In the last couple of years, business process outsourcing has emerged to be one of the gifted sectors in the Indian market. In harmony with the latest surveys, the BPO services have progressively taken the Indian economy on a new height while another statistics depicting that by the year 2020, more than 80% of the world of business process outsourcing services will be served by the Indian companies.
In India, the trend of business process outsourcing services started off only a decade ago. However, it is India, which is currently considered to be the best place to meet up with the outsourcing service requirements and to attain the best service globally.
Today, the BPO outsourcing industry in India has been ranked as one of the most profitable industrial sectors in the nation. The industry stands responsible for accounting more than one third of the total productivity that has led the country to experience an increased rate of growth every year.
There are several factors that have contributed to the success of the BPO services in India. Some of these factors are given in the following lines:
Advanced infrastructure:
India is considered to be one of the fastest growing nations in the world. All the four metropolitan cities- Delhi, Chennai, Kolkata and Mumbai have turned out to be the major hub for almost each MNC from all over the world. These companies not only outsource the service requirements to different local companies but they also hire employees in order to handle its business operations residing in any other nations and also helping the partners as well. This is another reason behind the growth of the BPO services in India.
Lower wage:
India being one developing nation includes abundance of well-educated and well-trained people who can be easily employed for a relatively lower wage. As the labor cost is considered to be high in the developed nations, most companies belonging to the developed countries are found to be widely outsourcing their needs to the Indian BPO companies. Moreover, most BPO/call center firms are found to include youths, making them the primary workforce to reap the maximum benefits.
Adaptability to attain working style and foreign culture:
The Indian people are found to be pretty self-effacing when it is about getting adapted to the working style and foreign culture. Therefore, the foreign consumers usually find familiarity in India that makes them comfortable to carry out their outsourcing needs at ease. This serves to be an important reason that has made the BPO services in India a great pleasure for the service seekers from all over the world.
Massive youth power:
It may be surprising but true that almost 50 percent of the Indian population is young and almost all of them are educated individuals. As almost all of them are found to be professional graduates holding quality English speaking ability, they are mostly employed by the multinational companies and the other business outsourcing vendors situated in India. This proves to be the reason which is offering an exceptional hike to the BPO services.
Friday, 15 July 2011
Tuesday, 14 June 2011
India’s domestic BPO market to grow 23 percent in 2011
New Delhi: The country's domestic market for business process outsourcing is projected to grow over 23 percent to touch USD 1.4 billion this year, says Gartner.
In 2010, the domestic Business Process Outsourcing (BPO) market was worth USD 1.1 billion.
"It is relatively good growth rate (of over 23 per cent). The domestic BPO market is expected to see increased volumes, especially in the telecom space," Gartner's Research Director T J Singh told a news agency.
He noted that more areas are likely to adopt BPO models.
According to global research group Gartner, the domestic BPO market would reach USD 1.69 billion next year and increase to USD 2.47 billion by 2014.
The market's growth in 2010 was mainly on the back of rising volumes in existing BPO engagements and a number of new BPO deals from pent-up demand in the previous year.
In 2009, the market was worth around USD 885.6 million.
Apart from many India-based BPO service providers, those from the US and Europe are also focusing on the Indian domestic market.
As per Gartner, some of the local providers include Omnia, Kenkei, Androemeda, Genpact, Magus, MphasiS, Intelenet Global Services, Tech Mahindra, Aegis, Spanco and HTMT.
"... service providers who were focusing solely on the international market realised that there is merit in the Indian BPO market, given the fact that it grew rapidly even during the global economic crisis.
"The large and midsize players have now stepped up their activities," Singh noted.
Meanwhile, the BPO services market in the Asia Pacific region, excluding Japan, is expected to rise to USD 9.86 billion in 2011 from USD 8.6 billion in 2010.
Singh said there is growing demand for multi-country shared services and BPO services within Asia/Pacific.
