This document is a project submission for a B.Com Honours degree in Accounting and Finance from the University of Calcutta. It examines the Business Process Outsourcing (BPO) industry in India. The project was submitted by Vivek Saha in February 2013 and supervised by Professor Basudeb Sahukhan. The project consists of an introduction to BPO, the evolution of the BPO industry in India, an analysis of the size and segments of the Indian BPO industry, regulatory frameworks, trends in the industry including drivers of growth and challenges, an examination of the competitive landscape, and a critical analysis and conclusion.

1. (Submitted for the Degree of B.Com Honours in Accounting &
Finance under the University of Calcutta)
Title of the Project
―Business Processing Outsource (BPO)‖
Submitted by
Vivek Saha
Roll no. :
Registration No.:
Supervised By
February, 2013
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2. This is my proud privilege to express my deepest sense of gratitude and
ineptness to my Supervisor Professor Basudeb Sahukhan, Department of
commerce, Acharya Girish Chandra College, Kolkata-700003.
Words perhaps would fail to express the gratitude I owe to him. It would have
been impossible for me to complete the project work without his constant and
inspiring guidance and valuable suggestion at every stage of the project.
I am also indebted to all other teachers of the same department for their
constant support, inspiration and suggestions.
I express my gratitude to my parents, friends for their help and inspiration to
complete the project.
2

3. This project is based on ―BPO INDUSTRY IN INDIA‖. Business Process
Outsourcing is the delegation of one or more of the business processes to an
external provider, which in turn owns, manages and controls the selected
processes based on some specific standards. It was started in India in early 1980’s
by the British Airways who set-up their captive unit in Delhi.
BPO in India starts with low-end data entry processes, but now it move up the
value chain and deals in core business processes also. Both voice and non-voice
BPO Industry exists in India. Various types of services are performed, call
centers being the attraction today for the youth.
BPO operates through three types of business models viz. - Transactional, Niche
and Comprehensive. Finance and Accounting has also set its significant place in
BPO pie.
In 2008 BPO industry generates USD 12.8 Bn revenue, out of which exports
revenue was USD 10.9Bn. It will achieve USD 14.8 Bn by the end of 2009
(expected) and is expected to achieve USD 60Bn by 2012 and USD 225 Bn by the
end of 2020.
Cost competitiveness and talented pool of human resources are the key drivers in
the growth of BPO industry, but still some factors such as underdeveloped
infrastructure and competition from others low-cost countries are providing
challenge to the Indian industry, which needs to be addressed carefully by the
cooperation of government, NASSCOM and industry it self.
Still, India is shining in the BPO landscape and is the most attractive destination.
Sr.No. Pg. No.
TITLE
3

4. 1. Introduction (7-8)
. Definition 7
. Objectives 8
2. Evolution (9-10)
3. Sizing Of BPO In India (11-16)
4. Segments In BPO (16-22)
. Voice & Non-Voice 18-21
. Horizontal & Vertical 21-22
5. Steps Followed While Outsourcing. (22-23)
6. Regulatory Framework Of Indian BPO. (24-25)
. Data Protection Law. 24
. Sarbanes Oxley Act. 25
7. BPO & Finance. (25-28)
8. Trends In BPO Industry. (29-31)
. Drivers of BPO Growth. 30-31
. Issue & Challenges. 31
9. Competitive Landscape Of Indian BPO. (32-36)
10. Critical Analysis Of BPO. (36-39)
. Benefits of BPO. 36-37
. Limitations of BPO. 37
. SWOT Analysis. 38-39
11. Conclusion (39-40)
Bibliography 41
Annexure-1 42
Annexure-2 43
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5. Sr.No Pg. No.
FIGURES
1. Definition Of BPO. 7.
2. History Of BPO In India. 9.
3. Value Of Chain Of BPO In India. 10.
4. Growth Of BPO In Terms Of Exports. 11.
5. Growth In Domestic BPO Revenue. 12.
6. Total BPO Growth in Terms Of Revenue. 13.
7. BPO & Employment. 14.
8. Size Of BPO Global Market. 15.
9. Global BPO Market Share. 16.
10. Classification Of Voice & Non-Voice BPO. 17.
11. Horizontal & Vertical BPO. 21.
12. Vertical Segments In BPO. 22.
13. Steps To Be Followed While Outsourcing. 23.
14. Financial BPO Process Being Outsourced. 26.
15. Top 10 BPO Companies. 32.
16. SWOT Analysis. 36.
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6. Sr.No. Pg. No.0.
TABLES
1. BPO Growth In Export. 11.
2. BPO Growth In Domestic Market. 12.
3. Overall (Export & Domestic) Growth. 13.
4. Employment Generated By BPO. 14.
5. Global BPO Market. 15.
6. Major Players In BPO Finance 18.
6

