The document discusses India's business process outsourcing (BPO) industry. It notes that while other countries like China, Philippines, and Malaysia are gaining in the BPO industry, India remains the top outsourcing destination globally according to a recent report. This is due to factors like availability of English-speaking talent, lower costs, strong infrastructure, and high quality of services in India. Several Indian cities like Bangalore, Mumbai, and Delhi feature highly in the rankings of top outsourcing destinations worldwide. The document concludes that India is well-positioned to retain its leading position in the global outsourcing industry.

1. STANDING
STRONG
The India BPO
Industry Report 2013
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2. India is once again in the news - but not for something the
Indians would find very flattering. Recent reports about the
Indian Rupee’s rapid fall, dangerously exposing it to wild market
swings, is hogging the headlines of all major dailies worldwide.
It’s no surprise that policymakers are now scrambling for
solutions to avert a much bigger economic disaster easily get
out of hand. If there’s one silver lining out of all of this, it’s that
the Indian BPO market is still standing strong and ironic as it
is, the weak Rupee makes the country a more cost-competitive
destination for global outsourcing firms.
In a recent report by Live Mint & The Wall Street Journal, quoting
findings from Cushman & Wakefield, it was revealed that India
remains an attractive destination for IT and BPO companies,
ahead of China and Philippines.
“
The availability of
qualified and affordable
manpower coupled
with positive business
environment continues to
be India’s main source of
strength.
”
“The Philippines, China, Malaysia, Indonesia and Vietnam
are consolidating their positions in different domains of the
outsourcing business even as India remains a prime destination
for software development and BPO operations thanks to its
pool of English-speaking talent, good network infrastructure,
cost arbitrage and high quality of services,” the report noted.
On India’s emerging destinations, it said that “apart from
established IT destinations Bangalore, Chennai, Hyderabad,
Pune, Gurgaon, Kolkata and Mumbai, tier-II and tier-III cities
such as Bhubaneswar, Chandigarh, Jaipur and Kochi are
emerging as new destinations for IT businesses.”
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3. Other countries
vying for the top spot
In the global BPO space, India is on top. But, how long might this last? Serious competition posed
by other emerging countries in the region can’t simply be ignored. In fact, a recent Nasscom
report indicated that India has lost about 10 percent market share to the rest of the world in
the last five years, while countries like China, Malaysia and Philippines are slowly gaining
momentum.
Malaysia
The Malaysian SSO Industry houses nearly 250 centres and has been identified under the ongoing Economic Transformation Program as a key driver for growth. Shared services is today
recognized as a competitive strategy leveraging Information & Communication Technology
(ICT), Finance & Accounting, Human Resources and Engineering Design & Services to improve
organizations.
The main 5 industry sectors supported by shared services in Malaysia are:
1.
2.
3.
4.
5.
Banking, Financial Services & Insurance (BFSI)
Information & Communication Technology (ICT)
Pharmaceutical & Health (P&H)
Logistics & Transportation (L&T)
Energy, Chemical & Resources (ECR)
China
China has a large, skilled population of workers who have mastered or grew up hearing and
speaking Japanese and Korean. BPO’s are growing and moving into Dalian, in the north-east
which has been traditionally either a part of the Korean, or the Japanese empires for over half
of the last 500 years. Look for Dalian and other eastern cities to take on more R&D, ITO and
high-end BPO work for Korea, Japan and the rest of the developed world over the next five years.
Philippines
Latest available information revealed that the Philippine IT-BPO industry has 30-per cent share of
the US market and 15-20 per cent of Asia Pacific; the BPO sector accounted for 630,000 workers
and $11 billion in revenues in 2011 according to a report from Stratbase Research Institute (SRI).
In recent years, the Philippines has earned a reputation as one of the most preferred
Outsourcing destinations in the world. In a latest study of Philippine IT-BPO Road Map 2011-2016
commissioned by the Business Processing Association of the Philippines (BPAP), the country’s
largest business process outsourcing group, plans were laid out for the industry to achieve
US$25 billion in annual revenue by 2016 and to directly employ 1.3 million workers.
