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Losing of bpo business by india

According to an ASSOCHAM-KPMG joint study, in 2014, India lost about 70% of all incremental voice and Call Centre business to competitors like Philippines and Eastern Europe.

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Losing of bpo business by india

  1. 1. 1 Most of the leadingbusinesscompaniesof the worldare adoptingBPOasa strategicbusinesssolution. These companiesusuallyoutsource theirjobstothe BPO,whicheventuallyreduce theiroperational cost. The BPO industryisverydiverse,with several sub-segments,eachdisplayingitsownunique characteristics. Indiahadbeenamajor BPO hub so far.But for lastfew years,countryislosingmanyBPO businesses,andmostof themwenttoPhilippines. According to an ASSOCHAM-KPMGjointstudy,in 2014, India lost about70% of all incrementalvoice and Call Centre businessto competitorslike Philippines and Eastern Europe. It isestimatedthatinthe ongoingdecade Indiamight lose about$30 billionintermsof foreign exchange earningstoPhilippineswhichhasbecome the topdestinationforIndianinvestors too. Reason for Shifting of Business to Philippines
  2. 2. 2  Empathy-Familiaritywiththe USculture The Philippinesadvantage,besidesskilledandEnglisheducatedworkforce andgoodtelecom infrastructure,isfamiliaritywithAmericanworkculture andSpanishlanguage.EmployeesinPhilippine call centersspeakEnglishfluentlywithaneutral accentwhichiswhatcustomerslookforandthat is somethingmissinginIndianaccentsandthatis a prime reasonwhyBPObusinessisthrivinginthat country.  TrainedEmployees Beyondempathy,there are otherareasinwhichthe Philippines have the edge.Itgetstrained manpower,thankstoa governmentprogramme,anditsemployeestravel ontheirown. Incomparison, the fresh-out-of-collegelookinthe Indiancall centresmaylookcool,butdoesnotmake a great business case,especiallywhenthe employerhastospendon trainingitspeople,arrangingtransportforeveryone workingnightsandproviding escortsforthe women.  Skills Andthenthere isthe matterof skill incertainareas.Some time agoa large healthcare companywanted EXL to handle processeslikemedical summarisationanddisease management.ItwantedUS-registered nurses.Indiadidnot have any.The Philippines,onthe otherhand,had100,000 nurseswhohad returnedfromthe US afterthe financial crisisandwere unemployed.EXLhired400 of themand put theminfront of computers.Culturalproximitytothe UStogetherwithavailabilityof talentedmanpower are keyreasonsasto why BPOcompaniespreferexpandingtheiroperationsinPhilippines..Sometimes regulatory&licensingissuesalsorestrictoutsourcingof servicestoIndia. As the voice in IndianBPO gets muted; the buzz aroundthe Philippinesgetslouder. Several Indianfirmshave setupsubstantial operationsinPhilippineswhichhasalarge pool of well- educated,English-speaking,talentedandemployablegraduates.Accordingtoindustryestimates,30per centof the graduatesinthe Philippinesare employable,comparedto10 percentin India.Andtheylast longer.The attritioninthe Philippinesisabouthalf thatinIndia. Becauseof thisreasons,in 2012, Firstsource –India based BPO- tookoverBarclaycard'scustomerservice centre in Teesside in North-EastEngland,and moved a majority of theworkto the Philippines. Other Competitors As the Philippineshave emergedasIndia'sbiggestrival invoice,several othersare vyingforthe same pie.Soif empathytiltsthe scalesinthe Philippines'favour,culture swingsitforEgypt,which,withcosts comparable toIndia's,hasbeengetting more andmore contracts from companiesbasedinWest Asia.DalianinChinahasbecome animportantoutsourcingcentre because alarge populationof the formerJapanese colonyisconversantinJapanese. Chinaenjoysagreat advantage intermsof large pool of people butthe Chinese haveagreatlimitation, as theydo nothave enoughEnglishspeakinggraduateslike India.Mexicotooisemergingasatough competitorforIndiabutis goodfor low-endjobsonly.OthercountrieslikeIrelandhave asmallertalent pool.Canadaand SouthAfricaare otherprominentcompetitorsof Indiabutare costlierthanIndia,
  3. 3. 3 while Russiahaspoorinfrastructure andpoorlinguisticcapabilities. Nowit becomesimportantforIndianBPO(businessprocessoutsourcing) industrytodiversifythe deliveryfootprintinordertotake advantage of low-costcentersorelse ourcompetitorswill further consolidate theirposition.Thusthere isaneedto reduce costsand make operationsleaneracrossthe BPO industry.BPOcompaniescouldreduce the total operatingcostsby20-30 per centby movingtoa low-costcitywithinIndia,withacostdifferentialof around10-15 percent fornon-voice processesand upwardsof 20 percentfor voice processes.Citieslike Ahmedabad,Chandigarh,Coimbatore,Dehradun, Jaipur,Kozhikode,Nagpur,NashikandPalakkadcanhelpmeet50-60 per centof the projectedtalent requirementof BPOindustryovernextfive years,the reportsaid. Apart fromthe fact that IndianBPOindustryisnotgrowingat that pace,still Indiaisa leadingcountry in worldwide offshore businessservices provider2014. Hence Indiastill hasthe leadingedge inthe BPO industry,butitshouldkeeponimprovisingtomaintainitsstability.ThereforeIndiashouldbe onits guard to maintainitspositionintact.If IndiahastomaintainitssupremacyinBPOand itssoftware workforce,thenBPOIndiahasto learnSpanish,whichisspokeninmore than24 countries.WithIndia alreadystampingitssuperiorityinthe BPOsectorwithits knowledge of the Englishlanguage,itnow needsjustone otherlanguage thatwill make the worlditsmarket,whichisSpanish
  4. 4. 4 Ref: http://www.statista.com/statistics/329766/leading-countries-in-offshore-business-services-worldwide/ http://assocham.org/newsdetail.php?id=4455 http://businesstoday.intoday.in/story/bpo-future-india/1/22946.html

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According to an ASSOCHAM-KPMG joint study, in 2014, India lost about 70% of all incremental voice and Call Centre business to competitors like Philippines and Eastern Europe.

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