7. 1. INTRODUCTION TO BPO
DEFINITION OF BPO
OUTSOURCING: -
An organization entering into contract with another organization to operate and
manage one or more of its business processes
BASED ON
BASED ON
VOICE
LOCATION
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8. BUSINESS PROCESS OUTSOURCING: -
It is the delegation of one or more of IT intensive business processes to an
external provider, which in turn owns, manages, and administers the selected
processes based on defined and measurable performance criteria.
BPO as per the work performed can be classified as VOICE BASED, which
includes customer related services such as technical support, marketing etc. and
NON-VOICE, which includes internal business operations. And as per the
location involved it can be classified as:
ON-SHORE: BPO that is contracted inside a company’s country.
NEAR-SHORE: BPO that is contracted to a company’s neighboring country.
OFF-SHORE: BPO that is contracted outside a company’s country.
OBJECTIVES OF BPO:
Traditionally, the main objective of companies outsourcing their business
processes to India was the want of low cost. But now-a-days, companies that
offshore their business processes to India are no longer looking at cost reduction
alone. They typically want to achieve:
1) Process improvement and efficiency - faster turnaround and greater
productivity
2 ) C o s t s a v i n g s .
3) Improved quality - less errors/rework
4) Building/strengthening presence in a new market/foreign country
5) Increased focus on core competencies - e.g. developing new products or
services
6) Building business value and strategic differentiation.
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9. 2. EVOLUTION OF BPO IN INDIA.
Outsourcing as a concept is probably one the oldest and most commonly
practiced. As a concept and practice it pervades all aspects of our lives- domestic
as well as professional. The idea of outsourcing has its roots in the `competitive
advantage` theory propagated by Adam Smith in his books ` THE WEALTH OF
NATIONS ` which was published in the year 1776. Over the years, the meaning of
the term outsourcing has undergone a sea-change.
Evolution of BPO in India can further be explain under two
heads:-
1. HISTORY OF BPO IN INDIA.
2. VALUE CHAIN OF BPO IN INDIA.
1. HISTORY OF BPO IN INDIA: In India BPO started with British
airways setting their back-office operations in Delhi in early 1980`s. Starting with
captive units India BPO moves to the third p[arty BPO`s. thereafter the entry of IT-
majors brightens the Indian BPO industry in global BPO landscape.
Following diagram depicts briefly the history of BPO in India:
9

