1. International Indexed & Referred Research Journal, November, 2012, ISSN 0974- 2832, RNI- RAJBIL- 2009/29954; VoL IV * ISSUE- 46
Research Paper - Commerce
BPO: A Gateway of Globalization
* Suryakant Caugule November ,2012
* J.E.S. College, Jalna, Maharashtra
A B S T R A C T
India is emerging as a global hub in the business process outsourcing (BPO) market. The BPO industries provide the impetus
to our economy forward to higher level and create employment opportunities in the country. Business process outsourcing
and information technology (IT) services contribution to Indians GDP will increase to Eight percent by 2008. BPO in the
country are expected to employ around one million people by 2008.
Business Process Outsourcing has not only evolves in information technology industry but has also changed the
economic landscape of the country. Indian industry will have a big opportunity by way of outsourcing. It is emerging as
a powerful approach that business leaders can use to achieve a wide range of tactical and strategic aims. In order to maintain
quality outsourcing the industry needs to expand their services and develop its human resources. The next generation of
Business Process Outsourcing has emerged as a priority for businesses looking to better options in managing their
application portfolios. Business Process Outsourcing leverages process driven efficiencies in terms of organizational
excellence, responsiveness & branding, financial efficiency and customer relationship. Outsourcing has moved from niche
technology management tool to a mainstream strategic weapon. The outsourcing services provider company will have
to upgrade their technologies and improve the quality of the products. A leading BPO firm should plans to launch a training
academy to cater to the needs of the BPO industry. The training would range from simple processing to research and
development for the BPO industry. The industry will involve educational institutions, Universities, BPO and IT companies,
and Non-Governmental organization. India has the opportunity to create a 'Made in India' brand in the services industry
and can dominate the BPO industry for several years.
Introduction: emerged as a steady basis for growth in the Indian
India is emerging as a global hub in the Business industry. ITES involves various activities like call cen-
Process Outsourcing (BPO) market. The BPO indus- ters, Back office operations, content development and
tries provide the impetus to our economic growth. Its Medical transportation. All these services are highly
growth will provide the thrust needed to take the dependent upon IT to deliver good quality.
economy forward to higher level and crate employment India scores over other competing ITES
opportunities in the country. Business Process outsourcing countries due to its sound IT infrastruc-
Outsourcing and Information Technology (IT) services ture, which include a large talent pool or well-qualified
contribution to India's GDP will increase to Eight per- English speaking workforce. Another significant ad-
cent by 2008. BPO in the country are expected to em- vantage that India can be proud of its emphasis on
ploy around one million people by 2008. delivering quality products and services at a competi-
The good part about the outsourcing segment in tive cost. India is still ahead in the stiff competition for
India is that it's not only the cost effective, which becoming a preferred global offshore location due to
attracts the global MNC's but the high quality services the availability of a vast base of technology profes-
that are rendered by the Indian companies. India is sionals and researchers. For this, several companies in
likely to capture 56 percent share of offshore business US are looking forward for their outsourcing opera-
process outsourcing by 2006 with the demand for BPO tions to India. Low manpower costs, high quality of
services increasing at an annual growth rate of 50 per- service, talented workforce, good infrastructure, en-
cent during 2004-06, according to a report by ICRA. trepreneurial ability and advanced technology offer-
The study estimates that 3 to 3.5 million jobs will be ing opportunities to Indians in business process
outsource to India over the next 10 years. India is outsourcing.
emerging as an attractive outsourcing destination to BPO in India: Present Status-
major global companies around the world in IT enabled BPO in India is cheap but also driven by good
services. According to a recently conducted study, qualities. The billion-dollar industry has set its foot
around 50% of the current fortune 500 companies are firmly in India to attract more BPO business according
clients of Indian IT firms and over 200 of these global the contemporary standards. Several European and US
majors are currently outsource their support services firms have been flouring in India since last few years as
to India. Outsourcing of IT enable services (ITES) has Indian BPO has effectively managed to produce quality
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2. International Indexed & Referred Research Journal, November, 2012, ISSN 0974- 2832, RNI- RAJBIL- 2009/29954; VoL IV * ISSUE- 46
driven services to their clients abroad. BPO in India has structure and software developments. India exports
attracted a large number of entrepreneurs and inves- software to 95 different countries and stands second
tors who are yielding profits through low cost of the in the world in software exports. Research Groups in
Indian labour to their customers in the U.S. and Europe. outside and US predicts that's India's IT Business Pro-
The BPO services industry in India seen revenue growth cess Outsourcing will grow by 25 % till the year 2008.
by 46% from 2002-03 to $3.6 billion in 2003-04 (Nasscom The Research Groups estimates that various compa-
report). In 2002-03, the value of only ITES outsourcing nies in US and Europe look anxious to hand over some
to India was 65%higher than in 2001-02 and of their operations to outsourcing companies in scot-
ITES represented 24% of the total IT export from India. effective countries such as India. Indian BPO industry
Recent studies conducted by Nassscom-Mckinsey by has effectively managed to produce quality driven
2005, Noshir kaka, partner, Mckensey express his view services to their clients abroad.
in the report "our research suggests that the total ad- Government's Policy in Favours of BPO Industry:
dressable market for global off-shoring is approximately The Government of India has set an ambitious
$ 300 billion, of which $ 110 billion will be offshore by GDP growth rate of 8% a year and 10 million a year
2010. Indian has the potential to capture more than 50 employment growth as targets for the 10th plan period.
% of this opportunity and generate export revenues of The policy of government of India is in favour of BPO
roughly $ 60 billion by growing at 25 % year on year till sector. Outsourcing has become an integral part of
2010." The growth in the BPO industry in India has India's IT governance strategy. The government has
brought more challenges to business players in pro- demonstrated its interest in this sector by setting up a
cessing the activities within. single window facility for attracting foreign direct in-
The demand of the western corporate firms is vestments in this sector.
