BUSINESS PROCESS OUTSOURCING INDUSTRY OF INDIA

Business Process Outsourcing (BPO) emerged in India in the 1990’s, with each passing year witnessing tremendous growth, thus catapulting India into one of the world’s top outsourcing destination. The industry has won applauds for putting India on the global map as a reservoir of high quality, low-cost technology skills. The major factors that led to the development of the BPO industry in India are better assurance of quality, advanced telecom facilities, favorable tax environment, enhanced risk management practices, a huge English-speaking workforce, and availability of cheap & highly skilled (tech-savvy) labor among others.

What is Business Process Outsourcing?

Business Process Outsourcing (BPO) refers to outsourcing of business processes of an organization in order to reap the benefits of efficiency & effectiveness in terms of costs and productivity. A company providing BPO service usually administers and manages a particular business process for another company. Such service providers either take the help of an advanced technology or apply an existing technology in ways that quantitatively improves a particular business process.

Size and Composition

The major players in the BPO industry of India are third party service providers and the captive units. The size of the global outsourcing industry is approximately US$ 186 billion and India’s share of this pie is as big as 36%. More than 500 companies in India offer outsourcing services in 35 languages to over 66 countries and more than 200 MNCs operate out of India in this industry.

According to the Ministry of Electronics & Information Technology, Government of India, the ‘BPO Export Sector’ directly employed approx. 9 lakhs people in the FY 2012-13 which has increased to almost 11 lakhs in the FY 2016-17 (estimated).

A detailed category wise depiction of the direct employment generated by the India’s IT and ITeS sector is as follows:

Employment in IT-ITeS Industry (in millions)
Year/ Segment	2012- 13	2013- 14	2014- 15	2015- 16	2016- 17(E)
IT Services & Exports	1.29	1.6	1.74	1.846	1.921
BPO Exports	0.88	0.989	1.03	1.086	1.152
Domestic Market	0.60	0.699	0.745	0.758	790
Total Employment	2.966	3.267	3.485	3.690	3.863

Services Offered

Indian BPO companies offer several different services including customer & technical support, telemarketing services, insurance processing, data entry and processing, forms processing, bookkeeping and accounting services and research services including Internet search, product research, market research, surveys, analysis, web research, and mailing list research.

Future Prospects

In recent times, most of the Indian BPOs have started setting up their onshore presence in the very markets they serve. Leveraging on their years of experience & expertise, most of the large players have been concentrating on improving the outsourced business processes by offering specialized services rather than only plain vanilla BPO process solutions, like Knowledge Process Outsourcing (KPO), Transformation, and Consulting opportunities.

The industry, of late, has been at the receiving end due to the rapidly shifting technology needs, Brexit, changes in immigration & visa norms, and the election of protectionist Donald Trump as the US President. Hiring too has come down owing to the increased application of automation and robotics in the sector. In fact, in the past five years, revenue and profit growth for the top five companies listed on the Bombay Stock Exchange (BSE) have halved. The industry is passing through a transition phase as corroborated by Jagdish Mitra, Chief Strategy and Marketing Officer, Tech Mahindra – to quote him – “The industry is in the midst of a necessary yet painful transition. We are trying to address a new decision-maker, learn to speak to customers in a new language and address their problems in new ways.”

However, as per Bendor-Samuel of Everest - there is no alternative to India and the Indian firms as a source of essential talent. Hence, if the industry indeed makes use of this transition period in rediscovering itself, then there is no doubt that the country shall retain its image as the outsourcing capital of the world in the foreseeable time.

Here you read about Business Process Outsourcing, get more information about other outsourcing like Legal Process Outsourcing click here.