10. 2. VALUE CHAIN OF BPO IN INDIA:
Value chain is a chain describing the value of business processes being outsourced to
India. Value can be explained as the importance of business processes to the firm
outsourcing its business operations. India is moving up in the value-chain. At the
beginning only low end data entry processes were outsourced to India. With the
passage of time trend goes on changing. From low value data entry processes chain
moves up to core processes being outsourced now-a-days. It started with:
MID-1990’s- DATA ENTRY PROCESSES: Data entry simply includes entry of data
from papers, books or any hard copy format to computer aided soft copy.
DATA CONVERSION PROCESSES: Conversion of data across various databases on
different platforms.
LATE 1990’s- CALL CENTRE SERVICES:
Call centers are outlets that exist mainly to answer inbound or place outbound
telephone calls and can exist for the purpose of sales, marketing, telemarketing,
customer service, technical/non technical support or any other specific business
activity.
2000- TRANSCRIPTION PROCESSES: Transcription process implies transcribing
the audio or visual information into electronic document form.
Up till 2000 only non-core activities were outsourced. Then the trend changed and
today the core activities also occupy a significant proportion in total Indian BPO pie.
TRANSCRIPTION
TRANSCRIPTION -PROCESS-CORE
CALL- - PROCESS- NON
DATA CENTRE CORE
DATA ENTRY CONVERSION
MID 1990’S LATE 1990’S 2000 TODAY
Fig 3: VALUE CHAIN OF BPO IN INDIA
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11. Fig. 4 –GROWTH OF BPO IN TERMS OF EXPORTs
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12. The above figure clearly shows that exports in the BPO market are increasing at
the fluctuating rate. In 2003 it was USD 2.6 billion. Then it increased to USD 3.1
billion in 2004.And in the financial year 2008 it was USD 10.9 billion. It is
expected to reach at USD 12.8 billion by the end of 2009. Figure indicates that it
grows almost at the rate of 50% from 2003 to 2006. After that it grows almost at
the rate of 20%-30%.
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13. The above figure shows the trend of growth in domestic revenues of Indian BPO
industry. It shows that onshore component is less than offshore component. In 2003
revenue of BPO from domestic industry was USD 0.2 Billion. It increased to USD 0.3
Billion in 2004. Then in 2008 it was USD1.6Billion and is expected to reach USD 1.9
Billion at the end of 2009. It is growing at a slow pace than export component of BPO
market.
Table 3:- OVERALL (Export & Domestic) BPO Growth
FIG 6: TOTAL BPO GROWTH IN TERMS OF REVENUE
As shown by the figure overall BPO grow steadily at the rate of almost 28% in
2005 total BPO industry was USD 12.5 Billion while it is expected to reach USD
Billion in 2009.
FUTURE LOOK: As per the study conducted by NASSCOM Indian BPO
industry is growing at a CAGR of 28%. If it continues with this pace it will reach
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14. to USD 30Billion by 2012 but it is expected that it will touch USD 60 Billion
because of the many advantages it has over the competitors.
While the other study of NASSCOM predicts the Indian BPO market will reach
USD 225 Billon by 2020.
So it can be represented as:
2012=USD 60Billion E.
2020= USD 175 Billion (Exports) +USD 50 Billion (domestic) .
So 2020= USD 225 Billion.
E= Expected.
D. IN TERMS OF EMPLOYMENT GENERATED
TABLE 4. EMPLOYMENT GENEREATED BY BPO
FIGURE 7. BPO AND EMPLOYMENT
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15. So the greatest pool of graduates is moving towards the BPO industry thereby
decreasing the unemployment and developing the economy by utilizing the
available pool of talent.
2. GLOBAL BPO MARKET AND INDIA’S SHARE:
Global BPO market is also growing at the rapid pace. As shown by the following
table in 2012 it was USD 5.1 Billion and progressed to USD 53.4 Billion in 2017.
FIGURE 8- SIZE OF GLOBAL BPO MARKET
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16. Out of this total global market India’s share is estimated to be 5-6%, currently as
shown by the following diagram. US have the largest share of 52% followed by
UK which commands 20% of the BPO pie. GARTNER predicts that India’s
share in the Global BPO market will get double by 2010i.e. it will reach to 10% of
total BPO market.
FIGURE 9- GLOBAL BPO MARKET SHARE
4. SEGMENTS IN BPO
BPO in India is organized in many segments. Previously there was only low end
voice operations were outsourced to India. In the early days of BPO in India voice
operations were the major actors leaving a very small proportion for non-voice
activities. But, as India moves up in the value chain, non-voice operations starting
occupy a bigger proportion of the BPO pie. Except voice and non-voice, BPO in
India can also be segmented into horizontal and vertical.
16

17. So business process outsourcing can be segmented as:
1. VOICE AND NON-VOICE BPO.
2. HORIZONTALLY AND VERTICALLY BPO.
1. VOICE AND NON-VOICE BPO.
BPO
NON-VOICE
VOICE BPO
BPO
INBOUND SALES ACCOUNTING
OUTBOUND SALES DATA ENTRY
TELEMARKETING DATABASE MANAGEMENT
CUSTOMER SERVICES CLAIMS PROCUREMENT
ORDER PROCESSING TRANSCRIPTION
TECHNICAL SUPPORT HUMAN RESOURCES
APPOINTMENT SETTINGS
DEBT COLLECTION
HELP DESK
MARKET RESEARCH AND
QUALITY SURVEYS
17