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4. IndiA, still AN
ATTRACTIVE
outsourcing destination
The availability of qualified and affordable manpower coupled with a positive business environment continues
to be India’s main source of strength. In fact, the same study by Cushman & Wakefield maintained that India
outperforms its counterparts, Philippines, China, Malaysia and other South Asian countries in IT-BPO industry
due to availability of English speaking and qualified talent, higher cost arbitrage, rapidly growing domestic
market, stable political system, positive business environment that fosters FDI in the sector among others.
Latest figures released by Nasscom complements these findings.
Indian IT-BPO Industry performance
Revenues from Fixed Price Contracts:
45.8
45.7%
45.4
45.0
44.6%
44.8
44.4
44.0
43.7%
43.8
43.7%
43.4%
43.4
43.0
Dec-11
Mar-12
Jun-12
Sep-12
Dec-12
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5. Net Client Additions:
3900
118
Number of active clients
Net client addition
120
3813
3800
3700
80
56
3628
3587
3600
100
3653
41
3500
3695
60
42
40
25
3400
20
Dec-11
Mar-12
Jun-12
Sep-12
Dec-12
Source: Nasscom Quarterly Industry Review – February 2013. Note: Analysis of Indian IT-BPO
industry performance during the quarter. The analysis is based on the results declared by the top
151 India-centric IT-BPO companies which comprise about 40-45% of the industry. To see full report,
click HERE
New Delivery Centers established/announced
•
•
US-based Fulcrum Worldwide is setting up a new software delivery and operations centre at
Hinjewadi, Pune with a capacity of 2,000 people
Maveric Systems has opened a delivery centre in Mumbai, and plans to recruit close to 150
people
Source: Nasscom Quarterly Industry Review – February 2013
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6. “
India remains
a prime destination
for software
development and
BPO operations,
thanks to its pool of
English-speaking
talent, good network
infrastructure, cost
arbitrage and high
quality of services.
”
What is Business
Transformation
(and why it matters?)
Over the past decades, some of the more sophisticated organizations have recognized that internal
collaboration and knowledge sharing is what gives them a competitive advantage. More recently,
brand-new market entrants [think of Google, Facebook, and even Amazon, back in the day] kicked
off their growth-oriented businesses by basing them on the technologies and frameworks that just
didn’t exist 15, or even 10, years ago. These frameworks release employees from their desks, open
up dialogues between different levels of management, and provide transparency across teams and
even geographies. An engineer in Delhi can discuss project fixes with an applications specialist
in Krakow, and both can share their conclusions with the implementation team in Houston – all
within a day’s work. Video-conferencing is now the norm – and gone are the days of satellites
beaming grainy pictures that looked as if they came from the moon. Today, modern shared services
centres have state-of-the-art conferencing facilities that would not look out of place at NASA. And
organizations like the Commonwealth Bank are transitioning their workforce cultures to ones
that are modern, flexible, and “activity-based,” to accommodate flexible working practices and
effectiveness.
Essentially: organizations are not just getting smarter, they are being built smarter. Consider the
modern, mobile office [and death of the cubicle]. After the workforce retrenching of the last five
years, careful growth, where it exists, is being nurtured within open plan offices, and hub-based
meeting areas. A recent article in the Wall Street Journal highlighted that new offices are being
designed with smaller meeting rooms, in recognition of the fact that most of today’s meetings
consist of 2 to 4 people brainstorming – and not 20 people sitting around a formal boardroom table.
Conversely, the space thus saved is turned into open meeting areas, with sofas, ping-pong tables
and full networking capabilities. The idea is to bring a team together and let them evolve ideas in
a completely new, free-thinking environment. There is even a parallel move to stopping the slow
but steady trickle of home-workers out of the office, in recognition of the value that interactive
teamwork provides to innovative thinking. Yahoo’s CEO, Marissa Mayer, earlier this year, had to
endure a media backlash in reaction to a leaked memo suggesting she’d prefer workers to be
onsite – but the trend seems to be in her favour.
