Future of Outsourcing in India
05th Sep 2017
India presently occupies the top slot in the field of Business Process Outsourcing(BPO). However, it is doubtful how long will it be able to hold on to the spot as the smaller nations like the Philippines, Indonesia, Vietnam, Sri Lanka and other East European nations are eating up the share. Bangladesh is the latest addition to the league. As resources are available a cheap rate in the above-mentioned countries they are making a tremendous effort to increase their share in the global BPO market. The aspirations of the small countries have led to their stupendous growth. To know about best BPO companies or top BPO companies in Australia, you can refer to the recognised journals and reports.
Time will say whether India will be able to sustain in this competition and maintain its position in the global market. The leading nations are India, the Philippines, Malaysia, Brazil and Indonesia. China is leading the low-value services sector, whereas the Philippines leads the financial services division. It is also gaining projects in the fields of voice-based support, engineering and legal BPO. The gaming and animation services are taken care of mostly by Malaysia. Around 2% of financial services and voice related work have been transferred from India to the Philippines. Another 2% has gone to the European nations.
India will continue to dominate the BPM space but there are reasons why the US and rest of the global firms will turn towards other destinations along with India.
For voice-based work, the Philippines is the preferred option due to a better voice/accent environment, though the services are costlier there. In a few cases, close proximity and time zones advantage near shore locations is chosen over India. Many firms believe that they are too depended on India, that might prove to be harmful to them in the case of natural disasters or massive currency swings.
Experts claim that it is true that a few nations like Mexico, Costa Rica, Europe and Poland have taken some share from India but the gains will level off as the resources are pricey than in India.
As per NASSCOM, around 1.1 million people work in Indian BPM industry. More than 500 companies in India are giving outsourcing services in 35 languages to more than 66 countries.
India’s position is eroding primarily because of two reasons: cost and niche expertise. The Philippines is known for its customer service delivery; Eastern Europe excels in IT and China in programming.
Points To Remember:
India is the leader in BPM industry with 36% global share.
Around 1.1 million people are a part of BPM industry in India.
Around 200 MNCs are operational outside India in this industry.
During the current fiscal 2016-17, Indian BPM industry has grown at a rate of 8.1%. (at $28 billion)
In 2015-16, global industry recorded a growth 3.1%. (at $186 billion)
It is projected that Indian BPM industry will grow at a rate of 8-10% and yield $54 billion by 2025.