18. FIGURE 10: CLASSIFICATION OF VOICE AND NON-VOICE
BPO
(A) VOICE BPO (FRONT OFFICE OPERATIONS)
Voice activities being outsourced include:
1. INBOUND SALES:
2. OUTBOUND SALES
3. TELEMARKETING
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19. 4. CUSTOMER SERVICE
5. ORDER PROCESSING
6. TECHNICAL SUPPORT
7. APPOINTMENT SETTING
8. DEBT COLLECTION
9. HELP DESK
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20. 10. MARKET RESEARCH AND QUALITY SURVEYS
(B) NON-VOICE BPO (BACK OFFICE OPERATIONS)
1. ACCOUNTING.
2. DATA ENTRY.
Data entry services helps in getting large amounts of information added into databases
or specific applications, cost effectively.
3. DATABASE MANAGEMENT.
Every business has customer and contact databases to manage and keep up to date.
Database management service allows keeping database clean and up to date through a
program of contacting our customers to ensure you have the latest information.
4. CLAIMS PROCESSING.
Typically associated with the insurance industry, claims processing actually covers any
process that starts with a customer enquiry that requires investigation, analysis,
assessment, decision, and follow-up with a formal response.
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21. 5. TRANSCRIPTION.
Transcription is the process of converting the audio or visual information into
electronic document form.
Medical transcription was one of the first offshore BPO services to be launched from
India. This service involves the transcribing of medical records from audio format or
dictated by doctors or other healthcare into either a hard copy or electronic format.
6. HUMAN RESOURCE
Human resources are the manpower employed by the firm. It is the valuable asset of
the company. More and more businesses are outsourcing their human resource
business function or parts of that function to experts who do this service full-time. This
ranges from hiring processes to management of employee benefits process to payroll.
Businesses that find a high quality service provider outsource their HR activities and
can increase their employee satisfaction vis-à-vis reduce expenses.
2. HORIZONTAL AND VERTICAL BPO:
There are two types of BPO opportunities in the market—
1. High volume and low value
2. High value and low volume. High-volume and low-value are the horizontal BPO’s
while high-value and low-volume are the vertical BPO’s.
Horizontal Vertical
BPO
BPO BPO
Figure 11: HORIZONTAL AND VERTICAL BPO
Now lets discuss in detail:
21

22. (A) HORIZONTAL BPO
(B) VERTICAL BPO
Fig.12: VERTICAL SEGMENTS IN BPO.
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23. 5. STEPS TO BE FOLLOWED WHILE OUTSOURCING
Outsourcing means we are handling our business processes to some outsider
firm. So when the firm is outsourcing its core high -valued business processes
it should take diligent care as any mistake can mar the firm. Not only the
core ones, even non-core processes contribute a lot to the firm directly
or indirectly. So outsourcing decision should be made carefully. For
outsourcing to be effective there are certain steps which need to be followed:
Security level
Fig. 14: STEPS TO BE FOLLOWED WHILE OUTSOUCING
23

24. 6. REGULATORY FRAMWORK ON INDIAN BPO
A. DATA PROTECTION LAW.
24

25. B. SARABANES OXLEY ACT.
7. BPO AND FINANCE.
25

26. A. SEGMENTS IN BPO FINANCE.
1. COMPANIES IN BANKING, FINANCIAL SERVICES AND
INSURANCES (BFSI).
If they outsource finance, it is their core business that they are outsourcing. In fact,
finance has been at the forefront of outsourcing – General Electric, American Express
and Citi Bank led the initiative in India. The reason is that their customer-facing front
office is in high cost locations. But there are functions, which, if delivered at low costs,
would have a major impact on their balance sheets.
2. NON-BFSI COMPANIES.
From them, the finance function is important as it helps the rest of the organization
runs smoothly. So such a company will outsource functions likes sales orders
processing, accounts payable, receivable managements, balance-sheet management and
cash management. For instance, a US based industrial major currently evaluating
finance BPO companies in India has 850 employees looking at finance at a total annual
cost of $110 million. Global airlines also, under cost pressures, are looking India to
outsource revenue accounting and sales audit functions. These include British Airways,
Australian Airlines, Malaysian Airlines and Qatar Airways.
B. FINANCIAL BPO PROCESSES BEING OUTSOURCED:
Three types of financial processes are being outsourced to India. These include:
TOP END
ACTIVITIES
1.
(AROUND 10%)
MIDDLE END
ACTIVITIES
2.
(AROUND 25%-
33%)
CLERICAL LOW END
3. ACTIVITIES
Fig.15: Financial BPO process
(AROUND 65%-75%) being outsourced
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27. 1. CLERICAL LOW GRADE WORK:
Most of the work being outsourced to India in finance and accounting vertical consists
of clerical low-grade work. Almost 60% to 70% of the work includes processes like
transaction, accounting, fixed assets (depreciation calculation etc.), account receivable,
account payable, travel & living, cash application (goes into making ledger entries) and
account reconciliation.
2. MIDDLE LEVEL:
The middle level which constitutes almost 25% to 35% of the work includes processes
like accounting operations, general ledger consolidation, reporting. It also includes
tasks such as income tax returns.
3. TOP-END ACTIVITIES:
The top end activities constitute only 10% of the work in the finance and accounting vertical.
At the top end of the scale are activities like administration of mortgage-backed securities,
financial planning and analysis, requiring expertise of at least MBA finance or a statistics
graduate. Other work in this category includes equity/debt market research and analysis.
C. REASONS FOR OUTSOURCING FINANCE AND ACCOUNTING
There are many reasons which lure a business to outsource its finance and accounting
operations. These are:
1. EXPECTATION TO REDUCE COST:
Study conducted by Deloitte suggests that the firms achieve 39 percent cost savings
from moving operations to low-cost centers.
2. STANDARDIZING THE FINANCE AND ACCOUNTING PROCESS:
Companies on their own do not have the ability to standardize finance & accounting either
because of a lack of specialized resources, scale or simply because this is not their prime area
of focus. This is why it makes sense to outsource it. And as the back office becomes more
standardized, in particular the accounting functions, even bigger cost savings can be seen.
3. OUTSOURCING DISASTER RELIEF:
Organizations have become extra cautious after the WTC disaster and want to have
protection against disasters. Finance & accounting activities constitute a major part of the
activities of all corporate and as such even organizations not having finance and accounting as
their core processes want to safeguard their finance & accounting processes. For example,
after the collapse of the WTC the Twin Towers Fund (TTF) gave the task of handling the
27

