The Indian BPO industry is facing tough challenges in 2013 as cost advantages decline and margins shrink. Growth has slowed to 12.47% over the last four years compared to 17.23% for the IT industry. BPO firms are struggling with reduced client spending, high attrition rates, and wage inflation pressures. Emerging low-cost destinations like the Philippines are also competing successfully for outsourcing business. Indian BPO companies must improve their service offerings and move up the value chain to consulting and analytics to boost margins in this difficult year.
India has built strong international credibility in the BPO market and this has paved the way for many international firms to explore other outsourcing opportunities. The KPO or Knowledge Process Outsourcing goes beyond outsourcing standard routine business processes to those involving high end value added tasks in which execution depends on skill, expertise, domain knowledge and experience of the experts handling the tasks.
This presentation briefly summarizes how India is poised to take on this next wave of outsourcing i.e the KPO business.
Points covered: The Indian IT/BPO Industry. The story so far..
BFSI – The dominant vertical
BFSI – Will it grow as a vertical ?
PE/VC interest high
The “Non Linear” Path..
Looking Ahead
Presented by Ramit Sethi, June 2013
India has built strong international credibility in the BPO market and this has paved the way for many international firms to explore other outsourcing opportunities. The KPO or Knowledge Process Outsourcing goes beyond outsourcing standard routine business processes to those involving high end value added tasks in which execution depends on skill, expertise, domain knowledge and experience of the experts handling the tasks.
This presentation briefly summarizes how India is poised to take on this next wave of outsourcing i.e the KPO business.
Points covered: The Indian IT/BPO Industry. The story so far..
BFSI – The dominant vertical
BFSI – Will it grow as a vertical ?
PE/VC interest high
The “Non Linear” Path..
Looking Ahead
Presented by Ramit Sethi, June 2013
this assignment is generally related to finance in which profile of the company is there, history of the company, companies 2014-2015 income statement and their footnotes.
“Knowledge process outsourcing may be the next Boom Business”
The firmament of outsourcing is studded with the variety of bright and shining stars such as BPO, KPO, HRO, FPO, LPO, EPO etc. after the appearance of BPO; it is KPO which is assuming the popularity like Venus the brightest star. From the time immemorial knowledge has been considered as in all fields, be it spiritual, religious, learning, welfare, law, justice, administration or economic.
The TeamLease Industry Salary Primer - 2013valuvox
The Salary Primer is an annual compilation of temp and perm market salaries across the most relevant geographies and industries, accompanied by trends and insights which add value to hiring and talent management decisions our stakeholders make.
Temp and Perm salaries have been seen to be converging for some years now. During our course of an annual analysis of salaries we found that the margin of difference between the two is not statistically significant anymore and has, therefore, practically diminished. This meant, reporting a ‘unified’ or a single salary across the temp and perm domains is now feasible.
As the differential between temp and perm salaries pales into insignificance – ‘not significant’, as statistics puts it – we decided it is time the convergence is reported for what it is: a unified industry salary.
Fundamental analysis of HCL Tech (2021) SimranMadan11
Fundamental analysis describes whether a company is sound for making a investment or not. it studies the past performance of a company and makes assumption for future growth or loss.
Financial Services BPO and ITO OppertunitiesMadu Ratnayake
Sri Lankan Financial Services Outsourcing sector is growing. The opportunities for finance professionals to move in to knowledge services industry (IT/BPO) is rapidly expanding. This presentation highlights the growth of the global IT/BPO industry and Sri Lanka’s focus on Financial Services Outsourcing sector.
Why india still has an edge in software development outsourcing in 2022, desp...ISHIR
India is known for its cost advantage and the largest pool of IT talent, If you consider outsourcing software development projects to India, you should not focus solely on India’s edge in software development.
this assignment is generally related to finance in which profile of the company is there, history of the company, companies 2014-2015 income statement and their footnotes.
“Knowledge process outsourcing may be the next Boom Business”
The firmament of outsourcing is studded with the variety of bright and shining stars such as BPO, KPO, HRO, FPO, LPO, EPO etc. after the appearance of BPO; it is KPO which is assuming the popularity like Venus the brightest star. From the time immemorial knowledge has been considered as in all fields, be it spiritual, religious, learning, welfare, law, justice, administration or economic.
The TeamLease Industry Salary Primer - 2013valuvox
The Salary Primer is an annual compilation of temp and perm market salaries across the most relevant geographies and industries, accompanied by trends and insights which add value to hiring and talent management decisions our stakeholders make.
Temp and Perm salaries have been seen to be converging for some years now. During our course of an annual analysis of salaries we found that the margin of difference between the two is not statistically significant anymore and has, therefore, practically diminished. This meant, reporting a ‘unified’ or a single salary across the temp and perm domains is now feasible.
