1. Analysis & Outlook
Rajesh Prabhakar Analyst Bio @ http://analysiscasestudy.blogspot.com/
Indian BPO Industry has grown despite the global economic crisis, as evident from country's
exports of the BPO sector which are expected to reach USD 17.8 billion in 2012-13 from USD
12.4 billion in FY 2010. According to NASSCOM, the Indian BPO sector still holds the global
leadership position with 37% of the world's BPO market compared to 34% in 2009, despite the
fact the voice based offerings have moved to Philippines and BPO revenues of Philippines are
also on the rise. The global BPO sourcing market has grown from USD 36-38 billion in 2009 to
USD 48-50 billion in 2012. But the Indian BPO industry has lost its advantage and in the last
five years, India has lost 10% share of the world's BPO (business process outsourcing) market to
countries such as China, Philippines and Brazil. Not only these three countries, countries like
Malaysia, Egypt, Morocco, Mexico, Chile, Columbia, Poland and Ireland are emerging as
attractive destinations for voice contracts, which is also concern for Indian Industry but Indian
Vendors have also setup their offices in almost all of the above mentioned nations baring a few
like Morocco, Egypt and Columbia.
Indian BPO Industry has transformed from BPO to business process management (BPM) – from
the basic voice services to cost cutting to finally delivering value based services that have
significant impact on the client businesses and this has picked up since the year 2009. Indian
BPO vendors are looking at products, platforms, social media, Analytics and Consulting projects
for increasing their revenues and profitability and most of these are nonlinear revenues which
mean the revenues are not directly linked to increase in headcounts. Non Linear revenues,
outcome based pricing and projects that are of high in revenues and margins, are necessary for
Indian vendors to survive in the market and for this and are setting up of multi-delivery centers,
niche vertical offerings and end-to-end solutions using cloud, big data and analytics for their
clients. The Indian BPO industry is well prepared for the tough market conditions and volatile
economic conditions that are expected to continue in the current year. Indian BPOs are acquiring
the companies that are specialized and having niche skills particularly related to healthcare
outsourcing, analytics, cloud computing and big data.
Transformation from BPO to Business Process Management Industry, Indian BPO Industry
facing tough competition and growth concerns in 2013

2. Analysis & Outlook
Rajesh Prabhakar Analyst Bio @ http://analysiscasestudy.blogspot.com/
Leading players in Indian BPO industry like Genpact, TCS BPO, WNS, Infosys BPO, HCL
Tech, Wipro BPO and Cognizant BPO have all acquired companies in the past few years with
only aim of acquiring new skills, technologies and capabilities so that they can improve their
product and service offerings to their clients.Not only acquiring companies the Indian BPO
vendors have also realigned their management and organization structures focusing on key
vertical industry segments so that they can service their clients in a better manner and increase
their revenues and margins. Government of India is also encouraging the BPO sector by
extending several incentives to increase the IT-ITES/BPO export revenue. Under the software
technology parks (STP) scheme, IT-ITES/BPO units are eligible for various tax benefits such as
customs duty exemption on imported goods, reimbursement of central sales tax and excise duty
exemptions on procurement of indigenously manufactured goods. The Department of Commerce
has notified 235 IT-ITES specific special economic zones. Currently, the SEZ units are eligible
for tax benefits as per Section 10AA of the Income Tax Act for a period of 15 years in a phased
manner. NASSCOM 2020 vision report also highlights the industry has a vision to garner
revenues of $300 billion in seven years, up from $108 billion in 2012, and this growth will also
imply heavy job creation.