28. accounting functions to outsource Partners International (OPI), a BPO firm specializing in
finance and accounting. OPI's Bangalore office handles most of TTF's accounting work.
Source documents are scanned in New York and sent to Bangalore by remote connection; the
Bangalore office handles 95 percent of document and transaction processing.
4. REAPING THE BENEFITS OF ECONOMIES OF SCALE:
Outsourcing finance and accounting processes to cheaper locations where manpower and
infrastructure is less costly gives the outsourcing companies the advantage of economies of
scale. Moreover working hours can be increased in locations such as India by increasing the
number of shifts.
5. BENEFITING FROM THE TECHNOLOGY AND EXPERIENCE OF
THE SERVICE PROVIDER:
The service gives cutting edge technology and has expertise in specific verticals. Hence it is
able to provide the benefit of excellent expertise and best process in that specific vertical.
D.MAJOR PLAYERS IN INDIA BPO FINANCE
Following is the list of major players in this vertical and the approximately number
of people in the respective organization.
Table7. Major players in BPO finance
The above table explains the major BPO players who are dealing in outsourcing finance
including other business process, and the number of people employed by them in finance 28
outsourcing.

29. 9. TRENDS IN INDIAN BPO INDUSTRY
Trends imply the various changes which we are going to see in the near future in Indian BPO
industry whether positive or negative.
Various trends include:
1. OUTSOURCING WILL STAY CLOSER TO HOME.
With available labor from layoffs in many industries and tightened risk profiles of companies,
especially in the financial services industry, companies won't have to go far offshore to find
talent. Planned initiatives by Barrack Obama and increased government spending on
infrastructure projects could lead to more domestic outsourcing, particularly for construction,
real estate and technology, IAOP predicts.
2. GLOBAL UNCERTAINITIES WILL CREATE OUTSOURCING VOLATILITY:
Overall, the fast-paced growth in outsourcing will slow in 2009, as companies lower
their spending on information technology, consolidate or exit markets, and find skilled labor
locally from layoffs in financial services and other industries.
3. STRATEGIC COMPANIES WILL PROSPER:
The economic meltdown could create opportunities for strong, well-positioned
companies."While the economic climate will not immediately improve, companies involved in
outsourcing that act strategically and decisively for the long-term will be increasingly valued
and sought," said IAOP board member Sven Govaars, senior vice president, Colliers
International.
4. SHIFT IN FOCUS FROM COST ARBITRAGE TO VALUE ADDITION:
Traditionally the main aim of the companies outsourcing to India was the cost saving. But
now as India moves up the value chain, this aim shifts to value-addition and efficiency.
5. SOCIAL RESPONSIBILITY WILL BE OUTSOURCING THEME:
New government direction under OBAMA could promote higher emphasis on socially
responsible business environments; driving outsources to create solutions that address them.
IAOP predicts will include industry competitive employee retention and welfare programs.
6. IT WILL ALSO CREATE NEWRER OPPORTUNITIES, NEW MARKETS AND ALSO
THE NEW SERVICES.
7. SERVICE PROVIDERS WILL SHIFT FROM TIER-1 TO TIER-2 AND TIER-3 CITIES
THEREBY CREATING RURAL BPO’S.
29