"Buyers continue to invest in services that deliver scalable, high quality and consistent services across their geographical presence," he added.
In 2010, the domestic Business Process Outsourcing (BPO) market was worth USD 1.1 billion.
"It is relatively good growth rate (of over 23 per cent). The domestic BPO market is expected to see increased volumes, especially in the telecom space," Gartner's Research Director T J Singh told a news agency.
He noted that more areas are likely to adopt BPO models.
According to global research group Gartner, the domestic BPO market would reach USD 1.69 billion next year and increase to USD 2.47 billion by 2014.
The market's growth in 2010 was mainly on the back of rising volumes in existing BPO engagements and a number of new BPO deals from pent-up demand in the previous year.
In 2009, the market was worth around USD 885.6 million.
Apart from many India-based BPO service providers, those from the US and Europe are also focusing on the Indian domestic market.
As per Gartner, some of the local providers include Omnia, Kenkei, Androemeda, Genpact, Magus, MphasiS, Intelenet Global Services, Tech Mahindra, Aegis, Spanco and HTMT.
"... service providers who were focusing solely on the international market realised that there is merit in the Indian BPO market, given the fact that it grew rapidly even during the global economic crisis.
"The large and midsize players have now stepped up their activities," Singh noted.
Meanwhile, the BPO services market in the Asia Pacific region, excluding Japan, is expected to rise to USD 9.86 billion in 2011 from USD 8.6 billion in 2010.
Singh said there is growing demand for multi-country shared services and BPO services within Asia/Pacific.
"Buyers continue to invest in services that deliver scalable, high quality and consistent services across their geographical presence," he added.
Attrition rate in India's BPO sector increases
New Delhi: Erratic working hours and perceived lack of long-term career growth has led to 55 percent increase in attrition rate of Indian BPOs in the last four months, an industry chamber study has said.
During December 2010-April 2011, the attrition rate in the business process outsourcing (BPOs) has increased to 55 percent from about 40 percent in the same period during the previous year, Assocham study said.
“Although the BPO sector has been popular since the beginning as it has opened up plenty of job opportunities, the high attrition rate has plagued the sector now,” said Assocham Secretary General, D S Rawat.
Besides, the industry is facing serious challenges like shortage of skilled and educated workers, the study said.
Services offered by the IT/ITES and BPOs in the domains of pharmaceuticals and financial services have registered an attrition rate of 60 percent; in retail and IT sectors 50 percent; and in automobiles, FMCG and infrastructure sectors 50 percent.
“The growing trend of job-switching in the industry might prove fatal for the survival and growth of India’s BPO sector,” Rawat said.
India’s BPO industry is facing a stiff competition from countries like Mexico, Philippines, Malaysia, China, Canada and Ireland.
“Rapid job switches amongst professionals have certainly raised the wages, but there is hardly any development of expertise amongst the employees which is significant to justify their fat pay cheques globally,” Rawat said.
During December 2010-April 2011, the attrition rate in the business process outsourcing (BPOs) has increased to 55 percent from about 40 percent in the same period during the previous year, Assocham study said.
“Although the BPO sector has been popular since the beginning as it has opened up plenty of job opportunities, the high attrition rate has plagued the sector now,” said Assocham Secretary General, D S Rawat.
Besides, the industry is facing serious challenges like shortage of skilled and educated workers, the study said.
Services offered by the IT/ITES and BPOs in the domains of pharmaceuticals and financial services have registered an attrition rate of 60 percent; in retail and IT sectors 50 percent; and in automobiles, FMCG and infrastructure sectors 50 percent.
“The growing trend of job-switching in the industry might prove fatal for the survival and growth of India’s BPO sector,” Rawat said.
India’s BPO industry is facing a stiff competition from countries like Mexico, Philippines, Malaysia, China, Canada and Ireland.
“Rapid job switches amongst professionals have certainly raised the wages, but there is hardly any development of expertise amongst the employees which is significant to justify their fat pay cheques globally,” Rawat said.