As the differential between temp and perm salaries pales into insignificance – ‘not significant’, as statistics puts it – we decided it is time the convergence is reported for what it is: a unified industry salary.
Fundamental analysis of HCL Tech (2021) SimranMadan11
Fundamental analysis describes whether a company is sound for making a investment or not. it studies the past performance of a company and makes assumption for future growth or loss.
Financial Services BPO and ITO OppertunitiesMadu Ratnayake
Sri Lankan Financial Services Outsourcing sector is growing. The opportunities for finance professionals to move in to knowledge services industry (IT/BPO) is rapidly expanding. This presentation highlights the growth of the global IT/BPO industry and Sri Lanka’s focus on Financial Services Outsourcing sector.
Why india still has an edge in software development outsourcing in 2022, desp...ISHIR
India is known for its cost advantage and the largest pool of IT talent, If you consider outsourcing software development projects to India, you should not focus solely on India’s edge in software development.
NIIT UNIQUA – Center for Process Excellence has been set up to cater to the manpower needs of the Global BPO / KPO Industry. This is a joint initiative of Genpact and NIIT that combines the best practices of Genpact, the leader in BPO and NIIT, an Education and Training pioneer.
NIIT UNIQUA addresses the increasing demand for skilled workers in the business & technology services industry by providing training programs in relevant areas. It will initially offer training programs in areas such as business processes, language skills and business communication, and intends to add additional offerings in areas like Technical Support Services, Banking, Insurance and Supply Chain.
NIIT UNIQUA is designated for students aspiring to build sustainable careers in the high growth business and technology services industry.This institute will offer the industry's most comprehensive training curriculum for existing and potential employee of business services and technology companies.
BPO is an acronym for Business Process Outsourcing. This is a practice of contracting a particular work process or the processes to some external service provider. The services may include accounting, payroll, Human resource, IT services, data recording, telemarketing, social media marketing and more
This report has been prepared as an assignment of International Economics. It is a brief report prepared to explain the SWOT Analysis BPO/KPO and ITES Industry.
Is digitization push among the top indian it services players paying offGaurav Vasu
Traditional Indian IT Services firms revenues and profitability hit by client's growing investment into new technologies such as AI, Machine learning, IoT, Blockchains and Analytics Platforms.
LIVE PROJECT ON JOB DESCRIPTION AND JOB ENGAGEMENT OF EMPLOYEES IN IT INDUSTRY.NISHIGANDHA BATWAL
The project was aimed to understand the IT sector. We choose Datamatics Global Services Limited to understand the JD and Job Engagement process at Datamatics Global Services Limited.
This document brings together a set
of latest data points and publicly
available information relevant for
Platforms & Applications Industry.
We are very excited to share this
content and believe that readers will
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Indian Outsourcing Vendors looking to increase Outcome based pricing revenues...Rajesh Prabhakar
ndian vendors are treading cautiously in terms of increasing the percentage of the outcome based pricing revenues as there are certain prerequisites for this model.
Blue Ocean Strategy Amazon Web Services – Leading the Cloud Computing Red OceanRajesh Prabhakar
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Blue Ocean Strategy – Air Asia Innovation & Blue Ocean strategy targeted non ...Rajesh Prabhakar
Air Asia did not target the traditional customers of Airlines and did not compete with the strong local player Malaysian Airlines but it focused on the multiethnic population of Malaysia that included Chinese, Indian, Indonesian, Thai, etc. who never traveled or cannot afford the airline fare.
Blue Ocean Strategy – Starbucks Mobile Payments Application, Loyalty Rewards ...Rajesh Prabhakar
Starbucks redefined highly competitive coffee shop business and successfully created an uncontested market by turning the simple coffee drinking experience into a way of life experience by drastically redefining the coffee shop environment by adding music, Wi-Fi, relaxed seating and luxurious interiors.
Uber created a new market which in initial stages was uncontested market space but in the growth stage competitors flooded the market but most of the competitors are irrelevant to Uber as the company is not only dominating the market but also fast expanding across the globe.
Case Study: Social Media Strategy @ Mercedes Benz – Targeting young Customers...Rajesh Prabhakar
Mercedes Benz has been actively engaging with customers and prospective customers particularly younger generation customers as part of its marketing and sales strategy "Mercedes-Benz 2020 - Best Customer Experience".
Social Media @ UBS – Social Media Monitoring outsourced to Accenture to hedge...Rajesh Prabhakar
UBS has outsourced its social media monitoring to Accenture which helps them to effectively monitor activity on social media platforms and identify the posts, comments and tweets that could affect its brand and reputation, and respond or countermeasure them fast and efficiently there by reducing the damage.