30. A. DRIVERS OF BPO GROWTH IN INDIA:
A driver is most commonly a factor that contributes to the growth of a
particular business.
There are mainly six important business drivers that are pushing enterprises
to consider the BPO option in India. These are:
1. ABUNDANT TALENT.
India’s young demographic profile is an inherent advantage complemented by an academic
infrastructure that generates a large pool of English speaking talent. Talent suitability
concerns are being addressed through a combination of government, academia and industry
led initiatives. It includes efforts by NASSCOM and other education agencies like UGC and
AICTE to facilitate industry inputs on curriculum and teaching.
2. SUSTAINED COST COMPETITIVESS:
India has a strong track record of delivering a significant cost advantage, with client’s
regularly reporting savings of 25%-50% over the original cost base. the ability to achieve such
high levels of cost advantage by sourcing to India is driven by the ability to access highly
skilled talent at lower wage cost.
3. CONTINUED FOCUS ON QUALITY.
Demonstrated process quality and expertise in service delivery has been a key factor driving
India’s leadership in global service delivery. Since the inception of industry in India, players
within the India has been focusing on quality initiatives, to align themselves with international
standards.
4. WORLD CLASS INFORMATION SECURITY ENVIRONMENT:
Indian authorities have built a strong foundation for an ―info-source‖ environment in the
country. These include strengthening the regulatory framework through proposed
amendments to further strengthen the IT Act-2000.
5. RAPID GROWTH IN KEY BUSINESS INFRASTRUCTURE.
BPO sector has been a key beneficiary with the cost of international connectivity declining
rapidly and service level improving significantly. The growth is taking place not only in
existing urban centre but also in satellite towns and smaller cities.
The enabling policy environment in India was instrumental in catalyzing the early phase
of growth in this sector. Policy makers in India have laid special emphasis on encouraging
30

31. foreign participation, with participating firms enjoying minimum regulatory and policy
restrictions along with a broad range of fiscal and procedural incentives.
B. ISSUES AND CHALLENGES IN BPO GROWTH:
1. INFRASTRUCTURE CHALLENGE:
India’s ITES-BPO industry continues to attract significant business from both the US and Western
Europe. While national issues with infrastructure, e.g. telecommunications system etc is being
addressed, the local infrastructure (roads, bridges, airports, urban transportation, etc) is becoming a
bottleneck to the expansion of capacity. Getting a connection is still not a hassle-free job.
2. MOVING UP THE VALUE CHAIN:
Customers are looking for vendors who can provide end-to-end solutions. Indian vendors are
using several methods like tie-ups with existing players, acquisitions, investing in research and
development and leveraging industry best practices for expansion.
3. SHRINKING PROFIT MARGINS:
To sustain in the highly competitive market, the players are looking for newer revenue sources
and opportunities to keep cash flowing in. Again with service level agreements becoming
stringent and sales cycles stretching far in international deals, the BPO service providers need
deeper pockets and financial muscles. High initial capital investments in the industry, long
gestational periods, competition leading to reduced billing rates, appreciation of rupee against
the US dollar have led to increased margin pressures and increased industry consolidation.
4. HUMAN RESOURCE ISSUES:
Another major problem is the high attrition and growth aspirations of the workforce. Odd
hours at job and stress are supposed to be major causes of high attrition rate which increases
recruitment and training costs. The service providers need to spell out a comprehensive
human resource policy that outlines a clear career progression path for the employees.
5. OTHERS:
31

32. 10. COMPETITIVE LANDSCAPE OF BPO IN INDIA
BPO Industry in India is growing very fast. It is gaining ground everywhere. There is a lot
of competition today in BPO landscape. Let’s check out which are the major players in India.
We will study this under two heads:
Following is the list of Top 10 BPO Companies In India By Maximum Revenue as per data
released by Dataquest, an industry journal. The BPO companies in India posted a total
revenue of Rs. 32,246 crore in 2010-2011.
As per the Industry fact sheet published by NASSCOM, the Indian ITES-BPO segment grew
at 37% in 2005-06 (ITES-BPO) and the exports are expected to cross US$ 9 billion by end
2007.
TOP 10 BPO CAOMPANIES IN INDIA
BASED ON REVENUE BASED ON
EMPLOYEE
SATISFACTION
1. GENPACT. 1. DAKSH-E-SERVICE
2. TCS BPO. 2. ISEVA
3. AEGIS BPO. 3. ICICI ONESOURCE
4. WIPRO BPO. 4. EFUNDS INTERNATIONAL
5. FIRST SOURCE SPOULTIONS. 5. HINDUJA TMT
6. WNS GLOBAL SOLUTIONS. 6. EXL SERVICES
7. INFOSYS BPO. 7. AJUBA
8. ADITYA BIRLA MINACS. 8. MOTIF
9. IBM DAKSH. 9. MIT SMART SERVE
10. IBM GLOBAL PROCESS SERVICES 10. HCL TECH BPO
Fig. 16- TOP 10 BPO COMPANIES IN INDIA.
Now detailed description of BPO’s based on Revenue:
32