Tuesday, 7 June 2011
New deals rev up BPO sector
Source: BPO Watch India
Americans and Europeans love the concept of outsourcing, but Indians too are realizing the benefits of outsourcing their back-end and IT management. Apart from the natural recovery of the economy, there are other reasons too to this uptake and interest by Indian customers.
The first quarter of 2011 has witnessed 20 outsourcing contracts by Indian clients, against 12 in the same quarter last year. The last year's first quarter had only one BPO deal, which was signed between Genpact and Max New York Life Insurance. But this year, the number has reached to six, basically supported by the banking vertical, says a report by Everest Group in a report published in the Financial Express.
Amneet Singh, vice-president - global sourcing, Everest Group said that earlier the domestic outsourcing market was only skewed to IT. The year 2010 had only 18% BPO domestic deals out of the total outsourcing deals. This year they expect it to be 25%.
Nasscom too feels that IT services growth will be 16.8 % in FY 2011 driven by localized strategies of service providers. On similar lines, the domestic BPO segment will grow by 16.9% motivated by demand from new verticals and technology platforms.
Genpact chief operating officer NV (Tiger) Tyagarajan admits that the domestic clients are now looking at transformational deals. They are keen to adopt new technology, shared services and business analytics and want to get global expertise. This is a market which has a lot of scope for innovation and all the Indian clients are growing at a rate of 30-40% a year. The opportunity to be tapped is huge.
With growth in domestic IT market expected to outpace India's GDP growth, the industry had a strong focus in this segment. The domestic market grew by 16% to aggregate revenues of Rs 787 billion. Increased technology adoption across government, corporates and SMBs for providing citizen services, enhanced internal controls and customer service led to an increase in outsourcing within the domestic market also.
Dani from Everest Group mentions that while globally the split between ITO and BPO deals is 2/3rd and 1/3rd -- in India, it is 80-85% ITO deals and the rest is BPO. However, on the positive side, the contribution of Indian buyers to outsourcing deals is now 5%, which was negligible two years back. And industry analysts expect this to reach 10% within the next two to three years, said the Financial Express report.
Americans and Europeans love the concept of outsourcing, but Indians too are realizing the benefits of outsourcing their back-end and IT management. Apart from the natural recovery of the economy, there are other reasons too to this uptake and interest by Indian customers.
The first quarter of 2011 has witnessed 20 outsourcing contracts by Indian clients, against 12 in the same quarter last year. The last year's first quarter had only one BPO deal, which was signed between Genpact and Max New York Life Insurance. But this year, the number has reached to six, basically supported by the banking vertical, says a report by Everest Group in a report published in the Financial Express.
Amneet Singh, vice-president - global sourcing, Everest Group said that earlier the domestic outsourcing market was only skewed to IT. The year 2010 had only 18% BPO domestic deals out of the total outsourcing deals. This year they expect it to be 25%.
Nasscom too feels that IT services growth will be 16.8 % in FY 2011 driven by localized strategies of service providers. On similar lines, the domestic BPO segment will grow by 16.9% motivated by demand from new verticals and technology platforms.
Genpact chief operating officer NV (Tiger) Tyagarajan admits that the domestic clients are now looking at transformational deals. They are keen to adopt new technology, shared services and business analytics and want to get global expertise. This is a market which has a lot of scope for innovation and all the Indian clients are growing at a rate of 30-40% a year. The opportunity to be tapped is huge.
With growth in domestic IT market expected to outpace India's GDP growth, the industry had a strong focus in this segment. The domestic market grew by 16% to aggregate revenues of Rs 787 billion. Increased technology adoption across government, corporates and SMBs for providing citizen services, enhanced internal controls and customer service led to an increase in outsourcing within the domestic market also.