In a recent report on social-media-enabled transformation, Cognizant’s researchers note that we
are nearing the end of the “Internet-enabled” IT wave and are on the cusp of making the leap to the
SMAC (Social Media, Analytics & Cloud) wave. This follows what Cognizant terms the 4 waves of
corporate IT: mainframe (1960-1976), minicomputer (1976-1992), distributed PC (1992-2001), and
Internet (2002-2012).
“As with other “curve jumps,” this shift will generate significant dislocation and wealth creation on
the supply (or vendor) side of the industry — across hardware, software and services sectors — and
drive new levels of productivity on the demand (or user) side of the industry.” (Source: SMAC: the
new enterprise IT model, Cognizant)
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7. World’sNo.1
Outsourcing
Destination
The 2013 Top 100 Outsourcing Destinations by Tholons tracks
the rankings of outsourcing destinations all over the world –
and India (again) claimed the top spot. 13 out of 100 destinations
listed in the report were also from India.
RANK 2013
CITY
COUNTRY
1
Bangalore
India
2
Mumbai
India
4
Delhi (NCR)
India
5
Chennai
India
6
Hyderabad
India
7
Pune
India
25
Chandigarh
India
26
Kolkata
India
29
Coimbatore
India
39
Jaipur
India
54
Bhubaneswar
India
66
Thiruvananthapuram
India
69
Ahmedabad
India
India Dominates
India is widely expected to retain its leading position in the global sourcing
community based on some core advantages:
• Optimal cost efficiency: a focus on process and productivity improvement,
leveraging tier two and tier three cities, and nonlinear growth through
platform and cloud products will continue to propel low-cost solutions
•
Unparalleled human capital: while China offers significant numbers as
well, India is widely recognized as offering a skilled and educated workforce
that aligns well with multinational corporations’ business expectations. India
presents the largest sources of employable talent in the world.
• Customer centricity: the growth in collaborative, advisory relationships
and the focus on partnerships for innovation supports an increasingly
tailored approach, compared to traditional standardized solutions
• Infrastructure: in recognition of the importance of the IT–BPO industry
to India’s economy, the government is investing significant funds in the
development of infrastructure
•
New technology: the rate of growth of new technology is faster than ever, and
with the introduction of mobile solutions over the past two years, we can
expect Indian providers to assimilate tablet and smart phone service delivery
into their offerings.
The future of IT-BPO services delivery will undoubtedly combine services,
solutions, and platforms to provide clients with flexible, scalable, real-time
support services. The Indian IT industry is strong and flexing its muscle to
maintain its leading position. Much of tomorrow’s success will depend upon
domain solutions and technology platforms – and not on talented, low-cost
employees.
Along with other significant growth locations like Latin America, Eastern Europe,
and increasingly the Middle East and Africa, India will remain a significant factor
in any long-term, smart sourcing model.
Disclaimer:
Please note that we do all we can to ensure accuracy and timeliness of the information presented herein but errors may still understandably occur in some cases. If you believe that a serious
inaccuracy has been made please let us know. This article is provided for information purposes only. IQPC accepts no responsibility whatsoever for any direct or indirect losses arising from the use
of this report or its contents.
Sources:
http://www.bpmwatch.com/research/why-people-join-bpos/; http://www.bpmzwatch.com/research/why-people-quit-bpo-jobs/; http://www.ssonetwork.com/business-process-outsourcing/
articles/will-india-lose-pole-position-in-bpo-space/; http://www.bpmwatch.com/research/challenges-faced-by-hr-professionals-in-bpo-industry/; http://survey.nasscom.in/sites/default/
files/researchreports/softcopy/IT-BPM%20Industry%20Insights-Feb-2013.pdf; http://www.bpmwatch.com/research/bpo-industry-in-india-a-report/; http://www.livemint.com/Industry/
JlLr0Q8S7TNZaG2CK8DmuO/India-an-attractive-destination-for-IT-and-BPO-companies.html; http://www.thestatesman.net/news/11611-india-forerunner-in-it-bpo-industry.html; http://zeenews.
india.com/business/news/technology/india-forerunner-in-global-it-bpo-sector-cushman-and-wakefield_82470.html
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8. 3-4 DECEMBER 2013 | GURGAON, INDIA
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