BPO India Story - From Root to a Big Tree

India on the fast track

Indian economy is no longer passive and redundant; on the contrary it is one that is being steered by the winds of social and economic changes. Recently , the country has seen phenomenal developments in its political, social and economic infrastructure, accelerated by the strong forces of globalization and Information Technology. A country with a resurgent, progressive economy; India can be rightly called the foster-child of globalization.

The booming Fast growing Technology (IT-enabled services) / BPO (Business Process Outsourcing) are the core sectors that have driven the country into the epicenter of change. The liberalization of the Indian Telecommunication sector in 1994 gave an unexpected boost to the ITES/BPO industry. In no time, India has turned into a hot destination for global offshore outsourcing companies. The expansion in this sector can be attributed to the leading IT giants, captive players and third party service providers, who dominate the Indian ITES/BPO market. While the countries around the world are vying for a fair share of the cake, India has grabbed the pie as the preferred destination for offshore outsourcing. Indeed, India is shining!

BPO Industry: Why India is leading?

India became familiar with ‘Business Process Outsourcing’ only in the early and mid 1990’s, but now the entire country seems to be quivering with the ‘BPO fever'. The foreign direct investment (FDI) in the country owes a lot to this sector, which is progressing at a break-neck speed. The different kinds of services offered by BPO's include Customer Support, Technical Support, Telemarketing, Insurance Processing, Data Processing, Internet / Online / Web Research and so on. The cheap labour costs and the pool of skilled, English-speaking Indians have always been the two foremost factors contributing to the BPO development in the country. As the National Association of Software Services and Companies (NASSCOM) points out, the other equally motivating factors include strong quality orientation among players, ability to offer round-the-clock services based on the country's unique geographic location, positive policy environment which encourages investments and a friendly tax structure, which places the ITES/BPO industry on almost equal footing with IT services companies.

Call centres are a part of life for most of the cities in India

Meet the youngsters, the call centers are a welcome addiction . The industry has woven such magic around the entire nation that these days a city without a call centre would be hard to find. Call centers contribute a fair share to the revenue of the Indian BPO industry. About 60% of the BPO industry’s revenue comes from call-centers, 25% from high-volume, low-value data work and the remaining 15% from higher-value information work.

Risks for BPOs and from BPOs......

It is true that the Indian BPO sector is witnessing an unprecedented development, but the flip side of the industry cannot be ignored. For sometime, the Indian BPO industry has been battling certain complex problems such as labour attrition, poor infrastructure and lack of data protection laws.

The high attrition rate in the industry is primarily due to the restricted career options or growth opportunities for the youngsters. Fear of stagnation is a major factor that forces the employees to quit the industry. While some leave their career mid-way in pursuit of higher education, others are drawn in by the higher pay packages offered elsewhere.

Another key problem is the stressful work schedule, particularly night shifts, which may create both physical and mental disorders in the long run. Other reasons for the attrition problem include misguidance by the company, non-conducive policies and procedures, mental strain brought about by reclusive lifestyle and difficult relationships with peers or managers. According to analysts, labour attrition rates in the outsourcing industry vary between 20 and 40 per cent in certain companies while at top firms it’s around an average of 15 per cent. .

Is the problem is hard to solve? Never it is.....

BPO industry is racking its brains to solve the crisis, a complicated one that could prove to be disastrous in the long run. Brand building has come up as a good panacea for the attrition problem. The Indian BPO industry is focusing on the process of brand building with a view to create respect and awareness of the job among the people. The problem of talent attrition could be kept at bay by offering perquisites like the right opportunities for education such as degree courses for youngsters. While some BPO companies retain their employees by providing free food and accommodation, there are yet others who offer interest free home and car loans while some others even offer activities such as bungee jumping and salsa classes. Besides creating a challenging, competitive work environment, the stress is now on hiring the right employees. Today, most of the BPOs are on the look out for freshers and agents with more than one-and-a-half to two years of work experience, rather than graduates with no prior experience in the industry.

Lack of top-class infrastructure is also another key problem to be dealt with. As part of country’s infrastructure development, measures need to be taken to improve the quality of roads, power, transport and communication and connectivity. Further, the industry and the Government need to join hands so as to create an efficient legal machinery to enforce stringent laws. This will ensure a smooth, protected environment for the operation of businesses, particularly in connection with laws/policies governing data/cyber security and intellectual property rights.

What the future says.......

Although countries like Australia, China, Philippines and Ireland have emerged as the close competitors in the ITES/BPO sector, India is still the favored market for BPO companies. As for 2005, NASSCOM predicts that there would be a considerable expansion in the captive operations of global organizations and MNCs in the BPO sector.

The other side is.....Whatever we say but the whole BPO Industry is running on difference of la bound cost between developed and developing or underdeveloped countries. And what we observe is this difference is being bridged day by day. Once this difference will be bridged the whole BPO industry will be profit less. This is the future of BPO industry in upcoming 10-15 years.