INDIAN BPO

INDUSTRY

Group 7:
Dennis
Gibin
Manoj Kumar
Rasya
Swaney
 Agenda

• What is BPO?
• The Indian BPO Industry.
• India’s Advantage.
• Major Worries for the Indian BPO industry.
• Other Challenges.
• New Competitors.
• Summary
 What is BPO?
• Business process outsourcing (BPO) is the
contracting of a specific business task,
such as human resources and customer
service, to a third-party service provider.
• BPO is implemented as a cost-saving
measure for tasks that a company
requires.
The Indian BPO industry
• IT was a domestic industry and has spread to
international markets.
• BPO on the other hand has a strong export focus.
• Key foreign investments in Bangalore around IC design
of BPO.
• When it began there was a immigration pattern of
individuals and offering of skilled labor via body
shopping in US.
• So the obstacles of software development was not labor
cost but it was access to skill labor.
 Cont…
• There was reduction among US citizens within
engineering professions.
• The universities in US for foreign enrollments
was increasing.
• There was growth on US demand, but Indian
domestic industry had certain limitations to
help US for skilled labor.
India’s Advantage.

• Availability of appropriately skilled

resources.
• Lower cost of manpower (1/5 to 1/10).
• Ability to generate better quality of work,
more efficiently.
• Indian companies offer 20% higher
productivity and 30% better quality than
any other competing countries.
 Worries for the Indian BPO
• Reckless start-ups.

• Poor Infrastructure.

• High attrition rates & rising aspirations.

 Other Challenges
• Over dependence on the voice business
Major revenue earner of BPO companies. 60% of the
BPO business coming to India is voice related, and it is over
dependence, which may lead to disaster.

Cost Pressure.
Fixed cost of voice business of maintenance and dialer
running is alone about $1.5 per person per hour.
Overall cost of BPO operation were also rising rapidly.
 Cont…
• Lack of managerial expertise.
- Dealing with a large $100 million contracts.
- Dozen-odd big India players are also getting to
the $100 million club will depend their ability to
form their operation rapidly.
- But here 40% average attrition rate is the
biggest hurdle, so most firms will need to
consolidate business within a few clients. So
there will be no relationship building process.
 The New Competitors.
• China-Though India is still the leading
services hub of the world, many countries are
actually emerging at a very fast rate. China’s
greatest strength is low-cost labor.
• Country is pushing English language in both
schools and colleges in a major way.
• China’s enviable economic growth. Chinese
economy is growing faster than any other
country in the world.
Other Emerging Countries

• Philippines
• Ireland
• Canada
• Brazil
• Mexico
• South Africa
Summary
• Because of having highly skilled resources,
lower cost of manpower and better quality
of work, India is the leader in the BPO
industry at present.
• Some problems faced by Indian BPO
industries are poor infrastructure, high
attrition rates and reckless start-ups.
• Although India is the leading country in
the BPO industry, its facing lots of threats
from countries like China, Philippines,
Ireland and Canada.