BPO in India Healthy, but Under Pressure

BPO in India Healthy, but Under Pressure

Comment: Indian BPO operations still present high technology suppliers with good opportunities, but several recent reports suggest that UK exporters may need to switch their gaze to other areas of Asia as new markets and new technologies emerge.

A raft of recent surveys have pointed to the continued strength of the Indian Business Process Outsourcing (BPO) market as well as emerging threats to their Asian dominance.

Shared services centre deals have outnumbered traditional outsourcing deals across the globe according to the latest KPMG global survey. The survey found 52% of respondents viewed shared service to be the strongest area of growth while 37% anticipated a growth in demand for information outsourcing and 27% voted for traditional business process outsourcing.

The usage of Cloud services are also increasing as per the survey report. This is also a reason for the relatively low growth of the traditional BPO space. 50% of the respondents use one or more cloud services, and the survey report anticipate that this percentage will reach up to more than 90% in next 12 months.

A second report finds India and the Philippines to have become the two major outsourcing destinations of the world closely followed by Malaysia and China. India, whose BPO sector revenues in 2011-12 are estimated to have fallen to less than $16 billion, still retains 51% of the Global BPO industry.

The report by Tholons estimates the Indian BPO sector is said to employ nearly 1.98 million people directly and 7.5 million people indirectly.  Tholons found that India has lost out to the Philippines as a lot of call centre work has left, in part down to a fall in general English proficiency.

However, UK based Serco have bucked the trend by investing in Indian BPO company Intelenet Global Services, the largest Indian BPO acquisition.  Ten months after acquiring the Indian business, the group is close to winning two contracts from the UK in both public and private sectors from unnamed clients worth $1.3 billion in the segment.

Tom Riall, CEO Designate of Serco Global Services, an entity carved out of the services and consulting group said, “I don’t think Intelenet would have been able to bag these contracts on its own and nor would Serco.”

Serco Global is looking at revenues of $1 billion in 2012.


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