very high- in sense of quality, productivity and low The government has provided many incen-
cost indeed. The demands can be managed by devel- tives including a tax holing up to 2010 and competitive
oping management programs. Several research agen- duty structures. In addition to the Central Government
cies are monitoring the growth of BPO industry in incentives, respective State Governments have also
India. All of them are predicting that India will be realm declared attractive incentive packages to the investor
of outsourcing in coming years-naturally because of in the ITES sector. The government is also activity
low operational cost and standardized quality that the trying to reduce international communication cost. The
Indian professionals are able to produce. The demand government is also providing infrastructure support
for corporate sectors in the fields of sales, Human through various organizations, such as software Tech-
Resource, Finance, and Marketing etc. will provide nology Parks, Special Economic Zones etc. the govern-
concerted boost to the BPO sector in India. ment support will be a great help in archiving the targets.
Why Outsourcing to India? Opportunities to Indians:
The country consisting of a very high percentage BPO offers a great potential to Indian indus-
of fluent English speaking force. This manpower is try. The demand here for quality BPO services is ever
guided by good interaction with IT components. This growing. Major companies from around the globe are
makes the job easier for the companies looking to settle accessing Business Process Outsourcing in India. Even
here. Other specific areas concernened with BPO in- studies reveal that a business corporate house in west-
dustry include project Management, HR, Accounting, ern countries prefers outsourcing to India. According
Business development, and Technology, BPO in India to NASCOM outsourcing ITES-BPO work to India has
with its uninterrupted at present provides opening in helped companies achieve 40-50% cost savings, the
all these segments. The growth of BPO sector in India quality assurance and cost-effective manpower in
is evaluated mainly due to the strong basic principles India has resulted into 66% of the total off-shoring
of the companies worldwide. business coming to India. The exceptional qualities
Companies around the globe are realizing that like voice quality-for call centers, data
miniscule operation such as book-keeping, invento- manufacturing- due to healthy IT structure- have
ries and relative activities needs to be strong for the enabled India a force to be reckoned. The Indian BPO
smooth functioning of the firm. As such, outsourcing industry presently stands at $1.2 billion dollars and
became of utter importance. BPO in India id growing enormous growth is assured for the coming years.
not only due to its nominal rated workforce but also According to an estimate, BPO in India will grow
because of the quality of work the employees are able between $ 20-24 billion in the next five years. Acombined
to produce. India in the recent years has shown devel- research by IDC and Associated chambers of commerce
opments in the areas of Tele-communication, IT infra- and industry anticipates the annual growth of 32%
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3. International Indexed & Referred Research Journal, November, 2012, ISSN 0974- 2832, RNI- RAJBIL- 2009/29954; VoL IV * ISSUE- 46
within the BPO industry in India for the next five years. tactical and strategic aims. In order to maintain quality
With the current growth at the Indian BPO industry, the outsourcing the industry needs to expand their ser-
total employment is expected to touch 6 lakhs by the vices and develop its resources. The next generation
year 2007. Currently India has 1.5 lakhs jobs within BPO of Business Process Outsourcing has emerged as a
firms.BPO industry in India has bright future BPO in priority for businesses looking to better options in
India are undoubtedly emerging the facet of the back- managing their application portfolios. Business Process
office operations, globally. India with vast IT human Outsourcing leverages process driven efficiencies in
resources is also attracting outsourcing from American terms of organizational excellence, responsiveness and
companies. China alongside India was predicted to branding, financial efficiency and costumer
grow amongst the top outsourcing destination but relationship. Outsourcing had moved from a niche
problems associated with this lack of English language technology management tool to a mainstream strategic
skills, the legal and regulatory environment, and the weapon. The Outsourcing service provider company
lack of intellectual property laws-make china too risky will have to upgrade their technologies and improve
today. Thus, India took a dominant step to emerge as the quality of the products.
one of the giants delivering BPO services. A lending BPO firm should plans to launch a
Suggestions for better prospectus: training academy to cater to the needs of the BPO
Business Process Outsourcing has not only industry. The training would range from simple pro-
evolved in information technology industry but has cessing to research and development for the BPO in-
also changed the economic landscape of the country. dustry. The industry will involve educational institu-
Indian industry will have a big opportunity by way of tions, University, BPO and IT companies, and Non-
outsourcing. It is emerging as a powerful approach that Governmental Organization. India has the opportunity
business leaders can use to achieve a wide range of to create a 'Made in India' brand in the services industry
and can dominate the BPO industry several years.
R E F E R E N C E
1. Sandra Jones- Will The Economic Recession Hit The Indian Bpo Industry ?- http://www.articlesnatch.com
2. Teacher Troubles at Tech Park- Economic Times. Dt. 15/12/5005.
3. Managing Business Process Outsourcing-opportunities & Challenges-Publication of Indian Journal of Marketing, Volume:
xxxv.by Dr. Ch. Lbohal Meitei and C.D.Balaji.
4. Various Articles Published in Times of India, Dainik Lokmat, And Dainik Sakal.
5. Articles Published in Sampada-Monthly Journal of MCCIA Publication Pune.
6. www.Bizbrim.com
7. www.indian-bpo.com
8. www.bpoindia.com
9. www.outsource2india.com
SHODH, SAMIKSHA AUR MULYANKAN 15