Case Study: Social Media Marketing Strategy @ JPMorgan Chase – Customer Servi...Rajesh Prabhakar
JP Morgan Chase, United States biggest bank has been actively using Twitter majorly for customer service as the bank's customer-service team responded to complaints, queries and also offered solutions to the problems and redressed the customer grievances.
Case Study: Social Media @ Wells Fargo – Listening to Customers through Socia...Rajesh Prabhakar
Wells Fargo made significant investments to set up its Social Media Marketing unit over the past 5 years for listening and evaluating the voice of their customers on various social networking sites and platforms effectively and respond to their grievances and queries
Oracle Social Media Sales Strategy – Encouraging Sales team to actively engag...Rajesh Prabhakar
Oracle Social Selling evangelist Jill Rowley argues that Sales professionals need to understand that buying process and buyers in today’s world are very different from earlier as they are digitally-driven, mobile, socially-connected, empowered with unlimited access to real-time information about business problems, products, companies, competitors — about all sorts of things.
AT&T Social Media Strategy: AT&T Social Circle employees as Social AdvocatesRajesh Prabhakar
AT&T social media strategy included utilizing the company’s employees who are already active on social networking sites like LinkedIn and Twitter and encourage them to share their opinions on the social media platforms and create awareness about the company’s products and services and also promote the marketing and other promotional campaigns.
General Electric Social Media Strategy – Innovative Technology oriented ContentRajesh Prabhakar
GE social media strategy can be called a digital content factory which is a convergence of different social media platforms that allows company and customers publish and share their own content. The company deals with significantly high quality content that discusses the innovations in technology, emerging technologies, explanation and description about existing technologies.
Case Study: Social Media Monitoring @ Toyota analyzes social media data for s...Rajesh Prabhakar
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Case Study: Unilever Social Media Strategy – Internal Digital Social Platform...Rajesh Prabhakar
Unilever launched an internal companywide social media campaign Project Sunshine that shifted from different marketing campaigns for individual products in different countries to a new strategy that promotes the brands' social-mission stories and urges consumers to make small changes in their own lives—changes that generally involve buying Unilever products.
Blue Ocean Strategy @ IBM – Customer Experience Lab Social Business & Analyti...Rajesh Prabhakar
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Social Media Strategy Case Study @ Nestlé – Digital Acceleration Team key to ...Rajesh Prabhakar
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Social Media Sales Strategy @ IBM Listening for Leads & inside sales teams
Indian BPO Industry losing its sheen & continue to face tough challenges in 2013
1. Analysis & Outlook
Indian BPO Industry losing its sheen & continue to face tough challenges in 2013
With diminishing cost arbitrage and margins, Indian BPO players are struggling to keep up the
growth and last four years (2008-2012), CAGR for the BPO sector has been slow at 12.47%
compared to India’s IT services exports, which posted a 17.23% growth during the same period.
With reducing client spends and IT budgets Indian BPO industry is further expected to face
tougher year in 2013. Another important reason is that India’s cost advantage as an offshoring
destination has dropped by 30-40% and also with high attrition rate (40%-50%) as companies are
finding it difficult to hold on to employees who were earlier attracted to the industry but
presently resenting the BPOs due to the lack of career growth opportunities and falling
compensation, perks, bonuses and benefits, industry is facing problems in fueling growth. There
has been significant pressure on the margins too due to wage inflation where in the salaries of the
employees have risen fast, foreign exchange losses as most of the revenues are dollar revenues
and companies failed to hedge the currency risks and the Indian rupee had been very volatile
ranging from `43 to `57.15.Companies like general motors who initially outsourced majority of
their business processes and IT processes to India have recently announced to move back the
outsourced jobs back to United States.
According to The Hackett Group, offshoring of jobs to India will be declining from 2014, and
will reach the end of its lifecycle in eight years, as the traditional model of US and European
companies moving finance, IT, and other business services jobs offshore will reach its maturity
and there will not be manyjobs left out with the companies to outsource to India.According to
Nasscom, software services are the fastest-growing segment with 19% growth in FY12, while
BPO exports grew at 12% over last year. “Gone are the days of over 30% growth for the BPO
sector, going forward it will be in low single-digit,” says TPI’s Pai.The rise of other low cost
destinations like Philippines and near shore destinations like Brazil, Argentina for United States
and Poland for Europe have been successful in attracting outsourcing business through quicker
response time, better technical support and near-shore advantages. Despite the low cost
Rajesh Prabhakar Analyst Bio @ http://itbizcharts.blogspot.com/
2. Analysis & Outlook
advantages these low cost locations cannot match India in terms of economies of scale, large
pools of skilled talent and workers, experience and technical knowhowand ability to deliver large
scale projects. But most of the Indian BPO vendors are not agreeing with the Hackett Group
view that Indian BPO will be reaching maturity and they are focusing on improving their product
and service offerings and move up the value chain.
