BPO Services India: Why a lucrative sector

Business process outsourcing (BPO) has been a sector wherein India has been in news for last one decade or more and reason for that seems to be the fact that the country has been been able to exploit the huge market available in outsourcing. BPO in broad terms refers  to outsourcing in all fields be it customer care in telecommunication or software development for third party client. Moreover, a company offering BPO services differs itself with others by putting in new technology or applying existing technology in a new and better way to improve a process and offer benefits to client firm.

Recently, BPO services were heavily hampered by the recession. Post-recession too there is no stop for problems coming on the way of smooth progress of outsourcing from companies in the USA. State legislature in Ohio state of the USA has banned any outsourcing to Indian company. Similar measures are expected from various other states of the USA. The path for India becoming global leader in providing outsourcing services to the USA and other countries seems difficult. Moreover, there are various other issues including of escalated cost and inflation which hamper the growth rate of BPO services in India.

One of the fastest growing segments of the Information Technology Enabled Services (ITES) industry, BPO services in India is a kind of delegation of one or more IT-intensive business processes by the companies located outside India. In BPO services, a company in India owns, administers and manages the selected process. The BPO service is based on defined and measurable performance criteria which are guided and decided by the client firm and closely observed by the BPO services providing company in India.

India landed as a champion of BPO services for the obvious reason that the country has edge over other nations in terms of Cost Advantage and Economy of Scale. Apart from Business Risk Mitigation, India offers Superior Competency, and Utilization Improvement to client companies in the USA and UK. Moreover, Some BPO services in India companies such as WNS Group, Wipro Spectramind, Daks e-Services, Convergys, HCL Technologies, Zenta, ICICI Onesource, Mphasis, EXL, etc. have become undoubted leaders.

Besides Tracmail, GTL Ltd., and vCustomer, some other BPOs including of HTMT, 24/7 Customer and Sutherland Technologies, etc. are being considered champion in BPO services in India. A welcome step in BPO sector in India has been that apart from pure-play vendors (companies offer only BPO services) some IT companies such as TCS, Wipro, Infosys, HCL, etc. have started offering BPO services. Interestingly enough whereas there was a huge gap between the revenues received through BPO services between pure-play vendors and IT services vendors, the gap has started diminishing.

There has been various mergers and acquisitions in BPO sector. One notable acquisition took place when TCS bought the captive unit of Citi. According to the Nasscom the Indian ITES industry has grossed over $5.7 billion in 2005, and now it is touching the figure of $20 billion. Moreover, Indian can capture 25% of global BPO offshore market and 12% of the market for other BPO services including of animation, content development, design services, etc.


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