The business process outsourcing industry in India has grown by leaps and bounds and as its size increases so does its competitive advantage. Compared with 1996 when this Industry had started inroads into the United States with Outbound Tele-marketing campaigns, today the vehicle for these calls-the internet has become cheaper and more reliable for the average Indian business.
The business has boomed to the extent that many people are now running BPO’s out of their cyber cafes and houses in New Delhi.
The sector witnessed considerable activity during 2004-05, including a ramping up of operations by major Indian and MNC players and stepped up hiring. The domestic BPO market, catalyzed by demand from the telecom and BFSI segments, matched the growth of BPO exports. The market experienced maturity and consolidation, a result of numerous mergers and acquisitions taking place within the sector. There were over 400 companies operating within the Indian BPO space, including captive units (of both MNCs and Indian companies) and third-party services providers.
The Indian BPO industry remains on a growth path, emerging as one of the key investment markets in the country.
Figures from a recent survey carried out by PricewaterhouseCoopers
An Indian call centerGlobal BPO Market by Industry
Information Technology 43?
Financial Services 17?
Communication (Telecom) 16?
Consumer Goods/ Services 15?
Global BPO Market by Geography
United States 59?
Asia-Pacific (incl. Japan) 9?
Rest of the World 5?
Size of Global Outsourcing Market
2000 USD$ 119 Billion
2005 USD$ 234 Billion
2008 (est.) USD$ 310 Billion
Size and Growth of BPO in India
Year Size (US$ Bn) Growth Rate
2003 2.8 59?
2004 3.9 45.3?
2005 5.7 44.4?
Currently the Indian BPO Industry employs in excess of 245,100 people and another 94,500 jobs are expected to be added during the current financial year (2005-2006)
Call Center Employee cost
USA US$ 19,000 annually
Australia US$ 17,000 annually
Philippines US$ 9,050 annually
India US$ 7,500 annually
Nearly 75?f US and European multinational companies now use outsourcing or shared services to support their financial functions. 72?f European multinational companies have outsourced financial functions over the past two years.
Additionally, 71?f European companies and 78?S companies plan to use these services in the next 12-24 months. Overall, 29?f US and European companies expect to increase their use of outsourcing of financial functions, with spending expected to be nearly 16?igher than current levels.
Growth in this sector will get a further impetus as Indian BPO companies have robust security practices and emphasis is laid in developing trust with clients on this score. While earlier there were varying quality standards on this aspect, today there is focus on standardization of security, such as data and IP security.
Cities that are leading BPO-ITeS hubs in India today:
NCR (Gurgaon, Noida, Faridabad, Greater Noida)
These are Tier I cities that are leading IT cities in India
With rising infrastructure costs in these cities, many BPO's are shifting operationsto Tier II cities like:
Ahmedabad, Amritsar, Bhubaneshwar, Chandigarh, Guwahati, Indore, Jaipur, Kanpur, Kochi, Kolkata, Mangalore, Mohali, Mysore, Nagpur and Srinagar.
Tier II cities offer lower business process overheads compared to Tier I cities, but may have a less reliable infrastructure system which may hamper dedicated operations. The Government of India in partnership with private infrastructure giants is committed to bringing all around development and providing robust infrastructure all over the nation.
Answered By: Light candles to show way - 8/11/2006