Growth of Indian BPO’s is ahead of IT industry

In the recent times Indian Business Process Outsourcing(BPO) industry has shown a rapid growth compared to Indian Information Technology(IT) industry in terms of expansion, work-force etc. This rapid growth is driven by many factors such as size of work-force, lesser cost, less entry barriers and many more. Also Indian work-force has the capability to handle tasks and manage them well, and have high skills and comfort-ability with the language which made them favorites. Indian IT industry could not recover after the financial crisis occurred in the year 2008.

Most of the companies in US and UK are still struggling to come out of the financial slowdown occurred in the year 2008. So to reduce cost most of the companies in this part of the world are outsourcing full process to these Indian companies instead of only small part of processes which was outsourced earlier. So because of this development the companies not only reduced cost but also increased the demand of skilled and expertise in Indian BPO industry. Barcley, a banking and finance company in UK, is thinking of outsourcing back-office jobs to India.  Most of the BPO companies are transforming to BPM (Business Process Management) industry, which is seeing a great shift from traditional process to high skilled knowledge based process. Clients are now investing on BPO sector than IT industry.

Few experts say so –

Vipul Khanna , Head BPO Operations, Cognizant Technology Solutions –

"BPO has being called on to do complex works. Globalization of businesses, regulatory changes and virtualisaton of business processes through mobility and cloud are driving rapid expansion,"

Keshav Murugesh, Group CEO, WNS Global Services –

“Having a moderate market of BPO Sector, what we are expecting for the next 5 – 6 years in terms of the global economy is that a BPM Company who offers end to end solutions,  verticalization, technology enabled transformation, more client centric provide a high growth in the industry.”

Rahul Singh –President, Business Service, HCL Technologies –

“There is also a shift in the nature of demand, with more clients now asking for more domain-focused skill sets, industry-specific knowledge, and all of it at client locations”.

Cathy Tornbohm, Research Vice-President for BPO, Gartner –

“Right now in the US there are major changes taking place in healthcare and banking which require an increase in labor to support them."

In December quarter statistics say BPO has shown rapid growth when compared with IT industries. A top IT and BPO service provider, Infosys had about 6% revenue increase while BPO has got 41% revenue growth. Meanwhile TCS saw a growth of 22% in IT sector and 39% in BPO sector and HCL received the revenue of 4.4% from BPO sector. BPO Majors like Genpact, WNS, and EXL increased their revenue by 19%, 6.3%, 27% respectively.  (Source – Yahoo Finance, BPM Watch).

India is heading towards growth with technology, skilled labors, globalization etc. Meanwhile India is still the favorites for outsourcing across the world. The size of BPO industry is still lower than IT industry, but the industry is in rapid growth. A study by Gartner said that the growth of BPO sector will be about $176 billion by 2016. This is happening due to the rapid shift in the industry, most of the BPO industries have transformed from business process outsourcing to business process management (BPM) and servicing all the verticals.

The Economic survey 2012-13 reports say that Indian BPO has lost 10% global market share when compared to the previous year. India will have a tough competition globally to retain its position and gain market share. The rapid shift and high demand will definitely help Indian BPOs to grow better and contribute a major share to the Indian economy.