Business process outsourcing in India
From Wikipedia, the free encyclopedia
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 Telemarketing 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 telecommunications 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.
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[edit] Figures from a recent survey carried out by PricewaterhouseCoopers
- Global BPO Market by Industry
| Information Technology | 43% |
| Financial Services | 17% |
| Communication (Telecom) | 16% |
| Consumer Goods/ Services | 15% |
| Manufacturing | 9% |
- Global BPO Market by Geography
| United States | 59% |
| Europe | 27% |
| 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% of US and European multinational companies now use outsourcing or shared services to support their financial functions. 72% of European multinational companies have outsourced financial functions over the past two years.
Additionally, 71% of European companies and 78% US companies plan to use these services in the next 12-24 months. Overall, 29% of US and European companies expect to increase their use of outsourcing of financial functions, with spending expected to be nearly 16% higher 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.
[edit] Leading BPO-ITes Cities in India
These are Tier I cities that are leading IT cities in India
With rising infrastructure costs in these cities, many BPO's are shifting operations to 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 overhead is 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.
[edit] See also
- Software Technology Parks of India
- Nalini by Day, Nancy by Night - 2005 documentary on outsourcing in India
- Business process outsourcing in the Philippines
- Call center security
- Tidel Park
- HITEC City
- InfoPark, Kochi
- Technopark Kerala
- Silicon Valley of India
- Azim Premji- Father of the Indian Outsourcing phenomenon
- Jack Welch - Pioneer of Outsourcing to India
- Medical Transcription
[edit] Further Reading
- Thomas L. Friedman, The World is Flat: A Brief History of the Twenty-First Century 2005 ISBN 0-374-29288-4
- Outsourcing to India: The Offshore Advantage by Mark Kobayashi-Hillary (ISBN: 3540208550)
- What's This India Business?: Offshoring, Outsourcing, and the Global Services Revolution by Paul Davies (ISBN: 1904838006)
[edit] External links
Articles
- NASSCOM
- Ministry of Information Technology
- BusinessWeek online on "The Rise Of India"
- cio.com on "Inside Outsourcing in India"
- washingtonpost on "India's New Faces of Outsourcing"
- msnbc "Outsourcing: Silicon Valley East"
- Where the Good Jobs Are Going by Jyoti Thottam (Time.com)
- Out Of India (CBS News)
- Some U.S. hospitals outsourcing work: Shortage of radiologists spurs growing telemedicine trend (Associated Press)
Videos
- "The Other Side of Outsourcing" a Special presentation by Discovery Times Channel
- News 8 Explores "Exporting IT: Austin to India" (News8Austin)
- news.com presents "Will India's outsourcing boom ever bust?": Infosys Chairman N.R. Narayana Murthy talks outsourcing
Blogs