33. 1. GENPACT:
Genpact was born in 1997 as the India-based business process operations for GE Capital. In
2005, with equity investments from General Atlantic and Oak Hill Capital Partners, it became
an independent company and was rebranded Genpact. It is India's No. 1 BPO firm.
2. WNS GLOBAL
3. IBM DAKSH
33

34. 4. ADITYA BIRLA MINACS WORLDWIDE
34

35. 5. WIPRO BPO:
Now detailed description of BPO’s based on Employee Satisfaction:
1. ISEVA.
2. ICICI ONE SOURCE.
35

36. 3. EFUNDS INTERNATIONAL.
4. AJUBA.
5. MOTIF.
10. CRITICAL ANALYSIS OF BUSINESS PROCESSOUTSOURCING
Critical analysis means an appraisal based on careful analytical evaluation. Now for
analyzing the BPO industry we will study its:
1. Benefits of BPO industry.
2. Limitations of BPO industry.
3. SWOT Analysis.
36

37. 1. BENEFITS OF OUTSOURCING:
 Outsourcing your non-core activities will give you more time to concentrate on
your core business processes.
 Off shoring can give you access to professional, expert and high-quality services.
 With outsourcing your organization can experience increased efficiency and
productivity in non-core business processes.
 Offshore outsourcing can help you save on time, effort, manpower, operating
costs and training costs amongst others.
 Outsourcing can make your organization more flexible to change.
 Your organization can save on investing in the latest technology, software and
infrastructure as your outsourcing partner would be investing in these.
 Outsourcing can give you assurance that your business processes are being
carried out efficiently, proficiently and within a fast turnaround time.
 Off shoring can help your organization save on capital expenditures.
 By outsourcing, your company can save on management problems as your
offshore partner will be managing the team who does your work.
 By outsourcing, you can cater to the new and challenging demands of your
customers.
 Sharing your business risks is possible with outsourcing.
 Outsourcing can give your business a competitive advantage as you will be able to
increase productivity in all the areas of your business.
 Outsourcing can help your organization to cut its operational costs to more than
half.
 If you want your organization to stay ahead of competition, concentrate on core
competencies and make use of the latest technologies, then outsourcing can help
your organization achieve all this and more.
2. LIMITATIONS OF OUTSOURCING:
 At times, it is more cost-effective to conduct a particular business process, rather
than outsourcing it.
 While outsourcing services such as payroll processing services and tax
preparation services, your outsourcing provider will be able to see your
company’s confidential information and hence there is a threat to security and
confidentiality in outsourcing.
 When you begin to outsource your business processes, you might find it difficult
to manage the offshore provider when compared to managing processes within
your organization.
 Off shoring can create potential redundancies for your organization.
 In case, your offshore service provider becomes bankrupt or goes out of business,
your organization will have to immediately move your business processes in-
house or find another outsourcing provider.
 The employees in your organization might not like the idea of you outsourcing
your processes and they might express lack of interest or lack of quality at work.
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38.  Your outsourcing provider might not be only providing services for your
organization. Since your provider might be catering to the needs of several
companies, there might be not complete devotion to you and your company.
 By outsourcing, you might forget to cater to the needs of your valuable customers
as your focus will be on the business process that is outsourced.
 In outsourcing, you may lose your control over the process that is outsourced.
 Outsourcing, though cost-effective, might have hidden costs, such as the legal
costs incurred while signing a contract between companies. You might also have
to spend a lot of time and effort in getting the contract signed.
3. SWOT ANALYSIS OF INDIAN BPO INDUSTRY
WEAKNESS
STRENGHT THREATS
OPPORTUNITIES
FIGURE 17 - SWOT ANALYSIS OF INDIAN BPO INDUSTRY
1. STRENGTHS:
 Highly skilled, English-speaking workforce.
 Abundant manpower.
 Cheaper workforce than their Western counterparts. According to Nasscom, The wage
difference is as high as 70-80 percent when compared to their Western counterparts.
 Lower attrition rates than in the West.
 Dedicated workforce aiming at making a long-term career in the field.
 Round-the-clock advantage for Western companies due to the huge time difference.
 Lower response time with efficient and effective service.
 Operational excellence.
 Conducive business environment.
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39. 2. WEAKNESSES:
 Recent months have seen a rise in the level of attrition rates among BPO workers who
are quitting their jobs to pursue higher studies. Of late workers have shown a tendency
not to pursue BPO as a full-time career.
 The cost of telecom and network infrastructure is much higher in India than in the US.
