BPO Coming out of IT Outsourcing's Shadow

Ann All

In India, BPO has long been eclipsed by its more successful cousin, IT outsourcing. But that could change in the coming months.

As I blogged several weeks ago, the Everest Group and India's National Association of Software and Services Companies (Nasscom) are predicting that the country's BPO industry could grow nearly five times over between now and 20012, possibly reaching revenues of $50 billion.

BPO is growing at a compound annual growth rate (CAGR) of 37 percent, compared to a 28 percent CAGR for IT outsourcing, reports the Business Standard. It accounts for 27 percent of India's export market for software and services, vs. 57 percent for IT services and 15 percent for software development/licensing.

Like their IT outsourcing counterparts, India's BPO specialists are expanding into other countries, to better meet the varying needs of clients and also to reduce business risks, such as those posed by the damaged underseas cables that resulted in outages for some of India's call centers.

Though BPO providers are more likely to suffer a negative business impact resulting from theU.S. subprime mortgage crisis -- several of them reported lower earnings in 2007's fourth quarter due to the crisis -- Nasscom still is bullish on the overall outlook for BPO, due to what it says is growing interest in outsourcing services such as procurement, human resources management and finance and accounting (F&A).

The VP of Infosys BPO tells The Economic Times that its clients are increasingly interested in deals that encompass several areas of BPO and/or that combine operations and technology, as well as in more sophisticated capabilities such as research and analysis.

All of these trends are mentioned in a CFO.com article that is similarly optimistic about the outlook for BPO. According to two A.T. Kearney analysts cited in the article, the emerging BPO trends to watch are:

  • the desire for more advanced capabilities, with some companies even willing to outsource much of the legwork involved in investigations of accounting errors;
  • the expansion into new geographies such as Latin America;
  • increased use of collaborative tools such as Lotus Notes, virtual chats and virtual whiteboards;
  • the bundling of different processes and services;
  • and the realization that clients cannot offload a function or process entirely, but rather must maintain some oversight.


Add Comment      Leave a comment on this blog post
Jul 21, 2010 3:32 AM bpo bpo  says:

In India BPO sectors are established in large number and this shows the response of this sector in India.

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Oct 30, 2010 7:57 AM call centre india call centre india  says:

BPO is growing at a compound annual growth rate (CAGR) of 37 percent, compared to a 28 percent CAGR for IT outsourcing, reports the Business Standard. Thanks for the information like that really i dont know this things till yet.

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