Dani from Everest Group mentions that while globally the split between ITO and BPO deals is 2/3rd and 1/3rd -- in India, it is 80-85% ITO deals and the rest is BPO. However, on the positive side, the contribution of Indian buyers to outsourcing deals is now 5%, which was negligible two years back. And industry analysts expect this to reach 10% within the next two to three years, said the Financial Express report.
Tuesday, 24 May 2011
Why India
India is undoubtedly the most favored IT/BPO destination of the world. This raises the question why most of the big MNCs are interested in outsourcing their operations to BPOs in India. The answer is very simple- India is home to large and skilled human resources. India has inherent strengths, which have made it a major success as an outsourcing destination. India produces the largest number of graduates in the world. The name of India has become synonymous with that of BPOs and IT industry hence the name BPO India.
Besides being technically sound, the work force is proficient in English and work at lower wages in comparison to other developed countries of the world. India also has a distinct advantage of being in a different time zone that gives it flexibility in working hours. All these factors make the Indian BPOs more efficient and cost effective. In order to meet the growing international demand for lucrative, customer-interaction centers, many organizations worldwide are looking to BPO India.
Besides being technically sound, the work force is proficient in English and work at lower wages in comparison to other developed countries of the world. India also has a distinct advantage of being in a different time zone that gives it flexibility in working hours. All these factors make the Indian BPOs more efficient and cost effective. In order to meet the growing international demand for lucrative, customer-interaction centers, many organizations worldwide are looking to BPO India.
Indian IT Companies Don’t Agree on Outsourcing Demand in 2011
BY: India Briefing
Feb. 21 – Indian information technology (IT) firms have split expectations on the outlook of IT outsourcing demand in 2011, with the top three IT companies believing their revenue will keep going up and others thinking the opposite, a recent report on the Wall Street Journal said.
After a prosperous 2010, the big three Indian IT companies – Tata Consultancy Services (TCS), Wipro Technologies and Infosys – remain optimistic regarding their expected performance in the new year. N. Chandrasekaran, chief executive of TCS, India’s largest software exporter by revenue, said that he expects a greater demand for IT outsourcing services in 2011.
Meanwhile, Wipro Technologies is seeing growing opportunities and profit in the segments of financial services and healthcare, the two sections where Wipro will place its focus this year.
India’s second largest outsourcing firm, Infosys Technologies, also announced in January that it expects to see mounting IT budgets from clients in 2011. The company was happy to see its revenue growth between April and September of 2010 exceed its 16 percent to 18 percent forecast with performances of 25.7 percent to 26.1 percent, respectively. However, the revenue increase slowed down later last year, due to a decline in demand after large budget spending in the previous few quarters.
Quite a few other IT firms disagree with the big three, believing 2010’s boom in IT outsourcing services is temporary because clients spent more than necessary following the previous two-year global downturn.
Nasscom, India’s premier software trading body, predicted that the revenue growth of India’s software exports will slow down to 16 percent to 18 percent in the coming fiscal year, which starts on April 1, 2011, from the previous 18.7 percent in the current fiscal year.
The United States-based outsourcing company, Cognizant Technology Solutions, gave a forecast of 26 percent growth in revenue in 2011, while seeing a revenue surge of 40 percent to US$4.59 billion in 2010.
While both Nasscom and Cognizant made comparatively conservative estimations on 2011’s revenue, they are still confident of a single-digit increase in client budgets. However, C.P.Gurnani, chief executive of Satyam Computer Services, the company which was once India’s fourth largest software exporter by sales, uttered a different voice two weeks ago, saying “it is very clear that IT budgets are coming down.”
It seems difficult to tell which side is correct for now. The financial statements for January to March of 2011, the last quarter of India’s fiscal year, will probably give people a better idea on the client demand scale in the coming new fiscal year.
Feb. 21 – Indian information technology (IT) firms have split expectations on the outlook of IT outsourcing demand in 2011, with the top three IT companies believing their revenue will keep going up and others thinking the opposite, a recent report on the Wall Street Journal said.