 Manpower shortage.
 Local infrastructure.
3. OPPORTUNITIES:
 To work closely with associations like Nasscom to portray India as the most favoured
BPO/ITES destination in the world.
 Indian BPO/ITES companies should work closely with Western governments and
assuage their concerns and issues.
 India can be branded as a quality BPO destination rather than a low-cost destination.
 $60 billion BPO business by 2010.
4. THREATS:
 The anti-outsourcing legislation in the US state of New Jersey. Three more states in the
United States are planning legislation against outsourcing. These are- Connecticut,
Missouri and Wisconsin.
 Workers in British Telecom have protested against outsourcing of work to Indian BPO
companies.
 Other BPO/ITES destinations such as China, Philippines and South Africa could have
an edge on the cost factor.
 Slowdown of demand.
11. CONCLUSION
Business Process Outsourcing industry is growing rapidly since its inception. Indian
BPO’s are going through exciting times. Starting with captive units and low-end
activities BPO’s are now moving to high-end activities. Indian BPO’s are operating in
both front-office and back-office operations.BPO industry in India is growing at the
rate of 28% and is expected to reach around USD14.8 Bn in2009. Exports are
accounting major proportion, which are in journey to touch USD 12.8 Bn by the end of
2009. These are growing at the fluctuating rate of around 20%-30% a year. Domestic
BPO market is also in growth and has accounted USD1.6 Bn in 2008.Inspite of this
BPO’s are helping in the development of economy by decreasing the evil
of unemployment. Since the evolution of BPO it is serving the country by providing the
employment to talented and able youth of the country. Up till 2009 it has generated
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40. around 730,000 employments in the country. Shift in BPO services has also been
experienced with moving from low-end to BFSI (Banking, Financial Services and
Insurance) and Hi-Tech sector. But the economic downturn has impacted the growth of
BPO industry. Still it occupied 60% of the offshore market. The industry is expected to
achieve USD 60 Bn by the end of 2012. And USD 225 Bn by the end of 2020.Various
trends have been experienced in BPO.
The BPO industry is drawing significant attention and India, by virtue of its
dominance in this sector is at the center of this attention. The shift of the Indian
economy towards more service orientation suggests that in the long term, India will
continue to be a major player in the global BPO industry.
Despite the growth that this industry is witnessing, there are certain areas that require
greater attention going forward from service providers to ensure that the industry
remains firmly on the growth path. This survey was conducted with the objective of
analyzing some of the key trends that will drive the future direction of the industry. We
Have endeavored to highlight some of the key risks that the industry faces and will face
as the industry evolves. We have also discussed the corresponding risk-mitigants that
service providers and companies are focusing on, to manage the risks. We hope that
this survey provides service providers with a deeper understanding of the
Industry they operate in and acts as an important input to potential customers
considering outsourcing their processes to India.
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41. 1. www.nasscom.com
2. www.bpoindia.com
3. www.equaterra.com
4. www.economictimes.com
5. www.coolavenues.com
6. www.outsourceindia.com
7. www.tutorialreports.com
8. www.dataquest.com
9. www.outsourcingprofessional.com
10. www.google.co.in
11. www.wikipedia.com
12. www.chillibreeze.com
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42. Supervisor’s Certificate
This is to certify that Mr. BIKKY SHAW student of B.com (Honours) in
Accounting & Finance of Acharya Girish Chandra College under the University
of Calcutta has worked under my supervision and guidance for his project work
and prepared a Project Report with the title ―Business Processing Outsource
(BPO).‖
The project which he is submitting is his genuine and original work to the best of
my knowledge.
Place: Kolkata Name: Prof. Basudeb Sahukhan.
Date: Designation:
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43. Student’s Declaration
I hereby declare that the Project Work with the title ―Business Processing
Outsource (BPO)‖ submitted by me for partial fulfillment of the degree of
B.Com (Honours) in Accountancy & Finance under the University of Calcutta is
my original work and has not been submitted earlier to any other University for
the fulfillment of the requirement for any course of study.
I also declare that no chapter of this manuscript in whole or in part has been
incorporated in this report from any earlier work done by others or by me.
However, extracts of any literature which has been used for this report has been
duly acknowledged providing details of such literature in the references.
Place: KOLKATA Bikky Shaw
Date: 30, K.P Saha Street, Kolkata – 28
Registration No.: 141-1121-0093-10
Roll No.: 1141-61-0056
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