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Indian BPO Industry

Information Technology-Business Process Outsourcing (IT-BPO) sector has played a very
significant role in the growth of the Indian economy. It has transformed Indian economy from
rural and agriculture based economy to a knowledge based economy. India’s share in global
trade in the sector of services has increased manifold mainly due to the enormous growth in
Information Technology and IT Enables Services. Indian IT-BPO services includes software
programming, design, engineering, accounting, legal and medical advices etc.
Indian IT-BPO sector can be broadly classified into three categories based on the services
provided by them.

o IT services
 Project Oriented Outsourcing
 Support
 Training Services
o Business Process Outsourcing
o Electronics Research
o Offshore Software Product Development
o Software products
o system software
o Enterprise applications
o Vertical applications

In India, according to NASSCOM, 65% of the companies are engaged in IT services, 30% in
BPO, 42% in Product Development, 12% in Engineering, R&D and Embedded and 22% in

7% at Rs. in which export amount was 40918 million.910 billion. total IT-BPO export from India has grown to US Dollar 69102 million. The graph shows the trends in exports of goods and services in US Dollars. with domestic revenues up 9. During the same financial year 2014. the Indian IT and ITeS industry will grow to about $300 Billion. In 2008. The Indian IT-BPO sector has resulted in huge growth in Indian exports. 1. The IT industry in India has affected the exports significantly and has helped the economy in faster growth. It is also estimated that by 2020. software products and the IT market. In 2012. total IT BPO (domestic + Export) revenue in India was US Dollar 62903 million. . This growth will be mainly due to growth in emerging sectors like e-commerce.IT Services and BPO are the main contributors in the export basket of IT-BPO sector. According to the forecast by NASSCOM. the BPO industry’s exports are estimated to grow by 13% at $86 billion. the IT-BPO sector will generate the revenue of US $12-15 Billion to the existing $118 Billion IT industry of India in financial year 2014.

the demand from consumers and enterprises are increasing which will result in steady growth of IT- . infrastructure costs and currency exchange rates. Emergence of many Tier-II cities which offers cost advantage due to the relatively lower cost of living. As the result of several initiatives by the government and with increasing telecom infrastructure. Well-qualified. Strong economic growth. which consists of cost of labor. English speaking labor force to offshoring organizations.Advantages The main advantages in India for the growth of BPO industry are as follows:             Cost Competitiveness. The key factors for the growth are rapid advancement in technology infrastructure. Labor Competitiveness. increasingly competitive business firms. enhanced focus by the government and emergence of business models. consisting of the size of the available labor. cultural compatibility to western markets and attrition rates. domain skills. level of education. Well-developed social infrastructure to support residing population. which also help IT companies get tax benefits A large number of resource readily available in the country Low operating costs Tax breaks and sops offered by the government Many initiatives by the government to help the growth of IT sectors such as The ‘GI Cloud’ which will help in leveraging cloud computing for effective delivery of E-Services. fluency in the English language. Rapid industrialization and growth of IT parks in the country Partial privatization of telecommunication Development of SEZ. Future of Indian IT-BPO Industry The Indian IT-BPO industry has huge potential of growth.

and so on. IT-BPO organizations in India give extraordinary consideration regarding security of data that they handle with.7% at Rs. . Indian companies should provide incentives to their employees and also apart from providing basic services. portability. 20% increment in security certificates. with domestic revenues up 9. The local programming items fragment is consistently determined by the need to supplant legacy frameworks and engineering progressions around cloud. including the legislature. The major challenge is high attrition rate.BPO market. Also due to this. they need to innovate and start offering other high-end services along with varied skillsets. This high attrition rate results in loss of skillset for the company. Another major challenge is from the growing competition from the countries like China and Philippines. 1. there has been 18% increment in the number of IT-BPO organizations procuring quality certificates. Challenges There are many challenges in front of the Indian IT industry which can affect the growth of the sector. an average employee of any BPO works with the company only for an average of 11 month and hence the attrition rate is about 40%.910 billion. the Indian IT and ITeS industry will grow to about $300 Billion. Local BPO fragment is relied upon to become quicker determined by interest from voice-based administrations and expanding reception by both conventional and developing verticals. Throughout the most recent three years. 30% increment in execution accreditations. companies incur recruitment and training cost frequently. In order to overcome this challenge. It is also estimated that by 2020. Also the Indian IT-BPO industry is expected to grow by 13% at $86 billion. In India. particularly touchy information of clients of their customers.