Emerging from the tough business environment, several BPO firms are undergoing a technology-led transformation
By Sanjay Gupta
The Indian IT industry seems to be successively riding on “serial buses.” In the initial phases of its development, it was the “bus” that carried a lot of bodies (body shopping); then came the Y2K bus (okay, call it “bug” if you will), which was followed by the offshore, ITeS or BPO bus.
Lately, even though there is some revival of the talk of manufacturing, in my opinion that is one bus we have completely missed. (But that is beyond the scope of this piece.)
Let’s focus our attention on the BPO bus, which we began riding after the early, “captive” efforts of companies such as American Express and GE became successful and lit up the imagination of entrepreneurs, VCs and English-speaking college graduates alike. In as little as a decade, independent BPO outfits (the majority of which were, and still are, call centers) mushroomed. The IT services export sector, too, captured the opportunity by floating or hiving off BPO units.
Then, gradually, the cracks began to appear in this burgeoning segment. Rising infrastructure and manpower costs made business difficult for some and drove others to move upcountry, to B, C and even D class towns. What’s more, competition from other emerging countries such as Brazil, the Philippines and China clipped at the heels of Indian firms. (According to some reports, such countries have made a 10-15% hole in the global market share of Indian BPOs in the past five years.)
Nevertheless, the Indian BPO industry still clocks close to $20 billion annual revenue, employs roughly a million people, and is projected to grow around 10-15%.
The global crunch after the financial meltdown beginning 2008, however, seems to be bringing about a transformational change for Indian BPOs. Slowly but surely, it’s less and less about the “voice” business and more and more about higher-end, non-voice services such as those based on analytics and domain-specific processes. Also, a lot of bundled deals are happening, combining both IT services and BPO aspects of business.
To this end, many leading BPOs are not only tackling the challenges brought on by recessionary times but also prepping themselves for the future through a host of measures. These include automating their processes and embracing new technologies and trends such as cloud computing, social media and mobility.
The BPO bus has slowed down, no doubt, but it might well gather speed again.
– Sanjay Gupta
Editor, Express Computer