Indian BPO vendors like Genpact, WNS, Infosys BPO, TCS BPO, HCL Tech BPO, Aegis, etc.
are struggling to keep up their revenues and margins. Industry leader Genpact had a very bad
Q32012(despite 14.3% increase in revenues net profit impacted by "foreign exchange re-
measurement loss and expenses related to special cash dividend") and the company highlighted
the volatile economic conditions and clients cutting down budgets but still indicated that it will
expect full-year revenues of $1.86- $1.90 billion, and adjusted operating income margin of 16-
16.5% in 2012. WNS which earlier had tough time in keeping up growth was able to attain a 6-
7% organic growth and guided double digit growth for 2013 as the company has verticalized
their services in domain and have adopted technology-enabled non-linear modelfor their service
offerings. Not only WNS but most of the BPO players in India like Genpact, etc. are moving up
the value chain by focusing on Analytics, Social Media, Consulting, Mobility and Cloud
computing to boost up margins. Products and Platform based offerings are being developed and
aggressively marketed to clients as the Indian BPO vendors are looking to increase nonlinear
revenues that are revenues independent of headcount rise. Outcome based pricing models are
also being adopted too by Indian BPO vendors despite significant risks and most of the BPOs are
targeting 30% revenues from Nonlinear outcome based models in next five years.
Generally BPO is not a high value work mostly clerical type of work which is monotonous and
repetitive. BPO is an intense operational game and there is severe competition between the
Indian vendors and the multinational vendors like IBM, Accenture, etc. which has led to
significant pricing where vendors cannot afford to rise prices and are facing severe margin
pressures. There is minimum difference between the service offerings of the various vendors
both Indian and Multinational, and the Indian BPO vendors could not expand their service
offerings sticking with the low end work and not moving up the value chain to more high end
work where they can charge more prices and increase their margins and the Indian BPO industry
could not scale up its size. “Today none of the standalone BPO firms are of significant size. They
are mostly in the $350-million range, expect for one or two like Genpact,” Sid Pai, partner and
MD, TPI India.But the Indian BPO vendors have realized this fact and they have been investing
significantly over the past few years in the development of products, platforms, new service
offerings, and emerging technologies like cloud computing, mobility, analytics and social
media.Multinational BPO players like IBM, Accenture, Dell, Xerox, Cap Gemini, etc. are
expanding their BPO operations in India and other Low cost destinations like Philippines,
Poland, etc. to offer more services to their clients and reduce costs.
“BPO business has become a big-guy game. Smaller players with niche competencies will get
acquired. Like in analytics space, every day you hear firms getting acquired by larger firms. It is
Rajesh Prabhakar Analyst Bio @ http://itbizcharts.blogspot.com/
3. Analysis & Outlook
a very consolidated game and a big player’s market,” says Genpact’s senior VP ShantanuGhosh.
Accordingly there has been consolidation in the Indian BPO industry like Firstsource Solutions
being acquired by Kolkata-based power utility company CESC for about R640 crore. According
to industry reports, the Essar Group backed Aegis and WNS are looking for PE funds to scale
their businesses. Recently, PE major Bain Capital picked up a 30% stake in Genpact for
$1billion. Infosys bought Australia based sourcing and category management services firm -
Portland Group Pty Ltd for $37Mn. Indian BPO has moved beyond “bread and butter” voice and
transaction processing and is increasingly looking for higher value-adding activities like KPO
(Knowledge Process Outsourcing), which comprises legal research, advisory and consulting
services among other offerings.
Genpact acquired Triumph Engineering, which provides engineering and technical services to
aviation, energy, and oil & gas industries, Atyati Technologies, a technology platform provider
for the rural banking sector in the country, and Accounting Plaza, a provider of finance and
accounting, human resources services and ERP services in 2012. WNS has acquired South
Africa-based Fusion Outsourcing Services in 2012 for £10 million Fusion provides outsourcing
services including contact centre, customer care and business continuity services to both South
African and international clients and would look at acquisitions of $5-20 million this year.This
clearly shows the Indian BPO vendors are acquiring companies for both the revenue growth and
for adding skills and capabilities to increase their service offerings.Most of the Indian vendors
are sitting huge cash reserves which they can utilize for acquisitions. Overall there is tough year
ahead for the Indian BPO vendors in 2013 and they need to prepare themselves for this by
aggressively improving their products and services offerings and also look for increasing their
nonlinear and outcome based revenues thus moving up the value chain.
Rajesh Prabhakar Analyst Bio @ http://itbizcharts.blogspot.com/