry pundits by surprise.
Although there is no Indian player in the top 20 global BPO firms, half of the top 20 Indian vendors operate on local US and European delivery centers. Indian BPO providers have had the most success servicing English-speaking requirements, from North America and the U.K. North America has been the most successful sales location for Indian providers, where the top-20 India-centric BPO providers generate about $2.2 billion in revenue. From a vertical-market perspective, Indian BPO providers also had more success in telecommunications, manufacturing, insurance and banking than in government and retail, which are not traditionally sectors that have been strong users of offshore outsourcing.
Indian business process outsourcing vendors are rapidly evolving to accommodate vertical exposure, currencies and legal issues corresponding to offshore business handling. Some of the basic strategies employed by these firms include investing in onshore and near-shore delivery, pioneering the techniques of Knowledge Process Outsourcing and analytics services. These are the areas where the Indian firms are making their presence felt globally.
In a broad perspective, the Indian BPO vendors have accounted growth rates ranging from 12% to 200% in the fiscal year of 2008-’09. Though there are some firms which started with considerably small revenue, this statistic has raised eyebrows.
Experts have analyzed the basis for this success resulting from the following factors,
• The growing acceptance of the Indian BPO vendors in being able to able to deliver credible services in the market.
• The continual acquisitions of European and North American service centers by the Indian firms.
• Many of these vendors are starting to grow revenue from continental Europe and via partnerships with indigenous BPO providers; this will also help Indian BPO providers understand local business cultures.
One can safely say that many new giants will emerge from India in the years to come. Contact centers will see heightened growth as they have the lowest entry barriers. This is due to the fact that very little technical or process expertise is required for contact centers to start off. These barriers are expected to be kept low as new entrants with a broader base of prospective clients will flock the market in the near future.
Ivana Lewis has written a wide range of articles on business process outsourcing . Moat of her write ups are about BPO, inbound customer service and inbound call center. We are on Twitter.