After a prosperous 2010, the big three Indian IT companies – Tata Consultancy Services (TCS), Wipro Technologies and Infosys – remain optimistic regarding their expected performance in the new year. N. Chandrasekaran, chief executive of TCS, India’s largest software exporter by revenue, said that he expects a greater demand for IT outsourcing services in 2011.
Meanwhile, Wipro Technologies is seeing growing opportunities and profit in the segments of financial services and healthcare, the two sections where Wipro will place its focus this year.
India’s second largest outsourcing firm, Infosys Technologies, also announced in January that it expects to see mounting IT budgets from clients in 2011. The company was happy to see its revenue growth between April and September of 2010 exceed its 16 percent to 18 percent forecast with performances of 25.7 percent to 26.1 percent, respectively. However, the revenue increase slowed down later last year, due to a decline in demand after large budget spending in the previous few quarters.
Quite a few other IT firms disagree with the big three, believing 2010’s boom in IT outsourcing services is temporary because clients spent more than necessary following the previous two-year global downturn.
Nasscom, India’s premier software trading body, predicted that the revenue growth of India’s software exports will slow down to 16 percent to 18 percent in the coming fiscal year, which starts on April 1, 2011, from the previous 18.7 percent in the current fiscal year.
The United States-based outsourcing company, Cognizant Technology Solutions, gave a forecast of 26 percent growth in revenue in 2011, while seeing a revenue surge of 40 percent to US$4.59 billion in 2010.
While both Nasscom and Cognizant made comparatively conservative estimations on 2011’s revenue, they are still confident of a single-digit increase in client budgets. However, C.P.Gurnani, chief executive of Satyam Computer Services, the company which was once India’s fourth largest software exporter by sales, uttered a different voice two weeks ago, saying “it is very clear that IT budgets are coming down.”
It seems difficult to tell which side is correct for now. The financial statements for January to March of 2011, the last quarter of India’s fiscal year, will probably give people a better idea on the client demand scale in the coming new fiscal year.
Tuesday, 17 May 2011
Outsourcing market grew 6 percent over 2008- Everest Group 2010 Report projects positive growth outlook for the global sourcing market in 2011
The global outsourcing market continued to steadily grow in 2010 with an annualized growth rate of 6 percent compared to 2008 with the year seeing transactions reach a 36-month high in the fourth quarter, according to Everest Group, an advisoryresearch firm on global services. Transaction volumes in North America and Europe were higher than 2009 volumes by 20 percent and 17 percent respectively, indicating revival of activity in these geographies.
Everest Group’s Market Vista: 2010 in Review captures key developments in the outsourcing and offshoring industry in 2010. The report includes an analysis of outsourcing transaction trends, captive-related developments, market activity by locations, location risks and opportunities, key service provider developments, and implications for sourcing industry stakeholders. The report compares market activity in 2010 with preceding years to capture evolution of the outsourcing market.
In 2010, the outsourcing market saw IT Outsourcing (ITO) transaction volumes increase at an annualized rate of 5 percent from 2008 while Business Process Outsourcing (BPO) transactions increased 12 percent during the same period. The market recovery was led by traditional industry verticals, such as BFSI (banking, financial services and insurance), and buyer geographies, such as North America.
Everest Group’s Market Vista: 2010 in Review captures key developments in the outsourcing and offshoring industry in 2010. The report includes an analysis of outsourcing transaction trends, captive-related developments, market activity by locations, location risks and opportunities, key service provider developments, and implications for sourcing industry stakeholders. The report compares market activity in 2010 with preceding years to capture evolution of the outsourcing market.
In 2010, the outsourcing market saw IT Outsourcing (ITO) transaction volumes increase at an annualized rate of 5 percent from 2008 while Business Process Outsourcing (BPO) transactions increased 12 percent during the same period. The market recovery was led by traditional industry verticals, such as BFSI (banking, financial services and insurance), and buyer geographies, such as North America.
Subscribe to:
Posts (Atom)